AnswersPersonal Finance - SC 26-27 For CreditPrinciples of Financial Planning

3.2 Principles of Financial Planning Answers

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21
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What do financial planning skills ultimately enable an individual to do?

A
to prepare for the future
B
to process their own tax returns
C
to stop spending
D
to become wealthier without saving money
22
Free Preview

What do financial planning skills ultimately enable an individual to do?

A
to prepare for the future
B
to process their own tax returns
C
to stop spending
D
to become wealthier without saving money
23

This chart shows Dan’s budget:

Question illustration
A
Yes, Dan spent as much as he earned.
B
No, Dan should lower his savings account contribution.
C
Yes, Dan used his savings to cover extra expenses.
D
No, Dan should reduce his discretionary spending.
24

When studying finance or economics, the cost of a decision is also known as a(n)

A
personal cost.
B
financial cost.
C
long-term cost.
D
opportunity cost.
25

Which would be most helpful when considering a large expenditure that might require repeating payments? Select three options.

A
careful consideration of short-term goals
B
recording the number of assets you currently own
C
creating a budget to consider future income and spending
D
learning more about different kinds of accounts to manage money
E
learning about opportunity cost
26

A is a plan in which an individual balances available resources and expenses.

Answer:

budget

27

This chart shows Dan’s budget:

Question illustration
A
Yes, Dan spent as much as he earned.
B
No, Dan should lower his savings account contribution.
C
Yes, Dan used his savings to cover extra expenses.
D
No, Dan should reduce his discretionary spending.
28

To assess the risk and return involved in a purchase decision, which practical questions should a potential buyer ask? Select three options.

A
What can go wrong?
B
What are my friends buying?
C
How will it affect my social status?
D
What is the likely return?
E
Is the risk worth the return?
29

How do long-term financial goals differ from short-term financial goals?

A
Long-term goals require more money than short-term goals.
B
Long-term goals are more stable over time than short-term goals.
C
Long-term goals are less attainable than short-term goals.
D
Long-term goals require less preparation than short-term goals.
30

Which of these is the best example of an asset?

A
the electricity in a home
B
the antique diamond necklace someone is wearing
C
the coffee someone drank this morning
D
an old, used airline ticket
31

In personal finance, one makes decisions based on needs vs. wants. What is considered a need?

A
something one would like to have
B
something ones does not budget for
C
something one can afford
D
something one cannot live without
32

Personal finance skills have the most significant impact on an individual’s

A
career
B
education
C
quality of life
D
neighborhood safety

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