Name: Class: Date:
TEST BANK FOR
PFIN 8th Edition by Randall Billingsley, Lawrence Gitman, Michael Joehnk
Chapter 1-15 Answers are at the end of Each Chapter
chapter 1
Indicate whether the statement is true or false.
1. Saving $400 for a large, flat-screen TV within the next four months is an example of a short-term goal.
a. True
b. False
2. Commission-based financial planners charge fees based on the complexity of the plan they prepare.
a. True
b. False
3. In the United States, salaries tend to be higher in the Northeast and West than in the South.
a. True
b. False
4. Setting long- and short-term career goals helps in career planning.
a. True
b. False
5. Financial planning takes place in a dynamic economic environment created by the actions of the government, business,
and consumers.
a. True
b. False
6. You should discuss your financial goals and attitudes toward money with your partner.
a. True
b. False
7. Accumulating wealth for later years is called estate planning.
a. True
b. False
8. It is easy to change your partner’s financial style, so there is no need for financial planning to resolve conflicts
regarding money matters.
a. True
Copyright Cengage Learning. Powered by Cognero. Page 1
,Name: Class: Date:
b. False
9. Tax plans are closely tied to investment plans.
a. True
b. False
10. Recessions and financial crises will always result in job loss.
a. True
b. False
11. The longer you wait to begin retirement planning, the less you are likely to have in your retirement fund.
a. True
b. False
12. Career plans should not be changed after long- and short-term career goals are set.
a. True
b. False
13. You should limit your spending to no more than 20 percent more than what you earn.
a. True
b. False
14. Morgan has an annual income of $45,000 and spends $30,000 for current needs. Morgan’s average propensity to
consume is 80 percent.
a. True
b. False
15. The most effective way to achieve financial objectives is through personal financial planning.
a. True
b. False
16. Tangible (physical) assets are earning assets that are held for the returns they promise.
a. True
b. False
17. Two people with significantly different incomes can have equal average propensities to consume because of
differences in their standard of living.
a. True
b. False
18. The need for financial planning declines as your income increases.
a. True
b. False
Copyright Cengage Learning. Powered by Cognero. Page 2
,Name: Class: Date:
19. Retirement/planning/includes/taking/advantage/of/and/managing/employer-sponsored/benefits.
a. True
b. False
20. Geographic/factors/affect/your/earning/power.
a. True
b. False
21. Fee-only/financial/planners/earn/commissions/for/the/products/they/sell.
a. True
b. False
22. Marital/status/affects/the/income/level/of/individuals.
a. True
b. False
23. Your/purchase,/saving,/investment,/and/retirement/plans/and/decisions/are/not/influenced/by/the/present/state/of/the/e
conomy.
a. True
b. False
24. For/employees/of/large/firms,/managing/employee/benefits/is/an/important/part/of/financial/planning.
a. True
b. False
25. Short-
term/planning/should/include/creating/and/maintaining/an/emergency/fund/with/at/least/six/months’/worth/of/income.
a. True
b. False
26. The/federal/government/delegates/its/regulation/of/economic/activity/function/to/businesses/and/consumers.
a. True
b. False
27. The/support/of/philanthropic/organizations/is/a/material/item/that/contributes/to/our/quality/of/life.
a. True
b. False
28. The/average/propensity/to/consume/is/commonly/viewed/as/a/key/determinant/of/standard/of/living.
a. True
b. False
Copyright/Cengage/Learning./Powered/by/Cognero. Page/3
, Name: Class: Date:
29. Financial/planning/can/improve/your/standard/of/living.
a. True
b. False
30. When/you/get/your/first/job,/you/should/make/a/good/financial/plan/that/you/can/follow/without/making/changes/until/y
ou/retire.
a. True
b. False
31. Living/costs/are/constant/throughout/the/country.
a. True
b. False
32. Standard/of/living/is/defined/as/the/necessities,/comforts,/and/luxuries/desired/by/an/individual/or/a/family.
a. True
b. False
33. The/decisions/you/make/in/career/planning/are/independent/of/the/decisions/you/make/in/financial/planning.
a. True
b. False
34. Most/people/tend/to/be/more/liberal/about/their/expenditures/during/a/recession/or/crisis.
a. True
b. False
Indicate/the/answer/choice/that/best/completes/the/statement/or/answers/the/question.
35. Tax/planning/is/most/common/among/individuals/with:
a. low/incomes.
b. high/incomes.
c. no/incomes.
d. erratic/incomes.
e. decreasing/incomes.
36. Which/of/the/following/would/NOT/be/considered/an/asset?
a. Savings/account
b. Land
c. Credit/card/balance
d. Jewelry
e. Money/market/funds
37. When/applying/for/a/job/within/a/large/nationwide/company,/you/notice/that/salaries/for/the/same/position/differ/based/o
n/geographic/region./In/which/of/the/following/regions/would/you/most/likely/receive/the/highest/salary?
