,
, Test Bank for Personal Financial Planning, 13th Edition,
w w w w w w w
by J. Gitman, Michael D. Joehnk, and R Billingsley.
w w w w w w w w w
Chapter w1—Understanding wthe wFinancial wPlanning wProcess
TRUE/FALSE
1. Standard wof wliving wis wdefined was wthe wnecessities, wcomforts, wand wluxuries wdesired wby wan windividual wor
wgroup.
ANS: w T PTS: w w 1 DIF: Easy OBJ: w w LO: w1-1
NAT: w BUSPROG: wReflective wthinking STA: w DISC: wFinancial wMarkets wand wInterest
wRates wKEY: w Bloom's: wKnowledge
2. Your waverage wpropensity wto wconsume wis wthe wpercentage wof weach wdollar wof wincome, won wthe
waverage, wthat wis wspent wfor wcurrent wneeds wrather wthan wsavings.
ANS: w T PTS: w w 1 DIF: Easy OBJ: w w LO: w1-1
NAT: w BUSPROG: wReflective wthinking STA: w DISC: wFinancial wMarkets wand wInterest
wRates wKEY: w Bloom's: wKnowledge
3. A wgood wfinancial wplan wcompleted wwhen wone wis win wtheir w30s wwill wtypically wlast wa wlifetime.
ANS: w F PTS: w w 1 DIF: Challenging OBJ: w w LO: w1-2
NAT: w BUSPROG: wReflective wthinking STA: w DISC: wFinancial wMarkets wand wInterest
wRates wKEY: w Bloom's: wSynthesis
4. Financial wplanning wis wa wcontinuing, wlife-long wprocess.
ANS: w T PTS: w w 1 DIF: Easy OBJ: w w LO: w1-2
NAT: w BUSPROG: wReflective wthinking STA: w DISC: wFinancial wMarkets wand wInterest
wRates wKEY: w Bloom's: wComprehension
5. Financial wplanning wcan wimprove wyour wstandard wof wliving.
ANS: w T PTS: w w 1 DIF: Easy OBJ: w w LO: w1-1
NAT: w BUSPROG: wReflective wthinking STA: w DISC: wFinancial wMarkets wand wInterest
wRates wKEY: w Bloom's: wComprehension
6. Current wconsumption wis winversely wrelated wto wsaving wfor wthe wfuture.
ANS: w T PTS: w w 1 DIF: Challenging OBJ: w w LO: w1-1
NAT: w BUSPROG: wReflective wthinking STA: w DISC: wFinancial wMarkets wand wInterest
wRates wKEY: w Bloom's: wAnalysis
7. About w20% wof wAmericans wsay wretirement wplanning wis wtheir wmost wpressing wfinancial wconcern.
, ANS: w F PTS: w w 1 DIF: Moderate OBJ: w w LO: w1-1
NAT: w BUSPROG: wReflective wthinking STA: w DISC: wFinancial wMarkets wand wInterest
wRates wKEY: w Bloom's: wKnowledge
8. The wmost weffective wway wto wachieve wfinancial wobjectives wis wthrough wfinancial wplanning.
ANS: w T PTS: w w 1 DIF: Moderate OBJ: w w LO: w1-1
NAT: w BUSPROG: wReflective wthinking STA: w DISC: wFinancial wMarkets wand wInterest
wRates wKEY: w Bloom's: wComprehension
9. Defining wfinancial wgoals wis wan wimportant wfirst wstep win wpersonal wfinancial wplanning wprocess.
ANS: w T PTS: w w 1 DIF: Easy OBJ: w w LO: w1-2
NAT: w BUSPROG: wReflective wthinking STA: w DISC: wFinancial wMarkets wand wInterest
wRates wKEY: w Bloom's: wComprehension
10. Two wpersons wwith wequal waverage wpropensities wto wconsume wwill wnot wnecessarily whave wequal
wstandards wof wliving wbecause wof wdifferences win wincome.
