Personal Financial Plan Assessment

Short-term goals cover a time period of one to two years.

• True

• False

Budgeting finances requires calculating _________ and __________.

• Income; expenses

• Investments; savings

• Utility; opportunity cost

• Inflation; taxes

____________ explains how a person changes financial position, earnings, consumption and savings throughout the life cycle.

• Financial evolution

• Money life cycle

• Portfolio growth

• Family life cycle

Budgets assist in reorganizing finances to reduce _________ or increase ________.

• problems; happiness

• Funds; expenses

• Debt; savings

• Consistency; originality

If income exceeds expenses, which of the following is recommended?

• Increase income sources

• Go on vacation

• Decrease income sources

• Research investment and savings options

Anyone can open a 401K savings plan.

• True

• False

Which of the following is NOT true of a Roth IRA?

• Can be withdrawn at any time

• Applies a 10 percent tax penalty on any withdrawals made before the age of 59.5

• Does not require taxes paid on the interest

• Does not reduce tax liability

Common stock differs from preferred stock in which of the following ways?

• Voting rights

• Exchange rates

• Callable features

• Liquidity

A ________ account has a higher rate of return, but a ________ account has a lower required minimum balance.

• Savings; money market

• Money market; savings

• Checking; savings

• Savings; checking

Which of the following accurately describes stocks?

• Employee-sponsored retirement benefit plans

• Savings accounts which include tax benefits

• Investments providing ownership of public companies

• Contributions for the government required of people