FFM Latest Exam Study Guide with Complete
Solutions 2025
Personal finance - ANSWER - cash/credit management
- risk management
- tax planning
- investments
- retirement planning
- estate planning
Emergency fund (safety net) - ANSWER at least 3-6 months of living expenses
Financial literacy - ANSWER knowledge of facts, concepts, etc that are fundamental to
being smart about money
Financial responsibility - ANSWER accountability for your financial well-being
Financial success - ANSWER achievement of financial aspirations
Financial planning process - ANSWER ongoing process -- changes as your financial
situation and position in life change
5 basic steps to personal financial planning - ANSWER 1. evaluate financial health (track
expenses, check credit, etc)
2. define your financial goals
3. develop plan of action
4. implement your plan
, 5. review your progress, reevaluate, revise
Economy - ANSWER system of managing the productive and employment resources of a
country, state, or community
US federal govt - ANSWER attempt to regulate the country's overall economy
The Business Cycle (Economic Cycle) - ANSWER process by which the economy grows
and contracts over time
Phases in Business Cycle - ANSWER expansion, peak, contraction, trough
Expansion - ANSWER economy is increasing
Peak - ANSWER end of an expansion and beginning of contraction
Contraction - ANSWER economy is falling
Trough - ANSWER end of contraction and beginning of expansion
Recession - ANSWER recurring period of decline in total output, income, employment,
trade
- usually 6 months - 1 year
Double dip recession - ANSWER goes down again after starting to go up (within 1-2
years of first recession)
Solutions 2025
Personal finance - ANSWER - cash/credit management
- risk management
- tax planning
- investments
- retirement planning
- estate planning
Emergency fund (safety net) - ANSWER at least 3-6 months of living expenses
Financial literacy - ANSWER knowledge of facts, concepts, etc that are fundamental to
being smart about money
Financial responsibility - ANSWER accountability for your financial well-being
Financial success - ANSWER achievement of financial aspirations
Financial planning process - ANSWER ongoing process -- changes as your financial
situation and position in life change
5 basic steps to personal financial planning - ANSWER 1. evaluate financial health (track
expenses, check credit, etc)
2. define your financial goals
3. develop plan of action
4. implement your plan
, 5. review your progress, reevaluate, revise
Economy - ANSWER system of managing the productive and employment resources of a
country, state, or community
US federal govt - ANSWER attempt to regulate the country's overall economy
The Business Cycle (Economic Cycle) - ANSWER process by which the economy grows
and contracts over time
Phases in Business Cycle - ANSWER expansion, peak, contraction, trough
Expansion - ANSWER economy is increasing
Peak - ANSWER end of an expansion and beginning of contraction
Contraction - ANSWER economy is falling
Trough - ANSWER end of contraction and beginning of expansion
Recession - ANSWER recurring period of decline in total output, income, employment,
trade
- usually 6 months - 1 year
Double dip recession - ANSWER goes down again after starting to go up (within 1-2
years of first recession)
