WorksheetsIRM Unit 1
Total questions: 12
Worksheet time: 3600secs
Which one of the following best describes inflation?
Stagnant price level in the economy
Momentum increase in the price of the goods
Increase in the general price level in the economy
Decrease in the general price level in the economy
The following are main reasons of why people should invest except for
Match or beat inflation
Reach financial goals
Increase opportunity cost
Reduce stress on achieving retirement goals
Money is required to
pay bills
pay income taxes
start a family and to provide for our children
pay day-to-day expenses during retirement
During retirement stage, one should reduce (a) expenses if income is lagging.
The concept of the principle layer of interest starts to accumulate on its own interest is known as (a)
Personal financial planning helps to:
preserve debts
increase wealth
use credit prudently
increase investment risk
obtain what is really want in each stage of life
A customer has decided to put his $20,000 savings into his savings account at an interest rate of 0.1% per annum instead of investing to earn a potential return of 2.4% per annum. Calculate his opportunity cost in percentage.
(a)
Define opportunity cost.
Explain what is Return of Investment (ROI).
An investment is considered as a good investment when the Return on Investment (ROI) is
zero
positive
negative
The formula for Return on Investment (ROI) can be represented as
Amount of return * Initial principal investment amount
Amount of return / Initial principal investment amount
Initial principal investment amount - Amount of return
Initial principal investment amount + Amount of return
Select the relevant financial goals associated with a client who is young, married and in her 30s
Save for children's education
Start retirement planning
Start an emergency fund
Pare down debts
Re-evaluate insurance requirements
