Introduction to Financial Planning Review
Questions
Course Introduction
Introduction to Financial Planning provides students with a foundational understanding of personal and professional financial management. The course covers key concepts such as budgeting, cash flow management, investment strategies, tax planning, insurance, retirement planning, and estate planning. Through practical applications and case studies, students will learn how to develop comprehensive financial plans, assess financial goals, and make informed decisions for long-term financial security. The course equips students with the essential skills needed to navigate financial challenges and lays the groundwork for advanced study or careers in financial planning and related fields.
Recommended Textbook
Personal Financial Planning 13th Edition by Lawrence
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15 Chapters
2759 Verified Questions
2759 Flashcards
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Page 2
J. Gitman
Chapter 1: Understanding the Financial Planning Process
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142 Verified Questions
142 Flashcards
Source URL: https://quizplus.com/quiz/64933
Sample Questions
Q1) GDP refers to the total earnings of American workers during a year.
A)True
B)False
Answer: False
Q2) Wealth is the key consideration is establishing financial goals as it is the measure of value in financial transactions.
A)True
B)False
Answer: False
Q3) After reaching adulthood,your financial goals will [stabilize | continue to change].
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
Answer: B
Q4) [Vacations | Education] would be considered a necessity of life.
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
Answer: C
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Chapter 2: Using Financial Statements and Budgets
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184 Verified Questions
184 Flashcards
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Sample Questions
Q1) The short-term goals you put into your financial plan [will | will not] affect the achievement of long-term goals.
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
Answer: A
Q2) Your car has a market value of $4,000 while the balance of the loan against it is now $2,500.You will list this car as net worth of [$4,000 | $1,500].
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
Answer: B
Q3) The income statement is specific to
A) one point in time.
B) a specific period of time.
C) last year.
D) next year.
E) none of these.
Answer: B
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Page 4
Chapter 3: Preparing Your Taxes
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200 Verified Questions
200 Flashcards
Source URL: https://quizplus.com/quiz/64935
Sample Questions
Q1) ____ would be considered taxable income.
A) An inheritance from your grandmother's estate
B) A gift from your aunt
C) Child support payments
D) Alimony received
E) A tuition scholarship
Answer: D
Q2) A tax audit is a(n)
A) IRS revision of previously filed return.
B) IRS attempt to verify accuracy of return.
C) IRS charge of illegal action.
D) U.S.Tax Court action.
E) U.S.Tax Court decision.
Answer: B
Q3) Social security taxes are paid on earned income but not on investment income.
A)True
B)False
Answer: True
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Page 5
Chapter 4: Managing Your Cash and Savings
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193 Verified Questions
193 Flashcards
Source URL: https://quizplus.com/quiz/64936
Sample Questions
Q1) A major reason for overdrafts is the inability of a check writer to keep an accurate check ledger.
A)True
B)False
Q2) You put $1,000 into a 12-month certificate of deposit.After seven months,you really need the money.The bank will let you have it before 12 months,but you will pay a penalty.
A)True
B)False
Q3) [More than | Fewer than] half the banking institutions in the U.S.are federally insured.
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
Q4) Errors discovered during the reconciliation process are most likely to have been made by the [depositor | bank].
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
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6
Chapter 5: Making Automobile and Housing Decisions
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220 Verified Questions
220 Flashcards
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Sample Questions
Q1) An adjustable rate mortgage with a baseline rate of 5%,a margin of 2%,and an annual cap of 1% would have an initial mortgage rate of 7%.
A)True
B)False
Q2) Gasoline is a variable cost of automobile ownership.
A)True
B)False
Q3) The financing rate on the car you are leasing is called the A) money factor.
B) capitalized cost.
C) residual value.
D) purchase option.
E) capitalized cost reduction.
Q4) Billy and Suzie want to calculate the difference in monthly payments on a $110,000 home as a result of a $5,000 down payment or a $10,000 down payment.Use your financial calculator to figure the monthly payments,assuming they get a 6.5%,30-year mortgage.
Q5) An automobile is a personal use asset for most buyers.
A)True
B)False
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Chapter 6: Using Credit
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178 Verified Questions
178 Flashcards
Source URL: https://quizplus.com/quiz/64938
Sample Questions
Q1) When canceling a credit card,you should cut up the card and ____ that you are canceling your account.
A) inform the issuer in writing
B) call the issuer and tell them
C) inform the credit bureau in writing
D) call the credit bureau and tell them
E) all of the above
Q2) ____ cards offer the cardholder a way to contribute to a worthy cause,sometimes described as "painless philanthropy."
A) Travel and entertainment
B) Debit
C) Credit
D) Affinity
E) Rebate
Q3) ____ are not a type of open account credit.
A) Retail charge cards
B) 30-day charge accounts
C) Travel and entertainment cards
D) Bank credit cards
E) Bank debit cards
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Chapter 7: Using Consumer Loans
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161 Verified Questions
161 Flashcards
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Sample Questions
Q1) You are borrowing $5,000 at 9%.You may choose a 24 or 36 month repayment plan.The total finance cost will be higher with the [24 | 36] month plan.
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
Q2) Credit unions dominate the consumer loan market.
A)True
B)False
Q3) College costs have been escalating faster than the overall rate of inflation.
A)True
B)False
Q4) The cash value of a whole life insurance policy can be used as a source of loan collateral.
A)True
B)False
Q5) The purchase of credit life insurance is highly recommended by most financial planning experts.
