Financial Management Midterm Quiz #3

Financial management is important for both businesses and individuals.

• True
• False

The time value of money means that money today is generally worth more than the same amount in the future.

• True
• False

Saving money in a savings account is an example of a low-risk, low-return investment.

• True
• False

A budget is a plan for how you will spend your money.

• True
• False

Needs are things you must have to survive, while "wants" are things you desire but can live without.

• True
• False

Investing in a new company's stock is generally considered a higher risk than putting your money in a savings account.

• True
• False

Financial management involves making smart choices about spending, saving, and investing.

• True
• False

Budgeting helps you control your spending and avoid getting into debt.

• True
• False

The principle of risk and return suggests that there is a relationship between the amount of risk you take and the potential return you can earn.

• True
• False

Good financial management means prioritizing your essential expenses.

• True
• False