Principles of Financial Planning Answers

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1
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Planning to finance higher education helps people prepare for their financial future because it teaches them about

A
loans and interest.
B
savings accounts.
C
filing taxes.
D
short-term goals.
2
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Which results are more likely for someone without personal finance skills? Select three options.

A
larger long-term credit or loan costs
B
less preparation for emergencies
C
fewer utility expenses
D
simple long-term investment strategies
E
increased long-term challenges
3

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

A
food
B
shoes
C
video games
D
utility bills
4

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
5

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

A
number of dependents
B
money
C
career
D
property
E
investment
6

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

A
career
B
education
C
quality of life
D
neighborhood safety
7

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
8

Emma lives on a tight budget. She saves money and also makes intelligent choices when spending it. Which statements describe Emma’s financial skills? Select three options.

A
Emma is more prepared to meet her basic needs.
B
Emma is better prepared to avoid financial setbacks.
C
Emma is better able to avoid accumulating assets.
D
Emma is more prepared to face emergencies.
E
Emma is better able to avoid decision-making with her finances.
9

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

A
Needs
B
Wants
C
Risks
D
Assets
10

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.

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