A)True
B)False
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Chapter 8: Insuring Your Life
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157 Verified Questions
157 Flashcards
Source URL: https://quizplus.com/quiz/64940
Sample Questions
Q1) Life insurance [will | will not] pay proceeds if an insured is killed in a commercial airline crash.
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
Q2) Social Security survivors' benefits typically provide benefits for children through [high school | college].
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
Q3) The life insurance policy that clearly separates the protection and savings elements is [whole life | universal life].
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
Q4) Individually owned life insurance premiums are generally tax deductible.
A)True
B)False
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Page 10
Chapter 9: Insuring Your Health
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164 Verified Questions
164 Flashcards
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Sample Questions
Q1) If you are trying to keep your disability income premiums reasonably priced but still appropriate for insuring your financial needs,select a short elimination period and a short duration of benefits.
A)True
B)False
Q2) Mental illness is normally not covered in health insurance policies.
A)True
B)False
Q3) Medicare is a government-sponsored health care plan composed of Part A and Part B.Part A covers
A) hospital expenses.
B) doctor's bills.
C) custodial nursing home expenses.
D) prescription drugs.
E) all of the above.
Q4) If you lose your job,COBRA permits you to continue your group health insurance coverage permanently as long as you pay the premium within 36 months of the termination of employment.
A)True
B)False
Page 11
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Chapter 10: Protecting Your Property
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194 Verified Questions
194 Flashcards
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Sample Questions
Q1) The insurance company will provide defense for a covered person against both civil and criminal charges involving her motor vehicle.
A)True
B)False
Q2) The factor that is likely to have the greatest effect on your automobile insurance is your [driving record | address].
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
Q3) Negligent acts must be [intentional | unintentional] in order to be insured.
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
Q4) Auto insurance companies may offer premium discounts for
A) being a good student.
B) installing anti-theft devices.
C) taking a defensive driving course.
D) all of these.
E) none of these.
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Chapter 11: Investment Planning
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196 Verified Questions
196 Flashcards
Source URL: https://quizplus.com/quiz/64943
Sample Questions
Q1) A portfolio is a collection of investment vehicles assembled to meet an investment goal.
A)True
B)False
Q2) A long term investment strategy includes all of the following except
A) stock and bond selection.
B) diversification.
C) immediate financial needs to pay current bills.
D) risk-return behavior.
E) investor education.
Q3) Which of the following is a true statement about the Dow Jones Industrial Average?
A) it is based on 30 industrial stocks
B) it is based on 50 transportation stocks
C) it is a composite index for the 500 largest industrial publicly traded companies
D) it is based on 100 utilities stocks
E) it contains 50 blue chip stocks
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Chapter 12: Investing in Stocks and Bonds
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194 Verified Questions
194 Flashcards
Source URL: https://quizplus.com/quiz/64944
Sample Questions
Q1) Tech stocks represent stocks in the technology and utility sectors.
A)True
B)False
Q2) The commonly-cited price for a bond is usually its clean bond price.
A)True
B)False
Q3) Bonds represent a form of corporate debt capital.
A)True
B)False
Q4) Convertible preferred stock can be exchanged for common stock.
A)True
B)False
Q5) Anderson,Inc.has $10 million liabilities,$12 million preferred stock,8 million shares of common stock outstanding,and $45 million in total assets.The book value is
A) $2.30 per share.
B) $2.88 per share.
C) $4.13 per share.
D) $4.38 per share.
E) none of the above.
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Chapter 13: Investing in Mutual Funds
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174 Verified Questions
174 Flashcards
Source URL: https://quizplus.com/quiz/64945
Sample Questions
Q1) Advantages of exchange traded funds over mutual funds include [narrow | broad] industry selection.
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
Q2) Asset allocation funds invest in stocks,bonds,and cash.
A)True
B)False
Q3) No-load funds are generally sold directly to the investor without a salesperson.
A)True
B)False
Q4) Investors tend to use mutual funds for which of the following reasons
A) Diversification
B) Professional Management
C) Financial Returns
D) convenience
E) all of the above
Q5) Bond mutual funds are always less risky than stock mutual funds.
A)True
B)False
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Chapter 14: Planning for Retirement
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225 Verified Questions
225 Flashcards
Source URL: https://quizplus.com/quiz/64946
Sample Questions
Q1) If your employer matches your 401(k)contributions,you should contribute at least [the maximum allowed for tax deferrable | the amount matched by your employer].
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
Q2) There is a [5% | 10%] federal income tax penalty for pension plan withdrawals before age 59.
A)for the first item
B)for the second item
C)if neither item will correctly complete the statement.
Q3) The amount of money in your defined contribution retirement portfolio will depend on
A) the age at which you begin contributing.
B) the amount of money you deposit each month.
C) the rate of return on your savings.
D) all of these.
E) none of these really make much difference.
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Page 16
Chapter 15: Preserving Your Estate
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177 Verified Questions
177 Flashcards
Source URL: https://quizplus.com/quiz/64947
Sample Questions
Q1) Mental capacity requires an individual to be at least 21.
A)True
B)False
Q2) A letter of last instruction is a legal document.
A)True
B)False
Q3) ____ would represent a second level death-related cost.
A) Unpaid bills
B) Health related bills
C) Federal estate taxes
D) Inflation
E) none of the above
Q4) A gift is given when the donor relinquishes control over the asset.
A)True
B)False
Q5) One should make copies of his will and store them in different places.
A)True
B)False
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