Principles of Financial Planning

Question 1

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

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opportunity cost.

Question 2

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

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Short-term goals are more immediate than long-term goals.

Question 3

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?

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4, 1, 2, 3

Question 4

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

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quality of life

Question 5

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?

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What can go wrong?; What is the likely return?; Is the risk worth the return?

Question 6

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

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Long-term goals are more stable over time than short-term goals.

Question 7

Which of these is the best example of an asset?

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the antique diamond necklace someone is wearing

Question 8

Planning to finance higher education helps people prepare for their financial future because it teaches them about

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loans and interest.

Question 9

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

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video games

Principles of Financial Planning Answers

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