Name: Class: Date:
Copyright Cengage Learning. Powered
jj jj j j Page 1
jj
by
,Name: Class: Date:
TEST BANK FOR j j j j
PFIN 8th Edition by Randall Billingsley, Lawrence Gitman, Michael Joehnk
jj jj jj jj jj jj jj jj jj
Chapter 1-15 jj Answers are at the end of Each Chapter pp pp jpp pp jpp pp pp
chapter 1 j j
Indicate whether the statement is true or false.
j j j j j j j j j j j j j j
1. Saving $400 for a large, flat-screen TV within the next four months is an example of a short-term goal.
jj j j j j j j jj jj j j j j j j jj j j jj jj j j j j j j jj jj
a. True
b. False
2. Commission-based financial planners charge fees based on the complexity of the plan they prepare.
jj j j jj j j j j jj jj jj jj jj j j j j jj
a. True
b. False
3. In the United States, salaries tend to be higher in the Northeast and West than in the South.
jj j j j j j j j j j j j j j j jj j j jj j j jj j j jj jj j j
a. True
b. False
4. Setting long- and short-term career goals helps in career planning.
jj jj j j jj j j jj jj j j j j
a. True
b. False
5. Financial planning takes place in a dynamic economic environment created by the actions of the
j j jj jj j j jj j j j j j j j j j j jj j j j j j j
j jgovernment, business, and consumers. jj j j j j
a. True
b. False
6. You should discuss your financial goals and attitudes toward money with your partner.
jj jj jj jj j j jj jj jj j j jj jj jj
a. True
b. False
7. Accumulating wealth for later years is called estate planning.
jj jj jj j j jj j j jj jj
a. True
b. False
8. It is easy to change your partner’s financial style, so there is no need for financial
j j j j jj jj j j j j jj j j j j jj j j j j j j jj jj
j jplanning to resolve conflicts regarding money matters.
jj j j jj j j j j j j
a. True
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by
,Name: Class: Date:
b. False
9. Tax plans are closely tied to investment plans.
j j jj j j jj j j jj j j
a. True
b. False
10. Recessions and financial crises will always result in job loss.
jj j j j j j j jj jj jj jj jj
a. True
b. False
11. The longer you wait to begin retirement planning, the less you are likely to have in your retirement fun
jj j j j j j j jj jj j j j j j j j j j j j j jj j j j j j j jj j j
a. True
b. False
12. Career plans should not be changed after long- and short-term career goals are set.
j j j j jj jj j j j j jj jj j j jj j j j j jj
a. True
b. False
13. You should limit your spending to no more than 20 percent more than what you earn.
jj jj j j jj jj jj j j j j j j jj j j jj j j j j j j
a. True
b. False
14. Morgan has an annual income of $45,000 and spends $30,000 for current needs.
j j jj j j jj j j j j jj jj j j j j j j jj
Morgan’s average propensity to consume is 80 percent.
j j j j jj jj j j j j j j j j
a. True
b. False
15. The most effective way to achieve financial objectives is through personal financial planning.
jj j j jj jj jj jj jj jj jj jj jj j j
a. True
b. False
16. Tangible (physical) assets are earning assets that are held for the returns they promise.
jj jj j j jj jj j j jj j j jj jj jj j j j j
a. True
b. False
17. Two people with significantly different incomes can have equal average propensities to
jj j j jj jj j j j j j j j j j j j j j j
jjconsume because of differences in their standard of living.
jj j j j j j j j j j j j j j j
a. True
b. False
18. The need for financial planning declines as your income increases.
jj jj jj j j jj j j jj jj j j
a. True
b. False
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, Name: Class: Date:
19. Retirement planning includes taking advantage of and managing employer-sponsored benefits.
jj jj jj jj jj jj jj jj jj
a. True
b. False
20. Geographic factors affect your earning power.
jj jj j j jj jj
a. True
b. False
21. Fee-only financial planners earn commissions for the products they sell.
jj j j jj jj jj jj jj j j jj
a. True
b. False
22. Marital status affects the income level of individuals.
j j jj jj j j jj j j jj
a. True
b. False
23. Your purchase, saving, investment, and retirement plans and decisions are not influenced by the
j j jj j j j j j j j j jj j j jj jj jj j j jj
present state of the economy.
j j j j jj j j j j
a. True
b. False
24. For employees of large firms, managing employee benefits is an important part of financial planning.
jj j j jj jj j j jj j j j j jj jj j j j j jj j j
a. True
b. False
25. Short-term planning should include creating and maintaining an emergency fund with at least
jj jj jj j j jj j j jj j j jj j j jj j j
six months’ worth of income.
j j j j jj j j j j
a. True
b. False
26. The federal government delegates its regulation of economic activity function to businesses and consumers.
jj j j j j jj jj j j jj jj jj jj jj j j jj
a. True
b. False
27. The support of philanthropic organizations is a material item that contributes to our quality of life.
jj j j j j jj j j j j jj jj jj j j jj j j j j jj jj
a. True
b. False
28. The average propensity to consume is commonly viewed as a key determinant of standard of living.
jj j j jj j j j j j j j j j j jj j j jj jj j j j j j j
a. True
b. False
Copyright Cengage Learning. Powered
jj jj j j Page 4
jj
by
Copyright Cengage Learning. Powered
jj jj j j Page 1
jj
by
,Name: Class: Date:
TEST BANK FOR j j j j
PFIN 8th Edition by Randall Billingsley, Lawrence Gitman, Michael Joehnk
jj jj jj jj jj jj jj jj jj
Chapter 1-15 jj Answers are at the end of Each Chapter pp pp jpp pp jpp pp pp
chapter 1 j j
Indicate whether the statement is true or false.
