TEST BANK
Personal Financial Planning, 13th Edition,
by Gitman, Joehnk, and Billingsley.
All chapters covered.
,Chapter1—UnderstandingtheFinancialPlanningProcess
lkj lkj lkj lkj lkj
TRUE/FALSE
1. Standard of livingis defined as the necessities, comforts, and luxuries desired by an individual or group. ANS:
lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj l k j lkj
lT k j PTS: 1 lkjlkjl k j DIF: Easy OBJ: LO: 1-1 lkjlkjl k j lkj
NAT: BUSPROG: Reflective thinkinglkjl k j l kj lkj STA: DISC: Financial Markets and Interest Rates
lkjl k j lkj lkj lkj lkj lkj
KEY: Bloom's: Knowledge lkjl k j lkj
2. Your average propensity toconsume is the percentage of each dollar of income, on the average,that is spent
lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj l k j lkj
for current needs rather than savings.
lkj lkj lkj lkj lkj
ANS: T PTS: 1 lkjl k j lkjlkjl k j DIF: Easy OBJ: LO: 1-1 lkjlkjl k j lkj
NAT: BUSPROG: Reflective thinkinglkjl k j l kj lkj
STA: DISC: Financial Markets and Interest Rates
lkjl k j lkj lkj lkj lkj lkj l k j
KEY: Bloom's: Knowledge lkjl k j lkj
3. A good financial plan completed whenone is in their 30s will typicallylast a lifetime. ANS:
lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj l k j lkjl k
F
j PTS: 1 lkjlkjl k j DIF: Challenging OBJ: LO: 1-2 lkjlkjl k j lkj
NAT: BUSPROG: Reflective thinkinglkjl k j l kj lkj
STA: DISC: Financial Markets and Interest Rates
lkjl k j lkj lkj lkj lkj lkj l k j
KEY: Bloom's: Synthesis lkjl k j lkj
4. Financial planningis a continuing, life-long process. lkj lkj lkj lkj lkj lkj
ANS: T PTS: 1 lkjl k j lkjlkjl k j DIF: Easy OBJ: LO: 1-2 lkjlkjl k j lkj
NAT: BUSPROG: Reflective thinkinglkjl k j l kj lkj
STA: DISC: Financial Markets and Interest Rates
lkjl k j lkj lkj lkj lkj lkj l k j
KEY: Bloom's: Comprehension lkjl k j lkj
5. Financial planningcanimprove your standard of living. lkj lkj lkj lkj lkj lkj lkj
ANS: T PTS: 1 lkjl k j lkjlkjl k j DIF: Easy OBJ: LO: 1-1 lkjlkjl k j lkj
NAT: BUSPROG: Reflective thinkinglkjl k j l kj lkj
STA: DISC: Financial Markets and Interest Rates
lkjl k j lkj lkj lkj lkj lkj l k j
KEY: Bloom's: Comprehension lkjl k j lkj
6. Current consumptionisinverselyrelated to savingfor the future. lkj lkj lkj lkj lkj lkj lkj lkj lkj
ANS: T PTS: 1 lkjl k j lkjlkjl k j DIF: Challenging OBJ: LO: 1-1 lkjlkjl k j lkj
NAT: BUSPROG: Reflective thinkinglkjl k j l kj lkj
STA: DISC: Financial Markets and Interest Rates
lkjl k j lkj lkj lkj lkj lkj l k j
KEY: Bloom's: Analysis lkjl k j lkj
7. About 20% of Americans say retirement planningis their most pressing financial concern.
lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj
, ANS: F PTS: 1 lkjl k j lkjlkjl k j DIF: Moderate OBJ: LO: 1-1 lkjlkjl k j lkj
NAT: BUSPROG: Reflective thinking lkjl k j l kj lkj
STA: DISC: Financial Markets and Interest Rates
lkjl k j lkj lkj lkj lkj lkj l k j
KEY: Bloom's: Knowledge lkjl k j lkj
8. The most effective wayto achieve financial objectives is through financial planning. AN
lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj l k j
S: T lkjlPTS: 1
k j lkjlkjl k j DIF: Moderate OBJ: LO: 1-1 lkjlkjl k j lkj
NAT: BUSPROG: Reflective thinking lkjl k j l kj lkj
STA: DISC: Financial Markets and Interest Rates
lkjl k j lkj lkj lkj lkj lkj l k j
KEY: Bloom's: Comprehension lkjl k j lkj
9. Definingfinancial goals is an important first step in personal financial planning process. AN
lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj l k j
S: T lkjl PTS: 1
k j lkjlkjl k j DIF: Easy OBJ: LO: 1-2 lkjlkjl k j lkj
NAT: BUSPROG: Reflective thinking lkjl k j l kj lkj STA: DISC: Financial Markets and Interest Rates
lkjl k j lkj lkj lkj lkj lkj
KEY: Bloom's: Comprehension lkjl k j lkj
10. Two persons with equal average propensities toconsume will not necessarily have equal standards of livin
lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj l k j
g because of differences inincome.
lkj lkj lkj lkj lkj
ANS: T PTS: 1 lkjl k j lkjlkjl k j DIF: Challenging OBJ: LO: 1-1 lkjlkjl k j lkj
NAT: BUSPROG: Reflective thinking lkjl k j l kj lkj
STA: DISC: Financial Markets and Interest Rates
lkjl k j lkj lkj lkj lkj lkj l k j
KEY: Bloom's: Evaluation lkjl k j lkj
11. The need for financial planning declines as your income increases.
lkj lkj lkj lkj lkj lkj lkj lkj lkj
ANS: F PTS: 1 lkjl k j lkjlkjl k j DIF: Moderate OBJ: LO: 1-1 lkjlkjl k j lkj
NAT: BUSPROG: Reflective thinking lkjl k j l kj lkj
STA: DISC: Financial Markets and Interest Rates
lkjl k j lkj lkj lkj lkj lkj l k j
KEY: Bloom's: Synthesis lkjl k j lkj
12. Current consumptioneffects future consumption. lkj lkj lkj lkj
ANS: T PTS: 1 lkjl k j lkjlkjl k j DIF: Challenging OBJ: LO: 1-1 lkjlkjl k j lkj
NAT: BUSPROG: Reflective thinking lkjl k j l kj lkj
STA: DISC: Financial Markets and Interest Rates
lkjl k j lkj lkj lkj lkj lkj l k j
KEY: Bloom's: Analysis lkjl k j lkj
13. A person who has $2,000 monthlyincome andspends $1,800 monthly has anaverage propensity to cons
lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj l k j
ume of 90%. lkj lkj
ANS: T PTS: 1 lkjl k j lkjlkjl k j DIF: Challenging OBJ: LO: 1-1 lkjlkjl k j lkj
NAT: BUSPROG: Reflective thinking lkjl k j l kj lkj
STA: DISC: Financial Markets and Interest Rates
lkjl k j lkj lkj lkj lkj lkj l k j
KEY: Bloom's: Evaluation lkjl k j lkj
14. A person making $35,000 and spending$30,800 has an average propensityto consume of 80%. AN
lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj l k j
S: F lkjl PTS: 1
k j lkjlkjl k j DIF: Challenging OBJ: LO: 1-1 lkjlkjl k j lkj
NAT: BUSPROG: Reflective thinking lkjl k j l kj lkj STA: DISC: Financial Markets and Interest Rates
lkjl k j lkj lkj lkj lkj lkj
KEY: Bloom's: Evaluation lkjl k j lkj
15. Most families find it difficultto discuss money matters.
lkj lkj lkj lkj lkj lkj lkj lkj
, ANS: T
lkjl k j PTS: 1
lkjlkjl k j DIF: Easy OBJ: LO: 1-2
lkjlkjl k j lkj
Personal Financial Planning, 13th Edition,
by Gitman, Joehnk, and Billingsley.
