Financial Literacy Chapter 3 Review

Which of the following questions would you be most likely to ask when creating a plan for investing?

• What expenses should I anticipate?

• Should I use a credit card for cash shortfalls?

• How much risk can I tolerate?

• How much money should I keep in my savings account?

The amount of money you have left over each month is most directly related to your plans to manage ________.

• cash

• liquidity

• investments

• long-term savings

Which of the following is most important to creating a successful financial plan?.

• Tolerating a high degree of risk

• Establishing clear goals

• Focusing on long-term goals

• Reducing variable expenses

Financial goals that you plan to accomplish within the next year should be categorized as ________ goals.

• short-term

• long-term

• immediate

• intermediate-term

 Which of the following is the best example of a long-term goal?

•  Earning a total of $200 more per month

• Saving 15% of all your earnings

• Earning a two-year college degree

•  Saving enough to fully pay for your children's college educations

Financial goals that will take from one to five years to accomplish should be categorized as ________ goals.

•  life-long

• short-term

•  intermediate-term

• long-term

 Before you can effectively make plans for your financial future, you need to ________.

• seek a professional opinion about your forecasts

• rate your variable expenses by importance

• evaluate your current financial position

• monitor your progress

After keeping track of his income and expenses for two months, Ellis made predictions about his monthly cash inflows and outflows for the next year. Ellis made a(n) ________.

• budget

• forecast

• intermediate-term goal

• short-term goal

For individuals, (a)   is referred to as income.

A(n) ________ is anything that an individual spends money on.

• liability

• expense

• risk

• income