j j j j j j j j j j j j j j
1. Saving $400 for a large, flat-screen TV within the next four months is an example of a short-term goal.
jj j j j j j j jj jj j j j j j j jj j j jj jj j j j j j j jj jj
a. True
b. False
2. Commission-based financial planners charge fees based on the complexity of the plan they prepare.
jj j j jj j j j j jj jj jj jj jj j j j j jj
a. True
b. False
3. In the United States, salaries tend to be higher in the Northeast and West than in the South.
jj j j j j j j j j j j j j j j jj j j jj j j jj j j jj jj j j
a. True
b. False
4. Setting long- and short-term career goals helps in career planning.
jj jj j j jj j j jj jj j j j j
a. True
b. False
5. Financial planning takes place in a dynamic economic environment created by the actions of the
j j jj jj j j jj j j j j j j j j j j jj j j j j j j
j jgovernment, business, and consumers. jj j j j j
a. True
b. False
6. You should discuss your financial goals and attitudes toward money with your partner.
jj jj jj jj j j jj jj jj j j jj jj jj
a. True
b. False
7. Accumulating wealth for later years is called estate planning.
jj jj jj j j jj j j jj jj
a. True
b. False
8. It is easy to change your partner’s financial style, so there is no need for financial
j j j j jj jj j j j j jj j j j j jj j j j j j j jj jj
j jplanning to resolve conflicts regarding money matters.
jj j j jj j j j j j j
a. True
Copyright Cengage Learning. Poweredjj jj j j Page 2
jj
by
,Name: Class: Date:
b. False
9. Tax plans are closely tied to investment plans.
j j jj j j jj j j jj j j
a. True
b. False
10. Recessions and financial crises will always result in job loss.
jj j j j j j j jj jj jj jj jj
a. True
b. False
11. The longer you wait to begin retirement planning, the less you are likely to have in your retirement fun
jj j j j j j j jj jj j j j j j j j j j j j j jj j j j j j j jj j j
a. True
b. False
12. Career plans should not be changed after long- and short-term career goals are set.
j j j j jj jj j j j j jj jj j j jj j j j j jj
a. True
b. False
13. You should limit your spending to no more than 20 percent more than what you earn.
jj jj j j jj jj jj j j j j j j jj j j jj j j j j j j
a. True
b. False
14. Morgan has an annual income of $45,000 and spends $30,000 for current needs.
j j jj j j jj j j j j jj jj j j j j j j jj
Morgan’s average propensity to consume is 80 percent.
j j j j jj jj j j j j j j j j
a. True
b. False
15. The most effective way to achieve financial objectives is through personal financial planning.
jj j j jj jj jj jj jj jj jj jj jj j j
a. True
b. False
16. Tangible (physical) assets are earning assets that are held for the returns they promise.
jj jj j j jj jj j j jj j j jj jj jj j j j j
a. True
b. False
17. Two people with significantly different incomes can have equal average propensities to
jj j j jj jj j j j j j j j j j j j j j j
jjconsume because of differences in their standard of living.
jj j j j j j j j j j j j j j j
a. True
b. False
18. The need for financial planning declines as your income increases.
jj jj jj j j jj j j jj jj j j
a. True
b. False
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jj jj j j Page 3
jj
by
, Name: Class: Date:
19. Retirement planning includes taking advantage of and managing employer-sponsored benefits.
jj jj jj jj jj jj jj jj jj
a. True
b. False
20. Geographic factors affect your earning power.
jj jj j j jj jj
a. True
b. False
21. Fee-only financial planners earn commissions for the products they sell.
jj j j jj jj jj jj jj j j jj
a. True
b. False
22. Marital status affects the income level of individuals.
j j jj jj j j jj j j jj
a. True
b. False
23. Your purchase, saving, investment, and retirement plans and decisions are not influenced by the
j j jj j j j j j j j j jj j j jj jj jj j j jj
present state of the economy.
j j j j jj j j j j
a. True
b. False
24. For employees of large firms, managing employee benefits is an important part of financial planning.
jj j j jj jj j j jj j j j j jj jj j j j j jj j j
a. True
b. False
25. Short-term planning should include creating and maintaining an emergency fund with at least
jj jj jj j j jj j j jj j j jj j j jj j j
six months’ worth of income.
j j j j jj j j j j
a. True
b. False
26. The federal government delegates its regulation of economic activity function to businesses and consumers.
jj j j j j jj jj j j jj jj jj jj jj j j jj
a. True
b. False
27. The support of philanthropic organizations is a material item that contributes to our quality of life.
jj j j j j jj j j j j jj jj jj j j jj j j j j jj jj
a. True
b. False
28. The average propensity to consume is commonly viewed as a key determinant of standard of living.
jj j j jj j j j j j j j j j j jj j j jj jj j j j j j j
a. True
b. False
Copyright Cengage Learning. Powered
jj jj j j Page 4
jj
by
