Personal Financial Planning: Introduction
UPDATED ACTUAL Questions and
CORRECT Answers
Personal Financial planning - CORRECT ANSWER - Is the process of managing your
money to achieve personal economic satisfaction.
Advantages of personal financing - CORRECT ANSWER - -Increased effectiveness in
obtaining, using, and protecting your financial resources through out your lifetime
- Increased control of your financial affairs by avoiding debt, bankruptcy and dependence on
others for economic security
- Improved personal relationships
- a sense of freedom from financial worries
Steps to Financial planning Process - CORRECT ANSWER - 1. Develop financial goals
2. Determine your current financial situations
3. Identify alternative courses of action
4.Evaluate Alternatives
5.Create and implement a financial action plan.
6. Re-evaluate and revise your plan.
Step1: Develop financial goals - CORRECT ANSWER - - Analyze your financial values
and attitudes towards money
- What is your financial decision making process?
Step2: Determine your current financial situation - CORRECT ANSWER - Prepare a list
of current asset and debt balances and amounts spent for various items
, Step3: Identify alternative courses of action - CORRECT ANSWER - Continue as you are,
expand or change the current situation, or take a new course of action
Step4: Evaluate Alternatives - CORRECT ANSWER - Take into consideration your life
situation, personal values and current economic situation
●Opportunity cost is what you give up by making a choice
●The cost, referred to as the trade-off of a decision, can be measured in money or time, or both
●Consider lost opportunities that will result from your decisions.
●Evaluate the risks faced
Step5: Create and Implement a financial action plan - CORRECT ANSWER - Choose
ways to achieve your goals
●May require assistance from others
●Financial Planning Information Sources:
● Printed materials
● Financial institutions
● School courses and Educational Seminars
● Computer software, Internet, and online
information sources
● Financial specialists
Step6: Re-evaluate and revise your plan - CORRECT ANSWER - Your plan should be
reviewed regularly based on your life circumstances
4.When evaluating alternatives: - CORRECT ANSWER - Evaluate your Economic,
product and personal risks.
Evaluate your Economic or product risks: - CORRECT ANSWER - Interest Rate Risk
●Changing interest rates affect your costs when you borrow and your benefits when you invest
UPDATED ACTUAL Questions and
CORRECT Answers
Personal Financial planning - CORRECT ANSWER - Is the process of managing your
money to achieve personal economic satisfaction.
Advantages of personal financing - CORRECT ANSWER - -Increased effectiveness in
obtaining, using, and protecting your financial resources through out your lifetime
- Increased control of your financial affairs by avoiding debt, bankruptcy and dependence on
others for economic security
- Improved personal relationships
- a sense of freedom from financial worries
Steps to Financial planning Process - CORRECT ANSWER - 1. Develop financial goals
2. Determine your current financial situations
3. Identify alternative courses of action
4.Evaluate Alternatives
5.Create and implement a financial action plan.
6. Re-evaluate and revise your plan.
Step1: Develop financial goals - CORRECT ANSWER - - Analyze your financial values
and attitudes towards money
- What is your financial decision making process?
Step2: Determine your current financial situation - CORRECT ANSWER - Prepare a list
of current asset and debt balances and amounts spent for various items
, Step3: Identify alternative courses of action - CORRECT ANSWER - Continue as you are,
expand or change the current situation, or take a new course of action
Step4: Evaluate Alternatives - CORRECT ANSWER - Take into consideration your life
situation, personal values and current economic situation
●Opportunity cost is what you give up by making a choice
●The cost, referred to as the trade-off of a decision, can be measured in money or time, or both
●Consider lost opportunities that will result from your decisions.
●Evaluate the risks faced
Step5: Create and Implement a financial action plan - CORRECT ANSWER - Choose
ways to achieve your goals
●May require assistance from others
●Financial Planning Information Sources:
● Printed materials
● Financial institutions
● School courses and Educational Seminars
● Computer software, Internet, and online
information sources
● Financial specialists
Step6: Re-evaluate and revise your plan - CORRECT ANSWER - Your plan should be
reviewed regularly based on your life circumstances
4.When evaluating alternatives: - CORRECT ANSWER - Evaluate your Economic,
product and personal risks.
Evaluate your Economic or product risks: - CORRECT ANSWER - Interest Rate Risk
●Changing interest rates affect your costs when you borrow and your benefits when you invest
