Lesson One Questions

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SUNY Canton *

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301

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Finance

Date

Feb 20, 2024

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Question 1 2.5 / 2.5 points Probably the most important determinant of your future earnings will be Question 2 2.5 / 2.5 points During which stage of the financial life cycle do many people make their biggest investment, the purchase of a home? your highest level of education obtained. your seniority with your company. joining a labor union. the size of the company where you will work. Stage 1: wealth accumulation Stage 2: the golden years Stage 3: the retirement years Stage 4: the formative years

Question 3 2.5 / 2.5 points Alysha has $500 in monetary assets and $5,000 in current liabilities. What is her current ratio? Question 5 0 / 2.5 points Which of the following financial documents would you to use to create a financial plan? Question 6 2.5 / 2.5 points What is the present value of an IOU for $1,000 due to be paid in two years, if the discount rate is 8%? .100 percent .10 times 10 times 100 percent Balance sheet Income statement Budget Cash budget All of the above

Question 7 2.5 / 2.5 points A series of equal dollar payments at the end of each period for "x" number of time periods is Question 8 2.5 / 2.5 points Arnold Diaz Arnold learned something very valuable as a teenager from his dad. He was told to invest $1,000 at 12% interest at age 20 and leave it alone until age 65. Arnold's dad knew that one strategy that wealthy people use is to exercise self-discipline to never touch this long-term plan. Arnold is very happy he applied his dad's advice. Approximately how long will it take Arnold's savings to grow into $2,000? $810.77 $683.26 $857.34 $766.40 $885.00 an annuity due. an annuity. an equal installment annuity. a deferred annuity. a complex annuity. 60 months 5 years

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Question 9 2.5 / 2.5 points Suppose that you had deposited $100 in a bank account for each of the last 5 years. What annual interest rate is attached to this account if there is now (at the end of the fifth year) $758.92 in the account? Question 10 2.5 / 2.5 points The major reason to make a financial plan is to Question 11 2.5 / 2.5 points While each person's financial plan is different, some common factors guide all sound financial plans: flexibility, liquidity, protection, and minimization of taxes. 8.5 years 6 years 10% 16% 19% 21% 23% allow for a surplus. account for your spending. serve as a tax planning guide. see where you are overspending or underspending. achieve your financial goals. True False

Question 12 2.5 / 2.5 points According to a recruiting survey, the most common mistake made by job interviewees is talking too much. Question 13 2.5 / 2.5 points When you are involved in ________ planning, you are planning for your eventual death and the distribution of your wealth to your heirs. Question 14 2.5 / 2.5 points If liquid funds are not available, an unexpected need, such as a job loss or injury may force you to Question 15 2.5 / 2.5 points What is the present value of a $100,000 cash flow to be received at the end of each of the next 15 years from an account that earns an annual rate of 10%? True False prenatal beneficiary estate actuarial None of the above. cash in a longer-term investment. borrow money fast. take on unexpected debt repayments. all of the above. $1,500,000

Question 16 2.5 / 2.5 points While reviewing your current financial plan, you discover that you most likely won't achieve your long term financial goals. What should you do now? Question 17 2.5 / 2.5 points You invest $1,000 at age 20 at an annual rate of return of 12%. By the time you are 62 you will have amassed approximately Question 18 2.5 / 2.5 points An emergency fund, or rainy-day fund, is comprised of liquid assets sufficient to cover 3.5 years of expenditures. Question 19 2.5 / 2.5 points $523,450 $976,455 $760,608 Look at increasing your income. Look at cutting back on your expenses. Look at revising your goals. All of these would be realistic things to do. $47,040. $116,723. $504,000. $67,214. True False

