Quiz 1 09/03/09 Name ________________________
(Please print your name neatly!)
True or false
1.____ A major purpose of personal financial planning is future economic security. (T)
2._____ Personal financial planning starts by creating a plan of action. (F)
3._____ Inflation reduces the buying power of a dollar. (T)
4. One aspect of financial planning is to control your use of credit. Which aspect of financial
planning does this deal with? (a)
A. Borrowing
B. Spending
C. Managing Risk
D. Investing
E. Retirement and Estate Planning
5. ____________ goals relate to personal relationships, health, and education. (d)
A. Durable-product
B. Short-term
C. Consumable-product
D. Intangible-purchase
E. Intermediate
6. The final step in the financial planning process is to (c) A.
B.
C.
D.
create a financial plan of action.
develop financial goals.
evaluate and revise your actions.
implement your financial plan.
7. The changing cost of money is referred to as ____________ risk. (a)
A. interest-rate
B. inflation
C. economic
D. trade-off
E. personal
8. If you put $1,000 in a saving account and make no further deposits, what type of calculation
would provide you with the value of the account in 20 years? (a)
A. future value of a single amount
B. simple interest
C. present value of a single amount
D. present value of a series of deposits
E. future value of a series of deposits
9. Lynn Roy wants to travel around the world. Lynn Roy has several options she can pursue. She
can continue to work full time to earn the money she needs for her trip. She can work part time
so that she can still earn some money but have the time necessary to complete her trip. She can
take full retirement so that she has all the time necessary to complete her trip. Which step in the
financial planning process does this scenario demonstrate? (c)
A. Determining her current financial situation
B. Developing her financial goals
C. Identifying alternative courses of action
D. Evaluating her alternatives
E. Implementing her financial plan
10. Which of the following goals would be the easiest to implement and measure its
accomplishment? (c)
A. "Reduce our debt payments."
B. "Save funds for an annual vacation."
C. "Save $100 a month to create a $4,000 emergency fund."
D. "Invest $2,000 a year for retirement."