Principles of Financial Planning Answers

_____ are items such as utilities, rent, and food—items that one can’t do without.

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

In American society, which of these is an example of a want?

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

There are four steps in solving one’s personal financial challenges:1. considering opportunity costs2. assessing risks and returns 3. setting short- and long-term goals4. assessing needs and wantsWhich of these is the correct order of these steps?

What is included in an individual’s personal assets? Select three options.

Which of these is the best example of an asset?

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

To assess the risk and return involved in a purchase decision, which practical questions should a potential buyer ask? Select three options.What can go wrong?What are my friends buying?How will it affect my social status?What is the likely return?Is the risk worth the return?

This chart shows Dan’s budget: