1. Personal Financial Planning is a…
Life-Long Process
Only necessary for the wealthy
What you do before retiring
2. The process of Financial Planning is…
Define goals, identify choices, choosing, redefining goals, assessing the current situation, evaluating choices, identifying new choices, evaluating new choices, choosing, assessing the resulting situation over and over again
Define goals, assessing the current situation, identifying choices, evaluating choices, choosing assessing the resulting situation, redefining goals, identifying new choices, evaluating new choices, choosing, reassessing the resulting situation over and over again
Identify 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
3. Investors can invest in capital or credit markets by…
Buying stocks
Buying Bonds, government or corporate
Lending a mortgage
All of the above.
4. Sunk costs are…
Costs that have already been spent
What you get for buying a fixer-upper
The overhead, like manufacturing that went into a product
5. Which financial statement shows a “snap shot” of your financial situation, for a given point in time?
Income Statement
Balance Sheet
Cash Flow Statement
6. The process for developing a budget is…
Create a budget, monitor the outcomes and analyze variance, define goals and gather data, form expectations, adjust budget and expectations
Define goals and gather data, form expectations, create budget, monitor outcomes and analyze variance, adjust budget, expectations or goals
Define goals and gather data, create budget, form expectations and reconcile goals and data, monitor outcomes and analyze variances, adjust budget, expectations or goals
7. In 2008, if your income was between 78,850 and 164,550 your tax bracket was…
28%
33%
15%
8. Property is taxed at the state and federal level
True
False
9. Money Market Mutual Funds are risker than CDs
True
False
10. The five factors that determine your credit score are…
payment history, current debt, length of credit 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 always keep a balance on your credit card.
True
False
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 mortgage payment on a 250,000 home, putting 20% down?
1207.85
1073.64
939.44
13. Home insurance covers property of renters, or property kept in an apartment regularly rented.
True
False
14. A Health Savings Account is…
Tax deductible
Employee funded
You can take it with you when you change jobs
All of the above
15. When saving for retirement, starting early and saving regularly are key to your success.
True
False
16. A traditional IRA is
Taxed when funds are put in
Not limited
Contributions can be made until you are70.5
17. Commodities and Derivatives are…
Agricultural products
Energy sources
Previous metal
Currency
All of the above
18. Risk tolerance is based on…
Ability and willingness
Account size and return needs
Your childhood and spending needs
19. The Dow Jones Average includes
30 leading industrial corporations
All companies
60 leading corporations
20. When you short a security you expect…
Its value will increase
Its value will decrease
Its value will stay the same
21. You want to retire in 20 years with 3,000,000 saved. Assuming 8% annual rate of investments, how much will you need now to reach this goal?
$643,645
$521,285
708,103
22. What is the future value of $1000 after two years, invested at 10% annually?
$1200
$1210
$1220
23. You purchased your home 8 years ago, and it has gone up in value from $100,000 to $120,500. What has been the annual rate of appreciation?
1.75%
2.5%
2.36%
24. If your home value continues to grow at the same rate, as the above question, how long will it take for the home to be worth $150,000?
15.26 years
9.39 years
8.72 years
25. Yeah, you just bought a new home! You spend $250,000 and put 20% down, financing the balance at 6% for the next 25 years. What is your monthly payment?
$1610.75
$1,288.60
$3,865.81
26. Carol believes she needs 1,000,000 to retire comfortably. If she puts $20,000 at the end of year into her 401k and she earns 8%, how many years before she can retire?
18
21
25
27. Mary Lou borrows $14,000 to buy a car at 6% interest. If she makes a monthly payment of $425.91, how long will it take her to pay off her loan?
24 months
30 months
36 months
28. Zeb thinks Mary Lou’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 plans to finance the remainder for 36 months at 6% compounded monthly. What is his monthly payment?
273.24
304.22
318.27
29. Yolanda wants to have $200,000 in the bank in five years so she can quit her job, take a year off and travel around the world. How much must she save every month for the next 5 years if she can earn 8%?
1448.15
2143.96
2721.95
30. Xavier wants to buy a $250,000 house in five years. He plans to make a 20% down payment and finance the remainder. How much must he save each month to have the required down payment if he can earn 10% on his money?
554.22
611.49
645.69
