Financial Planning
Final Test Solutions
Course Introduction
Financial Planning is a comprehensive course that introduces students to the principles and practices of managing personal and organizational finances. The course covers key topics such as budgeting, saving, investing, risk management, retirement and estate planning, and tax strategies. Students will learn how to assess financial needs, develop financial goals, create actionable financial plans, and analyze various investment and insurance products. Through case studies and real-world applications, the course equips students with analytical tools and decision-making skills necessary for effective financial management and long-term wealth building.
Recommended Textbook
Personal Finance 2nd Edition by Robert B. Walker
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17 Chapters
1143 Verified Questions
1143 Flashcards
Source URL: https://quizplus.com/study-set/3290
Page 2
Chapter 1: Money Matters: Values, vision, mission, and You
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90 Verified Questions
90 Flashcards
Source URL: https://quizplus.com/quiz/65328
Sample Questions
Q1) Money personality is
A)the point at which spending more money has a diminishing rate of fulfillment.
B)sufficient means to support oneself.
C)your style and habits of money management.
D)income from your investments.
Answer: C
Q2) Society is most in control of your finances.
A)True
B)False
Answer: False
Q3) Which term best describes Ben Franklin's adage: "Waste not,want not."?
A)Greedy
B)Envious
C)Cheap
D)Frugal
Answer: D
Q4) The most important factor in choosing a career is receiving the highest salary.
A)True
B)False
Answer: False
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Chapter 2: Planning and Budgeting
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63 Verified Questions
63 Flashcards
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Sample Questions
Q1) Calculate the opportunity cost of one extra year of college if tuition,room and board fees,and spending money are $25,000,and the estimated salary upon graduation is $50,000.
A)$75,000
B)$19,000
C)$38,000
D)$29,000
Answer: A
Q2) Which is an example of a budget?
A)Making a plan around your income,savings,and spending
B)Spending your money at will
C)Balancing your checkbook
D)Assuming someone will give you money every month
Answer: A
Q3) Net worth is calculated by adding all of one's assets together.
A)True
B)False
Answer: False
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Chapter 3: Financial Instruments and Institutions
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74 Verified Questions
74 Flashcards
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Sample Questions
Q1) Of the following statements,which one accurately describes what investments are?
A)A foundation for your savings
B)Savings vehicles that provide the same return as certificates of deposit
C)Savings vehicles with no risk
D)A way to have your money grow faster than inflation
Answer: D
Q2) A 529 plan is
A)funds set aside to go toward post-secondary education expenses.
B)an account which allows the holder to write checks against deposited funds.
C)funds set aside to be withdrawn after age 59.5 without penalty.
D)a plan where taxes are not paid on the money or interest earned until the year it is withdrawn.
Answer: A
Q3) A ________ is an account designed to encourage saving for future college expenses and is legally known as a "qualified tuition plan."
A)CD
B)529 plan
C)roth IRA
D)checking account
Answer: B
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Chapter 4: Time Value of Money
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55 Verified Questions
55 Flashcards
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Sample Questions
Q1) Anna is going to deposit $1,000 into an account that has an annual interest rate of 4% compounded quarterly.How much will she have at the end of one year?
A)$1,040.60
B)$1,040.00
C)$1,056.00
D)$1,460.00
Q2) Each dollar bill has a serial number starting with the letter of the district in which it was printed.
A)True
B)False
Q3) What is paper money backed by?
A)Gold
B)Gold and silver
C)The full faith and credit of the U.S.government and the Federal Reserve Bank
D)Silver
Q4) The time value of money is most commonly applied to two types of cash flows: lump sum and annuity.
A)True
B)False
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Chapter 5: Consumer Credit: Credit Cards and Student Loans
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79 Verified Questions
79 Flashcards
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Sample Questions
Q1) Would you rather borrow money using a subsidized loan or an unsubsidized loan and why?
A)Subsidized - The government pays interest
B)Unsubsidized - The government pays interest
C)Subsidized - The government doesn't pay interest
D)Unsubsidized - The government doesn't pay interest
Q2) What is predatory lending?
A)Lending money to borrowers at an extremely low interest rate
B)The act of lending money at an unreasonably high interest rate,making payment excessively difficult or impossible for the borrowers
C)Lending money to borrowers who are not at least 18 years of age
D)Offering a borrower the option to roll over or make an extension of their loan for an additional fee
Q3) Which of the following credit card fees is charged once a year just for having a card?
