sdgshh

Q1: A budget is best described as

A plan for managing income and expenses

Q2: The main purpose of personal financial planning

Achieve personal economic satisfaction

Q3: A financial plan is

A report summarizing current financial situation, plans, and strategies

Q4: Example of a tangible asset

A car

Q5: Financial goals should be

Specific, measurable, and time-bound

Q6: First step in financial planning

Determine your current financial situation

Q7: Final step in financial planning

Review and

revise your actions

Q8: Opportunity cost refers to

Value of the next best alternative forgone

Q9: Net worth equals

Total assets − total liabilities

Q10: Income statement shows

Income and expenses over a period of time

Q11: Example of a liquid asset

Checking account

Q12: Long-term liability example

Mortgage

Q13: Budget variance occurs when

Actual spending differs from budgeted spending

Q14: Cash flow statement differs from a budget

It records actual results, not plans

Q15: A financial plan should be

Reviewed and updated regularly

Q16: When creating a financial plan, consider

Your values and goals

Q17: Example of a fixed expense

Rent payment

Q18: Example of a variable expense

Groceries

Q19: Net worth increases when

Assets increase or liabilities decrease

Q20: Purpose of a balance sheet

Shows financial position at a specific time

Q21: Example of a current liability

Credit card balance

Q22: Money management refers to

Day-to-day financial activities

Q23: Cash flow statement shows

Income and expenses for a specific period

Q24: To increase savings

Pay yourself first

Q25: Emergency fund helps

Provide money for unexpected expenses

Q26: Financial goals should be

Realistic and based on resources

Q27: When planning for the future

Adjust goals as life changes

Q28: Career choice most affects

Income and wealth accumulation

Q29: Tax avoidance strategies

Reduce taxes within the law

Q30: Time value of money used for

Valuing a series of future cash flows

Q31: To avoid unwelcome adjustments

Be conservative in expectations

Q32: As family responsibility increases, risk tolerance

Decreases

Q33: Present value of a future sum increases when

Discount rate decreases

Q34: Individual income tax return filed on

Form 1040

Q35: Micro factors influencing personal finance EXCEPT

Unemployment

Q36: Paying proportionally more taxes with more income is

Progressive tax

Q37: If actual income < budgeted, next year’s budget should use

Actual result of previous year

Q38: U.S. tax code principle

Everyone should help finance government by ability to pay

Q39: PV of $5,000 per year for 2 years at 4%

$9,430.47

Q40: Expected value of an event

Sum of outcomes × their probabilities

Q41: Budget surplus occurs when

Income exceeds expenses

Q42: PV of annuity increases when

Payment amount increases

Q43: Macro factors for capital budget

All the above (inflation, unemployment, economic cycle)

Q44: Taxes most relevant for personal planning

Income taxes

Q45: Taxes may be imposed by all EXCEPT

Wards and precincts

Q46: Forecast next year’s expenses best by

Using past financial records

Q47: Repairs to replace a broken roof are

Capital expenditures

Q48: If estimated conservatively, operating budget

Underestimates income

Q49: Life stage: few assets, high risk tolerance, career focus

Early adulthood

Q50: Borrowing to buy a home provides

Earlier access to housing