Questions for Personal Finance Final 1 Personal Financial
Questions for Personal Finance Final 1 Personal Financial
Questions for Personal Finance Final
1Personal Financial Planning isa…
aLife-Long Process
bOnly necessary for the wealthy
cWhat you do before retiring
2The process of FinancialPlanning is…
aDefine goals, identify choices,choosing, redefining goals, assessing the current situation, evaluatingchoices, identifying new choices, evaluating new choices, choosing, assessingthe resulting situation over and over again
bDefine goals, assessing thecurrent situation, identifying choices, evaluating choices, choosing assessingthe resulting situation, redefining goals, identifying new choices, evaluatingnew choices, choosing, reassessing the resulting situation over and over again
cIdentify choices, choosing,identifying new choices, assessing the results, assessing current situation,defining goals, evaluating choices, assessing the resulting situation,redefining goals, evaluating new choices, choosing
3Investors can invest in capitalor credit markets by…
aBuying stocks
bBuying Bonds, government orcorporate
cLending a mortgage
dAll of the above
4Sunk costs are…
aCosts that have already beenspent
bWhat you get for buying afixer-upper
cThe overhead, likemanufacturing that went into a product
5Which financial statement showsa “snap shot†of your financial situation, for a given point in time?
aIncome Statement
bBalance Sheet
cCash Flow Statement
6The process for developing abudget is…
Create a budget, monitor the outcomes andanalyze variance, define goals and gather data, form expectations, adjustbudget and expectations
Define goals and gather data, formexpectations, create budget, monitor outcomes and analyze variance, adjustbudget, expectations or goals
Define goals and gather data, createbudget, form expectations and reconcile goals and data, monitor outcomes and analyzevariances, adjust budget, expectations or goals
7In 2008, if your income wasbetween 78,850 and 164,550 your tax bracket was…
a28%
b33%
c15%
8Property is taxed at the stateand federal level
aTrue
bFalse
9Money Market Mutual Funds arerisker than CDs
aTrue
bFalse
10 The five factors thatdetermine your credit score are…
payment history, current debt, length ofcredit history, new credit issued to you, types of credit you have
home ownership, credit card ownership,student loans, late payments, debit cards
income, car ownership, home ownership,number of credit cards, financial portfolio
11 It is a good idea to alwayskeep a balance on your credit card
aTrue
bFalse
12 When buying a home and taking out a 30 year loan at 5% interest,ignoring all taxes and closing costs, what will be your monthly mortgagepayment on a 250,000 home, putting 20% down?
a120785
b107364
c93944
13 Home insurance covers property of renters, or property kept in anapartment regularly rented
aTrue
bFalse
14 A Health Savings Account is…
aTax deductible
bEmployee funded
cYou can take it with you whenyou change jobs
dAll of the above
15 When saving for retirement,starting early and saving regularly are key to your success
aTrue
bFalse
16 A traditional IRA is
aTaxed when funds are put in
bNot limited
cContributions can be made untilyou are705
17 Commodities and Derivatives are…
aAgricultural products
bEnergy sources
cPrevious metal
dCurrency
eAll of the above
18 Risk tolerance is based on…
aAbility and willingness
bAccount size and return needs
cYour childhood and spendingneeds
19 The Dow Jones Average includes
a30 leading industrial corporations
bAll companies
c60 leading corporations
20 When you short a security you expect…
aIts value will increase
bIts value will decrease
cIts value will stay the same
21 You want to retire in 20 years with 3,000,000 saved Assuming 8% annual rate of investments, howmuch will you need now to reach this goal?
a$643,645
b$521,285
c708,103
22 What is the future value of $1000 after two years, invested at 10%annually?
a$1200
b$1210
c$1220
23 You purchased your home 8 years ago, and it has gone up in valuefrom $100,000 to $120,500 What has beenthe annual rate of appreciation?
a175%
b25%
c236%
24 If your home value continues to grow at the same rate, as the abovequestion, how long will it take for the home to be worth $150,000?
a1526 years
b939 years
c872 years
25 Yeah, you just bought a newhome! You spend $250,000 and put 20%down, financing the balance at 6% for the next 25 years What is your monthly payment?
a$161075
b$1,28860
c$3,86581
26 Carol believes she needs 1,000,000 to retire comfortably If she puts $20,000 at the end of year intoher 401k and she earns 8%, how many years before she can retire?
a18
b21
c25
27 Mary Lou borrows $14,000 to buy a car at 6% interest If she makes a monthly payment of $42591,how long will it take her to pay off her loan?
a24 months
b30 months
c36 months
28 Zeb thinks Mary Louâ€s car is sick and now wants his own The car he found costs $12,000 He has $2,000 for a down payment and he plansto finance the remainder for 36 months at 6% compounded monthly What is his monthly payment?
a27324
b30422
c31827
29 Yolanda wants to have $200,000 in the bank in five years so she canquit her job, take a year off and travel around the world How much must she save every month for thenext 5 years if she can earn 8%?
a144815
b214396
c272195
30 Xavier wants to buy a $250,000 house in five years He plans to make a 20% down payment andfinance the remainder How much must hesave each month to have the required down payment if he can earn 10% on hismoney?
a55422
b61149
c64569
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