All chapters covered.
,Chapter1—UnderstandingtheFinancialPlanningProcess
lkj lkj lkj lkj lkj
TRUE/FALSE
1. Standard of livingis defined as the necessities, comforts, and luxuries desired by an individual or group. ANS:
lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj l k j lkj
lT k j PTS: 1 lkjlkjl k j DIF: Easy OBJ: LO: 1-1 lkjlkjl k j lkj
NAT: BUSPROG: Reflective thinkinglkjl k j l kj lkj STA: DISC: Financial Markets and Interest Rates
lkjl k j lkj lkj lkj lkj lkj
KEY: Bloom's: Knowledge lkjl k j lkj
2. Your average propensity toconsume is the percentage of each dollar of income, on the average,that is spent
lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj l k j lkj
for current needs rather than savings.
lkj lkj lkj lkj lkj
ANS: T PTS: 1 lkjl k j lkjlkjl k j DIF: Easy OBJ: LO: 1-1 lkjlkjl k j lkj
NAT: BUSPROG: Reflective thinkinglkjl k j l kj lkj
STA: DISC: Financial Markets and Interest Rates
lkjl k j lkj lkj lkj lkj lkj l k j
KEY: Bloom's: Knowledge lkjl k j lkj
3. A good financial plan completed whenone is in their 30s will typicallylast a lifetime. ANS:
lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj l k j lkjl k
F
j PTS: 1 lkjlkjl k j DIF: Challenging OBJ: LO: 1-2 lkjlkjl k j lkj
NAT: BUSPROG: Reflective thinkinglkjl k j l kj lkj
STA: DISC: Financial Markets and Interest Rates
lkjl k j lkj lkj lkj lkj lkj l k j
KEY: Bloom's: Synthesis lkjl k j lkj
4. Financial planningis a continuing, life-long process. lkj lkj lkj lkj lkj lkj
ANS: T PTS: 1 lkjl k j lkjlkjl k j DIF: Easy OBJ: LO: 1-2 lkjlkjl k j lkj
NAT: BUSPROG: Reflective thinkinglkjl k j l kj lkj
STA: DISC: Financial Markets and Interest Rates
lkjl k j lkj lkj lkj lkj lkj l k j
KEY: Bloom's: Comprehension lkjl k j lkj
5. Financial planningcanimprove your standard of living. lkj lkj lkj lkj lkj lkj lkj
ANS: T PTS: 1 lkjl k j lkjlkjl k j DIF: Easy OBJ: LO: 1-1 lkjlkjl k j lkj
NAT: BUSPROG: Reflective thinkinglkjl k j l kj lkj
STA: DISC: Financial Markets and Interest Rates
lkjl k j lkj lkj lkj lkj lkj l k j
KEY: Bloom's: Comprehension lkjl k j lkj
6. Current consumptionisinverselyrelated to savingfor the future. lkj lkj lkj lkj lkj lkj lkj lkj lkj
ANS: T PTS: 1 lkjl k j lkjlkjl k j DIF: Challenging OBJ: LO: 1-1 lkjlkjl k j lkj
NAT: BUSPROG: Reflective thinkinglkjl k j l kj lkj
STA: DISC: Financial Markets and Interest Rates
lkjl k j lkj lkj lkj lkj lkj l k j
KEY: Bloom's: Analysis lkjl k j lkj
7. About 20% of Americans say retirement planningis their most pressing financial concern.
lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj
, ANS: F PTS: 1 lkjl k j lkjlkjl k j DIF: Moderate OBJ: LO: 1-1 lkjlkjl k j lkj
NAT: BUSPROG: Reflective thinking lkjl k j l kj lkj
STA: DISC: Financial Markets and Interest Rates
lkjl k j lkj lkj lkj lkj lkj l k j
KEY: Bloom's: Knowledge lkjl k j lkj
8. The most effective wayto achieve financial objectives is through financial planning. AN
lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj l k j
S: T lkjlPTS: 1
k j lkjlkjl k j DIF: Moderate OBJ: LO: 1-1 lkjlkjl k j lkj
NAT: BUSPROG: Reflective thinking lkjl k j l kj lkj
STA: DISC: Financial Markets and Interest Rates
lkjl k j lkj lkj lkj lkj lkj l k j
KEY: Bloom's: Comprehension lkjl k j lkj
9. Definingfinancial goals is an important first step in personal financial planning process. AN
lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj l k j
S: T lkjl PTS: 1
k j lkjlkjl k j DIF: Easy OBJ: LO: 1-2 lkjlkjl k j lkj
NAT: BUSPROG: Reflective thinking lkjl k j l kj lkj STA: DISC: Financial Markets and Interest Rates
lkjl k j lkj lkj lkj lkj lkj
KEY: Bloom's: Comprehension lkjl k j lkj
10. Two persons with equal average propensities toconsume will not necessarily have equal standards of livin
lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj l k j
g because of differences inincome.
lkj lkj lkj lkj lkj
ANS: T PTS: 1 lkjl k j lkjlkjl k j DIF: Challenging OBJ: LO: 1-1 lkjlkjl k j lkj
NAT: BUSPROG: Reflective thinking lkjl k j l kj lkj
STA: DISC: Financial Markets and Interest Rates
lkjl k j lkj lkj lkj lkj lkj l k j
KEY: Bloom's: Evaluation lkjl k j lkj
11. The need for financial planning declines as your income increases.
lkj lkj lkj lkj lkj lkj lkj lkj lkj
ANS: F PTS: 1 lkjl k j lkjlkjl k j DIF: Moderate OBJ: LO: 1-1 lkjlkjl k j lkj
NAT: BUSPROG: Reflective thinking lkjl k j l kj lkj
STA: DISC: Financial Markets and Interest Rates
lkjl k j lkj lkj lkj lkj lkj l k j
KEY: Bloom's: Synthesis lkjl k j lkj
12. Current consumptioneffects future consumption. lkj lkj lkj lkj
ANS: T PTS: 1 lkjl k j lkjlkjl k j DIF: Challenging OBJ: LO: 1-1 lkjlkjl k j lkj
NAT: BUSPROG: Reflective thinking lkjl k j l kj lkj
STA: DISC: Financial Markets and Interest Rates
lkjl k j lkj lkj lkj lkj lkj l k j
KEY: Bloom's: Analysis lkjl k j lkj
13. A person who has $2,000 monthlyincome andspends $1,800 monthly has anaverage propensity to cons
lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj l k j
ume of 90%. lkj lkj
ANS: T PTS: 1 lkjl k j lkjlkjl k j DIF: Challenging OBJ: LO: 1-1 lkjlkjl k j lkj
NAT: BUSPROG: Reflective thinking lkjl k j l kj lkj
STA: DISC: Financial Markets and Interest Rates
lkjl k j lkj lkj lkj lkj lkj l k j
KEY: Bloom's: Evaluation lkjl k j lkj
14. A person making $35,000 and spending$30,800 has an average propensityto consume of 80%. AN
lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj lkj l k j
S: F lkjl PTS: 1
k j lkjlkjl k j DIF: Challenging OBJ: LO: 1-1 lkjlkjl k j lkj
NAT: BUSPROG: Reflective thinking lkjl k j l kj lkj STA: DISC: Financial Markets and Interest Rates
lkjl k j lkj lkj lkj lkj lkj
KEY: Bloom's: Evaluation lkjl k j lkj
15. Most families find it difficultto discuss money matters.
lkj lkj lkj lkj lkj lkj lkj lkj
, ANS: T
lkjl k j PTS: 1
lkjlkjl k j DIF: Easy OBJ: LO: 1-2
lkjlkjl k j lkj
