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FNCE 1125 Chapter 1 Review Flashcards | StudBud
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FNCE 1125 Chapter 1 Review
FNCE 1125 Chapter 1 Review
20 terms
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StudBud Administration
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Overview of a Financial Plan
Flashcards
20 cards
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Practice quiz
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Questions
20
Answers
1
Why might you need to revise your plan from time to time in order to make it more realistic?
All of the above
Your financial position has changed
You are unable to follow the financial plan
You are unwilling to follow the financial plan
2
Protecting your assets and income is achieved through:
Insurance
Mutual funds
RRSPs
Credit cards
3
Alex has become stressed by his tight budget and is unwilling to stick to his plan. He should:
Revise his plan
Implement the best plan
Establish his goals
Re-evaluate his goals
4
Which of the following would be considered a medium term goal?
Paying for your two-year old child's college education
Saving for a down payment to purchase a house in 3 years
Buying new clothes for school this month
Retiring in 10 years
5
You should wait for major milestones before creating a personal financial plan
True
False
6
Your net worth is:
None of the above
Total assets plus total liabilities
Total assets minus total liabilities
Total liabilities minus total assets
7
A SMART goal is:
Not necessary in financial planning
Specific, measurable, actionable, realistic, and timely
Specialized, monetary, assets, realistic, time management
Created by a professional financial planner
8
Opportunity cost represents:
The financial cost of an opportunity
Short vs long term financial decisions
Evaluating different alternatives for financial decisions
What you give up as a result of making a decision
9
Credit management is not a very important part of overall liquidity management
False
True
10
Personal cash flow examines one's income and expenses
True
False
11
An emergency fund is required in financial planning to:
Manage risk
Maintain adequate liquidity
Maintain your standard of living
Maintain credit rating
12
Liquidity refers to your access to ready cash, including savings and credit
True
False
13
Which is NOT a key component of a financial plan?
Protecting your assets and income
Budgeting and tax planning
Investing your money
Borrowing from friends and family
14
Once you create a personal financial plan:
You should review it every 10 years
You should review it periodically
You should share it with everyone
You never have to look at it again
15
The FPSC was created to provide ethical standards in financial planning.
False
True
16
Every financial advisor acts ethically in your best interest
False
True
17
The personal savings rate of Canadians has decreased for the past 30 years
True
False
18
Your ability to accept potential losses in an investment is called:
Risk management
Risk tolerance
Investment risk
Retirement planning
19
Psychology has no effect on one's financial decisions
True
False
20
Estate planning describes the process of how your wealth will be distributed after your death
False
True
