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