Financial planning is important because it helps you to

reach financial goals and protect your assets

The financial planning process

considers changing needs & goals in different stages of life

A stock broker or financial consultant

Gives financial advice to clients

A person's debt ratio shows the relationship between debt & net worth. The lower the ratio the

better off financially the person is.

In creating a budget, Ann realizes that her expenses exceed her income. Immediately she should

reduce or eliminate some expenses

Discretionary income is

The difference between total income and living expenses

Why hold an investment for over 1 year rather than selling it in less than a year

the capital gains will be taxed at a lower rate

It is expensive to be a smoker. One of the reasons cigarettes are so expensive is that

the government imposes an excise tax on them.

Financial planning helps individuals to

have strategies for saving and investing

Which of the following will help you the least in managing your money

getting advice from your friends

U are short on cash each month. U always use credit cards to pay rent and buy food

Do a budget. Find ways to reduce expenses or increase income

A clear understanding of your personal values will

enable U to make choices that reflect what is important to U

Jane saw a breakfast cereal advertised on TV & insisted that her mother purchase this cereal.

This shows the power of ads to create demand

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W!SE Review - Money Management Part 1

21 termsStudBud Administration13 plays

A review of Money Management concepts to prepare students for the W!SE Financial Literacy Exam

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Questions 21

Answers

1
Financial planning is important because it helps you to
have higher expectations
reach financial goals and protect your assets
achieve all personal goals
eliminate risk on investments
2
The financial planning process
should not include lifetime goals
considers changing needs & goals in different stages of life
guarantees that assets will increase
does not need to be revised for changing income and needs
3
A term that best describes your gross pay after taxes are deducted is
assets
net worth
take-home pay
total revenues
4
Something you are working to achieve within a defined period of time is
a goal
a dream
an ideal
a value
5
A stock broker or financial consultant
Does not have to be licensed
Gives financial advice to clients
Guarantees a return on investment
Sells money orders and certified checks
6
Spreading one's assets across several types of saving and investment products to manage risk is
Allocation
Diversification
Pooling
Budgeting
7
You want to gain control over your income and spending so that you will be able to save money.
You should get advice from a friend
You should develop a retirement plan
You should develop a budget
You should apply for a loan
8
The following is usually considered a variable expense
electric bill payment
mortgage payment
car payment
rent payment
9
A person's debt ratio shows the relationship between debt & net worth. The lower the ratio the
better off financially the person is.
worse off financially the person is.
more liquid assets the person has.
less liquid assets the person has.
10
In creating a budget, Ann realizes that her expenses exceed her income. Immediately she should
ignore her budget until she has more income
apply for a loan
reduce or eliminate some expenses
open an IRA account
11
Discretionary income is
Income that has been spent
Wages plus investment income
The difference between total income and living expenses
A capital gain
12
Why hold an investment for over 1 year rather than selling it in less than a year
the capital gains will be taxed at a lower rate
Brokers will not charge any fees for selling the investment.
the capital gains will be taxed at a higher rate
money earned on the investment will be considered tax-free
13
The following careers would be possible choices for someone interested in money and finance
Musician
Insurance actuary
Social worker
Psychologist
14
It is expensive to be a smoker. One of the reasons cigarettes are so expensive is that
the government imposes an excise tax on them.
the tobacco industry imports most of the tobacco.
Tobacco supply is controlled by the Federal Trade Commission
their cost is controlled by the Food and Drug Administration
15
Financial planning helps individuals to
achieve all goals by set target dates
have strategies for saving and investing
eliminate risk on investments
guarantee future income
16
Which of the following will help you the least in managing your money
setting goals and keeping a budget for your net income
planning ahead for large expenses and resist impulse buying
paying your rent/mortgage payment and utility bills on time
getting advice from your friends
17
U are short on cash each month. U always use credit cards to pay rent and buy food
Do a budget. Find ways to reduce expenses or increase income
U must apply for additional credit cards
U should borrow money from a relative
Ignore it. Things are bound to get better
18
A clear understanding of your personal values will
encourage you to spend money on material goods
enable U to make choices that reflect what is important to U
cause anxiety as U make consumer and financial decisions
enable U to save effectively
19
Money that is left over after paying taxes, fixed and other essential living expenses, is
Play money
Net surplus
Disposable income
Net pay
20
U budgeted $200 a month for clothing. This month U spent $150 on clothing. U have
a budget deficit.
a budget variance.
an income overage.
an outflow deficit.
21
Jane saw a breakfast cereal advertised on TV & insisted that her mother purchase this cereal.
This shows the power of ads to create demand
This shows how all ad can make children misbehave
This shows how ads focus on discouraging demand for products
This is an example of ads failure to reach parents

W!SE Review - Money Management Part 1 Flashcards | StudBud