Question 1

Estate planning is primarily concerned with increasing your wealth.

Accepted Answer

A) True 
 B)False  False

Question 2

The four-step approach to financial planning begins by evaluating your success in goal achievement.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is the correct opportunity cost to consider if you are trying to choose one 3-hour elective course (A) over another 3-hour elective course (B) ?

Accepted Answer

A)  The tuition cost of a 3-hour course
B)  Your total tuition costs for the year with and without the course
C)  The information and learning from (
B)  that you will give up if you choose (
A)  
D)  The marginal costs of taking one more course

Question 4

Many people consider financial independence to be their most important financial goal.

Accepted Answer

A) True 
 B)False

Question 5

Life-cycle financial planning is defined as the tools and techniques of building an estate.

Accepted Answer

A) True 
 B)False

Question 6

An example of diminishing marginal satisfaction is

Accepted Answer

A)  enjoying a second pizza more than the first.
B)  enjoying both pizzas equally.
C)  enjoying the second pizza less than the first.
D)  not enjoying either pizza.

Question 7

Sue Hank has just indicated that the extra benefits from getting an A in her personal finance course are not worth the extra effort she must give.Sue used marginal analysis in making her decision.

Accepted Answer

A) True 
 B)False

Question 8

The socioeconomic system that is likely in the near future will be one where

Accepted Answer

A)  government plays a greater role in solving financial problems.
B)  employers provide greater retirement benefits for their employees.
C)  families will be more self-reliant for their financial futures.
D)  huge increases in family savings eliminates the need for financial planning.

Question 9

Which statement is most appropriate?

Accepted Answer

A)  Business cycles will continue in the future.
B)  The economy is headed into long-run recession.
C)  A recession usually does not impact college recruiting.
D)  Recessions are not likely to occur in the future.

Question 10

An advantage of investing in the stock market is that returns are seldom less than 10 percent each year.

Accepted Answer

A) True 
 B)False

Question 11

All things the same,achieving financial goals helps us to achieve non-financial goals.

Accepted Answer

A) True 
 B)False

Question 12

The CFP designation is reserved for those individuals that have successfully completed a series of exams covering all aspects of financial planning.

Accepted Answer

A) True 
 B)False

Question 13

Estate planning is primarily concerned with how best to distribute your wealth during your life and at death.

Accepted Answer

A) True 
 B)False

Question 14

An opportunity cost is generally thought of as

Accepted Answer

A)  money placed in an investment opportunity.
B)  the chance to make money in an investment.
C)  the benefits given up by choosing one alternative over another.
D)  the benefits gained by choosing one alternative over another.

Question 15

Which alternative below is not true of current consumption?

Accepted Answer

A)  It refers to goods and services used in the current time period.
B)  Generally,more of it leads to greater levels of satisfaction.
C)  It can increase through current borrowing.
D)  It is usually less desirable than future consumption.

Question 16

As your consumption increases during a period of time,the satisfaction you enjoy from it usually increases at an even greater rate.

Accepted Answer

A) True 
 B)False

Question 17

Life-cycle financial planning means

Accepted Answer

A)  that life-long goals are recognized and attended to at each phase in the life cycle.
B)  attending to life-long goals sequentially through life buy insurance when you are young,plan retirement when you are old,etc.
C)  planning an estate to pass to your heirs so that the family's life-cycle never ends.
D)  gearing life-long financial decisions to minimize your total income tax liability. A

Question 18

The deductibility of mortgage interest for tax purposes is an example of a selectively rewarding tax system.

Accepted Answer

A) True 
 B)False  True

Question 19

A feature of our current tax system is that all income is taxed uniformly.

Accepted Answer

A) True 
 B)False

Question 20

In the future,the government is likely to play a greater role in providing retirement benefits.

Accepted Answer

A) True 
 B)False

Exam 1: Financial Planning: Why Its Important to You

Estate planning is primarily concerned with increasing your wealth.

Correct AnswerverifiedFalse

The four-step approach to financial planning begins by evaluating your success in goal achievement.

Correct AnswerverifiedShow Answer

Which of the following is the correct opportunity cost to consider if you are trying to choose one 3-hour elective course (A) over another 3-hour elective course (B) ?

Correct AnswerverifiedShow Answer

Many people consider financial independence to be their most important financial goal.

Correct AnswerverifiedShow Answer

Life-cycle financial planning is defined as the tools and techniques of building an estate.

Correct AnswerverifiedShow Answer

An example of diminishing marginal satisfaction is

Correct AnswerverifiedShow Answer

Sue Hank has just indicated that the extra benefits from getting an A in her personal finance course are not worth the extra effort she must give.Sue used marginal analysis in making her decision.

Correct AnswerverifiedShow Answer

The socioeconomic system that is likely in the near future will be one where

Correct AnswerverifiedShow Answer

Which statement is most appropriate?

Correct AnswerverifiedShow Answer

An advantage of investing in the stock market is that returns are seldom less than 10 percent each year.

Correct AnswerverifiedShow Answer

All things the same,achieving financial goals helps us to achieve non-financial goals.

Correct AnswerverifiedShow Answer

The CFP designation is reserved for those individuals that have successfully completed a series of exams covering all aspects of financial planning.

Correct AnswerverifiedShow Answer

Estate planning is primarily concerned with how best to distribute your wealth during your life and at death.

Correct AnswerverifiedShow Answer

An opportunity cost is generally thought of as

Correct AnswerverifiedShow Answer

Which alternative below is not true of current consumption?

Correct AnswerverifiedShow Answer

As your consumption increases during a period of time,the satisfaction you enjoy from it usually increases at an even greater rate.

Correct AnswerverifiedShow Answer

Life-cycle financial planning means

Correct AnswerverifiedA

The deductibility of mortgage interest for tax purposes is an example of a selectively rewarding tax system.

Correct AnswerverifiedTrue

A feature of our current tax system is that all income is taxed uniformly.

Correct AnswerverifiedShow Answer

In the future,the government is likely to play a greater role in providing retirement benefits.

Correct AnswerverifiedShow Answer

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A

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True

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