True/False
Indicate whether the
statement is true or false.
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1.
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Once a financial plan is in place by an individual there is no need to ever
change it.
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2.
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Financial planning can help you use the money you earn to achieve your financial
goals
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3.
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All else equal, an increase in inflation will cause
investors to require a higher rate of return on an asset.
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4.
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Most individuals will reach their financial goals without
planning.
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5.
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Your safety trumps your need to eat according to Maslow.
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6.
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You would rather die of starvation than steal food from another starving person
according to the Heirarchy of Needs.
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7.
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When a person is self-actualized, what their friends think becomes less
important according to Maslow.
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Multiple Choice
Identify the choice that
best completes the statement or answers the question.
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8.
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Being financially secure involves balancing what you make
with
a. | your investments. | c. | your retirement
plans. | b. | what you spend. | d. | your current level of
debt. |
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9.
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Which one of the following is not one of the five
basic steps in personal financial planning?
a. | Evaluate your financial health. | d. | Let an accountant review your plan. | b. | Define your financial goals. | e. | Implement your
plan. | c. | Develop a plan of action. |
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10.
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The purpose of reviewing your progress, reevaluating, and
revising your plan (step 5) is to
a. | create a perfect document. | d. | not be
embarrassed by the tax preparation person. | b. | establish a fixed plan for
life. | e. | prevent an income tax audit. | c. | adjust as necessary to keep
you on target to reach your goals. |
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11.
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Which of the following typically occur(s) during stage one of the financial life
cycle?
a. | initial goal setting | d. | home purchase | b. | insurance planning | e. | all the above | c. | saving for
goals |
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12.
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What is (are) the primary activity(ies) during stage two of
the financial life cycle?
a. | Help supplement your children's
budgets. | d. | Solidify retirement. | b. | Get out of debt. | e. | both C and D above. | c. | Fine tune your financial
plans. |
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13.
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What is the primary factor in determining your income
level?
a. | education attained | d. | the company you
work for | b. | who you know | e. | your spouse's
occupation | c. | your
age |
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14.
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Suppose that you are a 20-year-old college student. What
stage of the financial life cycle are you currently in?
a. | Stage 1 | c. | Stage
3 | b. | Stage 2 | d. | Stage 4 |
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15.
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The first step to take in measuring your financial condition
is to create
a. | your debt ratio. | d. | a list of
liabilities. | b. | a personal balance
sheet | e. | a checking account | c. | an income
statement. |
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16.
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Liabilities are best described as
a. | monetary items of value that you own. | d. | adjusted gross income. | b. | financial debts and
obligations for which you owe. | e. | intangible debts and obligations. | c. | your net worth. |
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17.
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Net worth, or your general level of worth, is found
by
a. | subtracting expenses from income. | d. | dividing monthly debt (less mortgage payment) by monthly
income. | b. | dividing monetary assets by current
liabilities. | e. | subtracting current liabilities from monetary assets. | c. | subtracting liabilities from assets. |
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18.
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A listing of income and expenditures covering the same time period is a
a. | balance sheet. | c. | statement of net worth. | b. | income
statement. | d. | statement of
financial ratios. |
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19.
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Which of the following are not typically found on a balance sheet?
a. | monetary assets. | d. | automobiles. | b. | mortgage payments. | e. | personal property. | c. | market value of a
home. |
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20.
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The current value of an investment at some future point in
time is also known as
a. | future value. | c. | compound
annuity. | b. | present value. | d. | the time value of
money. |
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21.
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When you leave your $7.00 interest payment in your savings
account, you are
a. | creating wealth. | c. | reinvesting. | b. | establishing a savings
habit. | d. | losing money, invest it elsewhere. |
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22.
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An investment of $200 at 10% yields $242 in two years. The
$242 is known as the
a. | present value. | d. | future
value. | b. | compound interest. | e. | annuity
sum. | c. | principle plus interest. |
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23.
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This helpful investment rule tells you how many years it
takes for a sum of money to double.
a. | compound interest. | d. | future
value. | b. | rule of 72 | e. | present
value. | c. | rule of 100 |
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24.
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What is $150 to be received in four years worth today if the
rate of interest is 12%?
a. | $236.03 | d. | $455.60 | b. | $95.33 | e. | $49.39 | c. | $716.90 |
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25.
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As a future graduation present, you uncle has just placed
$6,000 in a bank account that will earn 6%. How much will be on deposit when you graduate in four
years?
a. | $1,731.55 | d. | $20,790,63 | b. | $4,752.56 | e. | $7,574.86 | c. | $26,247.70 |
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26.
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Suppose that you had deposited $100 in a bank account for
each of the last 5 years. How much did you earn if there is now (at the end of the fifth year)
$758.92 on deposit?
a. | 10% | d. | 21% | b. | 16% | e. | 23% | c. | 19% |
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27.
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Maslow determined that we respond to situations in life according to a heirarchy
of needs. The heirarchy does not include:
a. | Physiological needs | c. | Esteem needs | b. | Psychological needs | d. | Safety needs |
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28.
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According to Maslow, we will fulfill the need to eat before we will satisfy this
need:
a. | Feel safe. | d. | Learn to play an instrument. | b. | Have adequate
clothing. | e. | None of the
above. | c. | Are surrounded by family and friends. | f. | All of the
above |
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29.
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Making sure we have adequate clothing fulfills the__________________
need.
a. | Physiological | c. | Esteem | b. | Safety | d. | Belonging |
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Multiple Response
Identify one or more
choices that best complete the statement or answer the question.
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30.
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Choose the ‘needs’ listed below that don’t apply
to the lesson on Maslow’s Heirarchy of Needs. (Choose all that apply)
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