ANS: w T PTS: w w 1 DIF: Challenging OBJ: w w LO: w1-1
NAT: w BUSPROG: wReflective wthinking STA: w DISC: wFinancial wMarkets wand wInterest
wRates wKEY: w Bloom's: wEvaluation
11. The wneed wfor wfinancial wplanning wdeclines was wyour wincome wincreases.
ANS: w F PTS: w w 1 DIF: Moderate OBJ: w w LO: w1-1
NAT: w BUSPROG: wReflective wthinking STA: w DISC: wFinancial wMarkets wand wInterest
wRates wKEY: w Bloom's: wSynthesis
12. Current wconsumption weffects wfuture wconsumption.
ANS: w T PTS: w w 1 DIF: Challenging OBJ: w w LO: w1-1
NAT: w BUSPROG: wReflective wthinking STA: w DISC: wFinancial wMarkets wand wInterest
wRates wKEY: w Bloom's: wAnalysis
13. A wperson wwho whas w$2,000 wmonthly wincome wand wspends w$1,800 wmonthly whas wan waverage
wpropensity wto wconsume wof w90%.
ANS: w T PTS: w w 1 DIF: Challenging OBJ: w w LO: w1-1
NAT: w BUSPROG: wReflective wthinking STA: w DISC: wFinancial wMarkets wand wInterest
wRates wKEY: w Bloom's: wEvaluation
14. A wperson wmaking w$35,000 wand wspending w$30,800 whas wan waverage wpropensity wto wconsume wof w80%.
ANS: w F PTS: w w 1 DIF: Challenging OBJ: w w LO: w1-1
NAT: w BUSPROG: wReflective wthinking STA: w DISC: wFinancial wMarkets wand wInterest
wRates wKEY: w Bloom's: wEvaluation
15. Most wfamilies wfind wit wdifficult wto wdiscuss wmoney wmatters.
ANS: w T PTS: w w 1 DIF: Easy OBJ: w w LO: w1-2
, Test Bank for Personal Financial Planning, 13th Edition,
w w w w w w w
by J. Gitman, Michael D. Joehnk, and R Billingsley.
w w w w w w w w w
Chapter w1—Understanding wthe wFinancial wPlanning wProcess
TRUE/FALSE
1. Standard wof wliving wis wdefined was wthe wnecessities, wcomforts, wand wluxuries wdesired wby wan windividual wor
wgroup.
ANS: w T PTS: w w 1 DIF: Easy OBJ: w w LO: w1-1
NAT: w BUSPROG: wReflective wthinking STA: w DISC: wFinancial wMarkets wand wInterest
wRates wKEY: w Bloom's: wKnowledge
2. Your waverage wpropensity wto wconsume wis wthe wpercentage wof weach wdollar wof wincome, won wthe
waverage, wthat wis wspent wfor wcurrent wneeds wrather wthan wsavings.
ANS: w T PTS: w w 1 DIF: Easy OBJ: w w LO: w1-1
NAT: w BUSPROG: wReflective wthinking STA: w DISC: wFinancial wMarkets wand wInterest
wRates wKEY: w Bloom's: wKnowledge
3. A wgood wfinancial wplan wcompleted wwhen wone wis win wtheir w30s wwill wtypically wlast wa wlifetime.
ANS: w F PTS: w w 1 DIF: Challenging OBJ: w w LO: w1-2
NAT: w BUSPROG: wReflective wthinking STA: w DISC: wFinancial wMarkets wand wInterest
wRates wKEY: w Bloom's: wSynthesis
4. Financial wplanning wis wa wcontinuing, wlife-long wprocess.
ANS: w T PTS: w w 1 DIF: Easy OBJ: w w LO: w1-2
NAT: w BUSPROG: wReflective wthinking STA: w DISC: wFinancial wMarkets wand wInterest
