Setting Goals in Personal Finance

Which activity is a part of personal financial planning?

• setting municipal budgets

• planning for retirement

• investing in social security trust funds

• investing in disaster relief funds (DRFs)

Which economic condition is best suited for attaining personal financial goals?

• high rate of inflation

• high unemployment figures

• slow economic growth

• low interest rates

According to Rule of 72, how much time will it take the prices to double at the inflation rate of 4 percent?

• six years

• nine years

• twelve years

• eighteen years

Janice is working on her personal budget. She plans her investments wisely, but still worries about the risks involved with her investments. Which is the best way she can avoid market risks?

• keeping money in a safe

• diversifying portfolio

• investing only in real estate

• investing only in the secondary market

Max has earnings from his salary of $30,000. He contributes $600 toward his retirement account. He receives interest on his savings of $600 and dividends on mutual funds of $300. What is his adjusted income?

• $30,300

• $30,900

• $30,000

• $31,200

A realistic way of approaching your financial goal is by using the SMART approach for financial planning. What is the SMART approach for financial planning?

• specific goals

• measurable

• action-oriented financial activities

• realistic financial goals

• time bound financial goals

Write the correct answer in the box. What will be the total amount earned by investing $2,500 for 1.5 years, at a simple interest rate of 10% annually?