A)Cash advance fee
B)Return item fee
C)Annual fee
D)Balance transfer fee
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Chapter 6: Credit Bureau Reports and Identity Theft
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96 Verified Questions
96 Flashcards
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Sample Questions
Q1) The only place to be assured a free copy of your credit report is through the government-sanctioned Central Source Annual Credit Report Request Service.
A)True
B)False
Q2) Correcting an error on a credit report involves a simple phone call.
A)True
B)False
Q3) Of the following usage percentages,which will give you the best credit score?
A)<7% of your credit limit
B)<10% of your credit limit
C)<15% of your credit limit
D)<30% of your credit limit
Q4) Which indicator drives a FICO score the most?
A)Types of credit
B)How much you owe compared to your available credit
C)History of payments
D)Length of credit history
Q5) Identity theft is relatively easy to fix.
A)True
B)False
8
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Chapter 7: Auto and Home Loans
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62 Verified Questions
62 Flashcards
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Sample Questions
Q1) Who can help you determine your borrowing capacity and identify financing options?
A)Real estate broker
B)Ask.com
C)BankRate.com
D)Personal banker
Q2) When looking into buying or leasing a car,what criteria are compared when "doing the homework"?
A)New versus used
B)Price and insurance cost
C)Reliability and service records
D)All choices are correct.
Q3) Which is not a selection criterion when searching for a home?
A)Taxes
B)Schools
C)Interest rate
D)Location
Q4) Home equity loans are typically used to make major purchases for your home. A)True
B)False
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Chapter 8: Debt,foreclosure,and Bankruptcy
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70 Verified Questions
70 Flashcards
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Sample Questions
Q1) What is another term for Chapter 13 bankruptcy?
A)Liquidation bankruptcy
B)Chapter 7 bankruptcy
C)Wage-earner bankruptcy
D)All of the choices are incorrect.
Q2) ________ is when you alter mortgage terms in attempt to keep borrowers from foreclosure.
A)Avoiding foreclosure
B)Cramdown
C)Interest rate
D)Reinstatement
Q3) In stopping little financial leaks,what are the first things you need to sort out?
A)Needs from wants
B)Bills from payments
C)Ongoing bills vs.one-time payments
D)Giving vs.spending
Q4) Chapter 7 bankruptcy is also known as wage-earner bankruptcy.
A)True
B)False
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Chapter 9: Tax Management
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84 Verified Questions
84 Flashcards
Source URL: https://quizplus.com/quiz/65320
Sample Questions
Q1) You can use this tax form if you have no dependents and are under 65 years of age.
A)1040A
B)1040EZ
C)1040
D)W-4
Q2) What is the time limit on short-term gain?
A)24 months
B)18 months
C)12 months
D)6 months
Q3) Exemptions and deductions reduce taxable income.
A)True
B)False
Q4) Being able to choose from a pool of choices for benefit plans is called
A)a cafeteria plan.
B)credit for income benefits.
C)itemized deduction.
D)adjusted benefit plan.
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Chapter 10: Insurance: Covering Your Assets
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88 Verified Questions
88 Flashcards
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Sample Questions
Q1) What is your out-of-pocket cost for a $150 clinic visit if you have a $10 copayment policy?
A)$10
B)$15
C)$25
D)$140
Q2) When borrowing money for a vehicle,who is typically the lien holder and loss payee on the insurance?
A)The primary driver of the car
B)The owner as noted on the title of the vehicle
C)The lending financial institution
D)The payer of the insurance
Q3) If you have too many serious driving violations,your state may require that you have SR-22 liability insurance in order to drive.
A)True
B)False
Q4) Liability insurance on a vehicle is broken down into two different categories.
A)True
B)False
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Chapter 11: Investment Basics
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56 Verified Questions
56 Flashcards
Source URL: https://quizplus.com/quiz/65318
Sample Questions
Q1) At Ava's second birthday,her grandparents wanted to pool their money to buy tax-free municipal bonds that would ultimately provide $100,000 for college expenses in 16 years.If calculating a gain of 4% interest,what dollar amount in municipal bonds will they need to buy on Ava's second birthday,assuming all interest was re-invested ?
A)$32,035
B)$64,069
C)$53,391
D)$120,000
Q2) Your tax liability is 30 percent of your $60,000 salary,and you contribute 7 percent annually to your 401(k).If your employer contributes $0.50 per dollar up to the first 5 percent of your salary,how much money is being deposited in total to your 401(k)by taking full advantage of the employer match?
A)$2,500
B)$4,500
C)$4,250
D)$5,700
Q3) All 401(k)contributions are on a pretax basis and the earnings are tax-deferred.