wRates wKEY: w Bloom's: wComprehension
5. Financial wplanning wcan wimprove wyour wstandard wof wliving.
ANS: w T PTS: w w 1 DIF: Easy OBJ: w w LO: w1-1
NAT: w BUSPROG: wReflective wthinking STA: w DISC: wFinancial wMarkets wand wInterest
wRates wKEY: w Bloom's: wComprehension
6. Current wconsumption wis winversely wrelated wto wsaving wfor wthe wfuture.
ANS: w T PTS: w w 1 DIF: Challenging OBJ: w w LO: w1-1
NAT: w BUSPROG: wReflective wthinking STA: w DISC: wFinancial wMarkets wand wInterest
wRates wKEY: w Bloom's: wAnalysis
7. About w20% wof wAmericans wsay wretirement wplanning wis wtheir wmost wpressing wfinancial wconcern.
, ANS: w F PTS: w w 1 DIF: Moderate OBJ: w w LO: w1-1
NAT: w BUSPROG: wReflective wthinking STA: w DISC: wFinancial wMarkets wand wInterest
wRates wKEY: w Bloom's: wKnowledge
8. The wmost weffective wway wto wachieve wfinancial wobjectives wis wthrough wfinancial wplanning.
ANS: w T PTS: w w 1 DIF: Moderate OBJ: w w LO: w1-1
NAT: w BUSPROG: wReflective wthinking STA: w DISC: wFinancial wMarkets wand wInterest
wRates wKEY: w Bloom's: wComprehension
9. Defining wfinancial wgoals wis wan wimportant wfirst wstep win wpersonal wfinancial wplanning wprocess.
ANS: w T PTS: w w 1 DIF: Easy OBJ: w w LO: w1-2
NAT: w BUSPROG: wReflective wthinking STA: w DISC: wFinancial wMarkets wand wInterest
wRates wKEY: w Bloom's: wComprehension
10. Two wpersons wwith wequal waverage wpropensities wto wconsume wwill wnot wnecessarily whave wequal
wstandards wof wliving wbecause wof wdifferences win wincome.
ANS: w T PTS: w w 1 DIF: Challenging OBJ: w w LO: w1-1
NAT: w BUSPROG: wReflective wthinking STA: w DISC: wFinancial wMarkets wand wInterest
wRates wKEY: w Bloom's: wEvaluation
11. The wneed wfor wfinancial wplanning wdeclines was wyour wincome wincreases.
ANS: w F PTS: w w 1 DIF: Moderate OBJ: w w LO: w1-1
NAT: w BUSPROG: wReflective wthinking STA: w DISC: wFinancial wMarkets wand wInterest
wRates wKEY: w Bloom's: wSynthesis
12. Current wconsumption weffects wfuture wconsumption.
ANS: w T PTS: w w 1 DIF: Challenging OBJ: w w LO: w1-1
NAT: w BUSPROG: wReflective wthinking STA: w DISC: wFinancial wMarkets wand wInterest
wRates wKEY: w Bloom's: wAnalysis
13. A wperson wwho whas w$2,000 wmonthly wincome wand wspends w$1,800 wmonthly whas wan waverage
wpropensity wto wconsume wof w90%.
ANS: w T PTS: w w 1 DIF: Challenging OBJ: w w LO: w1-1
NAT: w BUSPROG: wReflective wthinking STA: w DISC: wFinancial wMarkets wand wInterest
wRates wKEY: w Bloom's: wEvaluation
14. A wperson wmaking w$35,000 wand wspending w$30,800 whas wan waverage wpropensity wto wconsume wof w80%.
ANS: w F PTS: w w 1 DIF: Challenging OBJ: w w LO: w1-1
NAT: w BUSPROG: wReflective wthinking STA: w DISC: wFinancial wMarkets wand wInterest
wRates wKEY: w Bloom's: wEvaluation
15. Most wfamilies wfind wit wdifficult wto wdiscuss wmoney wmatters.
ANS: w T PTS: w w 1 DIF: Easy OBJ: w w LO: w1-2
