Chapter 1 Personal Finance - Bollinger

Question 1

The loss of a job or encountering an illness results in ____________ risk.

Accepted Answer

income

Question 2

Many Americans have money problems because of

Accepted Answer

Poor planning and weak money management habits

Question 3

An advantage of effective personal financial planning is:

Accepted Answer

Increased control of financial affairs

Question 4

A financial plan can only be created using a money management software package.

Accepted Answer

False

Question 5

Changes in personal, social, and economic factors may require you to

Accepted Answer

Review and revise your financial plan more frequently.

Question 6

Inflation is most harmful to people with incomes expected to increase.

Accepted Answer

False

Question 7

If inflation is expected to be 8 percent, how long will it take for prices to double?

Accepted Answer

9 years

Question 8

A goal of "saving $25 per month for a TV", concidering the SMART approach the goal lacks?

Accepted Answer

A time frame

Question 9

Which of the following would increase the interest rate for a loan?

Accepted Answer

Poor credit rating

Question 10

Opportunity costs refer to money already spent.

Accepted Answer

False

Question 11

The major function of personal financial planning is to

Accepted Answer

Achieve personal economic satisfaction.

Question 12

Short-term goals are usually achieved within the next year or so.

Accepted Answer

True

Question 13

Opportunity cost refers to

Accepted Answer

The trade-off of a decision.

Question 14

A financial plan is an informal report that analyzes past financial decisions.

Accepted Answer

False

Question 15

If a $10,000 investment earns a 4 % annual return, what should its value be after one year?

Accepted Answer

$10,400

Questions 15