A)True
B)False
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Page 13
Chapter 12: Mutual Funds
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57 Verified Questions
57 Flashcards
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Sample Questions
Q1) Measuring fund performance against the S&P 500 can show the consistency of the fund's returns; only about ________ of the fund managers beat the S&P 500 consistently,and they usually have higher expense ratios than index funds.
A)5%
B)10%
C)15%
D)25%
Q2) If you were to invest all of your money in a single company and it went bankrupt,you would not lose everything.
A)True
B)False
Q3) Which of the following are among the fund manager's responsibilities?
A)Buy and sell assets
B)Maximize the growth of the fund given the specific investment objective
C)Minimize the losses of the fund
D)All options are correct.
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Chapter 13: Stocks
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68 Verified Questions
68 Flashcards
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Sample Questions
Q1) What is the times interest earned ratio if the EBIT is $1,700,000 and the total interest payment is $150,000?
A)0.882
B)8.82
C)11.3
D)113
Q2) A ________ tells the broker to buy or sell stock once it reaches a specific price.
A)market order
B)limit order
C)stop order
D)day order
Q3) What indications can be derived from a firm's balance sheet and income statement when researching the firm as a stock option?
A)Liquidity and financial leverage
B)Income over liabilities ratios
C)Bankruptcy risk
D)P/E yield
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15
Chapter 14: Bonds
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71 Verified Questions
71 Flashcards
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Sample Questions
Q1) If you need to sell a bond on the secondary market before the maturity date,________.
A)you will receive only the exact amount you invested
B)you will receive less than face value if current interest rates are higher than your bond's coupon rate
C)you will receive more than face value if current interest rates are higher than your bond's coupon rate
D)you will receive less than face value if current interest rates are lower than your bond's coupon rate
Q2) Treasury notes ________.
A)can be purchased only through a competitive bid
B)can be purchased only through a noncompetitive bid
C)can be purchased only through Treasury Direct
D)pay interest that is exempt from state and local income taxes
Q3) Buying and selling corporate bonds is as easy as buying and selling stocks,given that bonds tend to trade every few days and there are fewer buyers and sellers.
A)True
B)False
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16
Chapter 15: Real Estate Investments
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58 Verified Questions
58 Flashcards
Source URL: https://quizplus.com/quiz/65314
Sample Questions
Q1) Responsibilities of a landlord are covered under the ________.
A)Fair Housing Act
B)Fair Tenant Act
C)Fair Landlord Act
D)None of the options are correct.
Q2) What options do you have in real estate investment if you do not have the time or skill to be a landlord?
A)Stay out of the business
B)Flip real estate
C)Quit your job so you have the time; the tax advantage will be worth it
D)Invest in a real estate investment trust (REIT)
Q3) Buying a(n)________ is a simple and good way to get into real estate investing.
A)house
B)foreclosed property
C)apartment complex
D)lot for development
Q4) Passive income is not one of the advantages of owning rental property.
A)True
B)False
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Chapter 16: Retirement and Estate Planning
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49 Verified Questions
49 Flashcards
Source URL: https://quizplus.com/quiz/65313
Sample Questions
Q1) When creating a will,who is the person that will tend to your estate according to your wishes?
A)Tender
B)Perpetrator
C)Executor
D)Lawyer
Q2) Estate and inheritance taxes are levied at the passing of your property at the time of your death.
A)True
B)False
Q3) A(n)________ becomes effective upon you becoming incompetent or unable to manage your affairs.
A)advance directive
B)durable power of attorney for health care
C)living will
D)power of attorney
Q4) Those who are self-employed can invest in a simplified employee pension plan.
A)True
B)False
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Chapter 17: Financial Planning for Life
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23 Verified Questions
23 Flashcards
Source URL: https://quizplus.com/quiz/65312
Sample Questions
Q1) Frugality is not about being cheap or about deprivation; instead it is about being creative and finding savings and more efficient ways to achieve your objectives.
A)True
B)False
Q2) How often should someone assess their insurance coverage,wills,etc.?
A)Monthly
B)Annually,or whenever major life changes occur
C)Quarterly
D)Whenever they spend money
Q3) What is frugality?
A)Spending your money according to your priorities and vision for the future
B)Being creative and finding savings and more efficient ways to achieve your objectives
C)Being in control of your income and expenses
D)All of the options are correct.
Q4) It is important to prioritize,minimize,organize,and economize things that exhaust you in your life.
A)True
B)False
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