Copyright/Cengage/Learning./Powered/by/Cognero. Page/4
TEST BANK FOR
PFIN 8th Edition by Randall Billingsley, Lawrence Gitman, Michael Joehnk
Chapter 1-15 Answers are at the end of Each Chapter
chapter 1
Indicate whether the statement is true or false.
1. Saving $400 for a large, flat-screen TV within the next four months is an example of a short-term goal.
a. True
b. False
2. Commission-based financial planners charge fees based on the complexity of the plan they prepare.
a. True
b. False
3. In the United States, salaries tend to be higher in the Northeast and West than in the South.
a. True
b. False
4. Setting long- and short-term career goals helps in career planning.
a. True
b. False
5. Financial planning takes place in a dynamic economic environment created by the actions of the government, business,
and consumers.
a. True
b. False
6. You should discuss your financial goals and attitudes toward money with your partner.
a. True
b. False
7. Accumulating wealth for later years is called estate planning.
a. True
b. False
8. It is easy to change your partner’s financial style, so there is no need for financial planning to resolve conflicts
regarding money matters.
a. True
Copyright Cengage Learning. Powered by Cognero. Page 1
,Name: Class: Date:
b. False
9. Tax plans are closely tied to investment plans.
a. True
b. False
10. Recessions and financial crises will always result in job loss.
a. True
b. False
11. The longer you wait to begin retirement planning, the less you are likely to have in your retirement fund.
a. True
b. False
12. Career plans should not be changed after long- and short-term career goals are set.
a. True
b. False
13. You should limit your spending to no more than 20 percent more than what you earn.
a. True
b. False
14. Morgan has an annual income of $45,000 and spends $30,000 for current needs. Morgan’s average propensity to
consume is 80 percent.
a. True
b. False
15. The most effective way to achieve financial objectives is through personal financial planning.
a. True
b. False
16. Tangible (physical) assets are earning assets that are held for the returns they promise.
a. True
b. False
17. Two people with significantly different incomes can have equal average propensities to consume because of
differences in their standard of living.
a. True
b. False
18. The need for financial planning declines as your income increases.
a. True
b. False
Copyright Cengage Learning. Powered by Cognero. Page 2
,Name: Class: Date:
19. Retirement/planning/includes/taking/advantage/of/and/managing/employer-sponsored/benefits.
a. True
b. False
20. Geographic/factors/affect/your/earning/power.
a. True
b. False
21. Fee-only/financial/planners/earn/commissions/for/the/products/they/sell.
a. True
b. False
22. Marital/status/affects/the/income/level/of/individuals.
a. True
b. False
23. Your/purchase,/saving,/investment,/and/retirement/plans/and/decisions/are/not/influenced/by/the/present/state/of/the/e
conomy.
a. True
b. False
24. For/employees/of/large/firms,/managing/employee/benefits/is/an/important/part/of/financial/planning.
a. True
b. False
25. Short-
term/planning/should/include/creating/and/maintaining/an/emergency/fund/with/at/least/six/months’/worth/of/income.
a. True
b. False
26. The/federal/government/delegates/its/regulation/of/economic/activity/function/to/businesses/and/consumers.
a. True
b. False
27. The/support/of/philanthropic/organizations/is/a/material/item/that/contributes/to/our/quality/of/life.
a. True
b. False
28. The/average/propensity/to/consume/is/commonly/viewed/as/a/key/determinant/of/standard/of/living.
a. True
b. False
Copyright/Cengage/Learning./Powered/by/Cognero. Page/3
, Name: Class: Date:
29. Financial/planning/can/improve/your/standard/of/living.
a. True
b. False
30. When/you/get/your/first/job,/you/should/make/a/good/financial/plan/that/you/can/follow/without/making/changes/until/y
ou/retire.
a. True
b. False
31. Living/costs/are/constant/throughout/the/country.
a. True
b. False
32. Standard/of/living/is/defined/as/the/necessities,/comforts,/and/luxuries/desired/by/an/individual/or/a/family.
a. True
b. False
33. The/decisions/you/make/in/career/planning/are/independent/of/the/decisions/you/make/in/financial/planning.
a. True
b. False
34. Most/people/tend/to/be/more/liberal/about/their/expenditures/during/a/recession/or/crisis.
a. True
b. False
Indicate/the/answer/choice/that/best/completes/the/statement/or/answers/the/question.
35. Tax/planning/is/most/common/among/individuals/with:
a. low/incomes.
b. high/incomes.
c. no/incomes.
d. erratic/incomes.
e. decreasing/incomes.
36. Which/of/the/following/would/NOT/be/considered/an/asset?
a. Savings/account
b. Land
c. Credit/card/balance
d. Jewelry
e. Money/market/funds
37. When/applying/for/a/job/within/a/large/nationwide/company,/you/notice/that/salaries/for/the/same/position/differ/based/o
n/geographic/region./In/which/of/the/following/regions/would/you/most/likely/receive/the/highest/salary?
Copyright/Cengage/Learning./Powered/by/Cognero. Page/4