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Arnold Diaz Arnold learned something very valuable as a teenager from his dad. He was told to invest $1,000 at 12% interest at age 20 and leave it alone until age 65. Arnold's dad knew that one strategy that wealthy people use is to exercise self-discipline to never touch this long-term plan. Arnold is very happy he applied his dad's advice. If his savings account had earned a more conservative 9% annual rate of return, Arnold's savings would be approximately ________ less by age 68. Question 20 2.5 / 2.5 points A financial plan is only concerned with your future earnings and expenses. An examination of your current financial situation is not so important. Question 21 2.5 / 2.5 points Someone has offered you the opportunity to purchase an IOU. The IOU will pay back a total of $500 in three years. How much would you be willing to pay for that IOU today if you want to earn an annual rate of return of 16%? $4,132 $62,585 $167,805 $1,871,663 True False $380.45 $422.63 $320.33

Question 22 2.5 / 2.5 points A one-time investment of $1,500 at a 10 percent annual rate of return yields $2,196 in two years. The $2,196 is known as the Question 23 2.5 / 2.5 points If you set your calculator to the "end" mode your calculator will assume cash flows occur at the end of each time period. Question 24 2.5 / 2.5 points A vehicle leased in your name is an example of a tangible asset that you would list on your balance sheet. Question 25 2.5 / 2.5 points The interest charge on your credit card statement should be listed on your personal income statement as a variable expense. $292.63 present value. compound value. future value. annuity value principal plus interest. True False True False True False

Question 26 2.5 / 2.5 points A physical asset such as a high-definition, flat-screen TV or a Harley Davidson motorcycle is called a(n) Question 27 2.5 / 2.5 points Step 3 of the personal financial planning process is "Develop a Plan of Action." According to your text, which of the following is not one of the "common concerns" that should guide all financial plans? Question 28 2.5 / 2.5 points The longest stage of the Life Cycle of Financial Planning is? Question 29 2.5 / 2.5 points What is the maximum that you would be willing to loan your brother for a $100 IOU if he promises to pay you back at the end of the year? You want to investment. tangible asset. liability. financial asset. Liquidity Flexibility Long-term profitability Protection Minimization of taxes Stage 1 Stage 2 Stage 3 They are all the same

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earn an annual rate of return of 12%. Question 30 2.5 / 2.5 points Planning and budgeting requires Question 31 2.5 / 2.5 points Sarah has $15,000 in monetary assets, $48,000 in annual living expenses, a $20,000 balance on her car loan, and $60,000 of equity in her house. What is her month's living expenses covered ratio? Question 32 2.5 / 2.5 points A perpetuity is an annuity that continues forever. Question 33 2.5 / 2.5 points $88.00 $92.73 $89.29 $82.00 control. financial restraint. discipline. All of these. 1.125 times 3.75 times 3.0 times There is not enough information to answer this question. True False

The median net worth for families where the head of the household is less than 35 years old is? Question 34 2.5 / 2.5 points A method by which one can compare cash flows across time-either as what a future cash flow is worth today (present value) or what an investment made today will be worth in the future (future value)-is called Question 35 2.5 / 2.5 points Annual public school tuition and fees are three times more expensive than private school tuition and fees. Question 36 2.5 / 2.5 points A compound annuity involves depositing or investing an equal sum of money at the end of each time period for a certain number of time periods and allowing it to grow. $25,000 $12,500 $100,000 $6,676 compounding. simple interest. time-value of money. opportunity cost. True False True False

Question 37 2.5 / 2.5 points As long as a financial planner is certified you need not worry about his ability to provide you with the correct financial plan for your situation. Question 38 2.5 / 2.5 points You have just remembered that four years ago you placed $1,000 in a bank account. If the bank was paying an annual rate of return of 8% during that time, how much should you have in your forgotten account? Question 39 2.5 / 2.5 points Suppose that you want to purchase some land to build a homestead in the future. You can afford payments of $5,000 each year and want to pay the loan back over the next 20 years. Assuming no down payment is required, how much can you borrow if the bank will charge you an annual interest rate of 12%? Question 40 2.5 / 2.5 points Which of the following adheres to the financial principle "just do it?" True False $1,253.03 $1,321.92 $1,360.49 $1,301.92 $100,985.45 $48,231.47 $37,347.22 $160,262.21

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Done The amount you can spend is what's left after you put aside your savings. Pay yourself last. It's much easier to save than to spend. All of the above