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WorksheetsPersonal Financial Planning Final Exam
Total questions: 20
Worksheet time: 3hrs 20mins
What is the family life cycle?
A series of stages a family goes through over time
A financial plan for retirement
A method to calculate taxes
A type of savings account
What is budgeting?
A type of investment
A way to avoid paying taxes
A process of creating a plan to spend your money
A method to increase income
How are the family life cycle and budgeting related?
They both are unrelated to personal finance
They both focus on short-term financial goals
They both require constant updating due to changes in life stages
They both involve planning for vacations
What is a short-term financial goal?
Going on a vacation
Planning for retirement
Saving for a child's education
Buying a house
Which stage is NOT part of the family life cycle?
Couple, retired
Middle-aged, married with children
Older, single
Younger, single
What is the primary purpose of a budget?
To avoid paying bills
To increase debt
To track expenses and income
To eliminate all spending
What should you do if expenses exceed income?
Take a vacation
Increase spending
Cut down on unnecessary expenses
Ignore the problem
What is a Certificate of Deposit (CD)?
A retirement plan
An investment in the stock market
A savings account with a fixed term and interest rate
A type of checking account
What is a 401K plan?
A government bond
An employer-sponsored retirement plan
A personal savings account
A type of loan
Individual Retirement Accounts (IRAs) ________.
Are an employer- sponsored benefit plan which provides individuals with the chance to put a portion of their earnings in a financial portfolio.
Earn interest over time but have a limited number of transfers and withdraws allowed.
Allow individuals to open an account and begin saving funds toward retirement with tax benefits.
Are similar o savings accounts but has higher interest rates, fixed terms and a fixed interest rate.
What is the main advantage of a savings account?
High interest rates
Unlimited transactions
No need to pay taxes
FDIC insurance up to $250,000
What is a mutual fund?
A type of savings account
A single stock investment
A government bond
A portfolio of securities managed professionally
What is the purpose of an emergency fund?
To invest in the stock market
To provide a financial cushion for emergencies
To fund vacations
To pay off all debts
What is a traditional IRA?
A retirement account with tax-deductible contributions
A type of mutual fund
A savings account with no tax benefits
A government pension plan
What is the impact of a low unemployment rate on personal finance?
Decreases savings
Increases taxes
Increases monetary supply and savings
Has no impact
Budgeting finances requires calculating __________.
Income and expenses
Investments and savings
Utility and opportunity cost
Inflation and taxes
What is the first step to opening a banking account?
Choose a financial institution
Research banking products
Pick the desired type of checking account
Visit the bank’s website
Which of the following accurately describes stocks?
Employee-sponsored retirement benefit plans
Savings accounts, which include tax benefits
Contributions to the government required of the people
Investments providing ownership of public companies.
Select ALL of the following choices which are true of a Roth IRA.
Applies a 10 percent tax penalty on any withdrawals made before the age of 59.5
Can be withdrawn at any time
Does not reduce tax liability
Does not require taxes paid on interest
Because the family life cycle changes, goals require __________.
Long-term target dates
Priorities
Lots of thought
Constant updating
