1.When a person faces a trade-off and must give up something by making a choice,
this is referred to as
- taking out a loan.
- opportunity cost.
- the evaluation of alternatives.
- a decision-making process.
- a dilemma.
2.When bankruptcy is experienced, this can be the result of poor decisions in the _____ component of financial planning.
- sharing
- saving
- borrowing
- lending
- protecting
3.From an economic standpoint, prices in the marketplace are determined through
- the stock market.
- the government.
- employment.
- supply and demand.
- interest rates.
4.Loan risk can increase with _____.
- constant interest rates
- a short time to maturity
- lower consumer prices
- rising consumer prices
- a good credit rating
5.The future value of an account in which $2,000 is deposited each year for 5 years, and which earns 4%, is approximately _____ after 5 years.
- $2,000
- $2,400
- $10,000
- $400
- $10,800
6.Higher employment levels can be attributed to
- lower consumer prices.
- reduced employment levels.
- lower interest rates.
- higher employment levels.
- increased consumer spending.
7.When it comes to the financial planning process, the first step is to
- develop financial goals.
- implement the financial plan.
- evaluate and revise your actions.
- analyze your current personal and financial situation.
- create a financial plan of action.
8.If a person wants to determine the current value of a desired amount for the future, the following computation would be used.
- Simple interest
- Present value of a single amount
- Future value of a series of deposits
- Future value of a single amount
- Present value of a series of deposits
9.Brad Opper has a goal of "saving $50 a month for vacation." Brad's goal lacks
- a realistic perspective.
- specific terms.
- the type of action to be taken.
- a purpose.
- a time frame.
10.If John Smith is making plans to make holiday purchases at the end of the year, he is setting a(n) _____ goal.
- intermediate
- long-term
- short-term
- intangible
- durable
11.You want to determine the current value of an annuity that pays $350 a month for the next 5 years. What type of calculation would provide you with this value?
- Future value of a single amount
- Simple interest
- Present value of a single amount
- Future value of a series of deposits
- Present value of a series of deposits
12.If an employee has tax-deferred benefits, this means that the benefits are
- taxed at some point in the future.
- not subject to state income tax.
- exempt from federal income tax.
- taxed at a special rate.
13.A cash flow statement reports a person's or a family's
- net worth.
- plan for spending.
- value of investments.
- balance of savings.
- current income and payments.
14.A _____ résumé would best be used by an employee who has worked in many fields and has a variety of skills in a variety of work-related categories.
- targeted
- goal-oriented
- chronological
- functional
- career change
15.When a prospective employee presents a _____ résumé, this means that educational and work experiences are presented in a reverse time sequence.
- goal-oriented
- functional
- sequenced
- chronological
- database
16. _____ refers to the natural abilities people possess that can be brought to the workplace.
- Knowledge
- Attitudes
- Survival skills
- Occupation techniques
- Aptitudes
17.The distinction between current liabilities and long-term liabilities can be made based upon the
- amount owed.
- due date of the debt.
- interest rate charged.
- financial situation of the creditor.
- current economic conditions.
18.A savings amount of $3,500 on deposit for 4 years at 4% interest (compounded annually) would earn about
- $ 650.
- $ 600.
- $560.
- $140.
- $350.
19.A person's financial position can be improved if he or she experiences
- increased liabilities.
- reductions in earnings.
- additional credit purchases.
- an increase in investments and savings.
- lower amounts deposited in savings.
20.Which of the following situations best represents an individual facing insolvency?
- Assets $30,000; liabilities $37,000
- Assets $78,000; net worth $22,000
- Liabilities $45,000; net worth $6,000
- Assets $56,000; annual expenses $60,000
- Annual cash inflows $45,000; liabilities $50,000