TEST BANK FOR PFIN 8th Edition by Randall Billingsley, Lawrence Gitman, Michael Joehnk

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TEST BANK FOR
PFIN 8th Edition by Randall Billingsley, Lawrence Gitman, Michael Joehnk
Chapter 1-15 Answers are at the end of Each Chapter


chapter 1

Indicate whether the statement is true or false.

1. Saving $400 for a large, flat-screen TV within the next four months is an example of a short-term goal.
a. True
b. False

2. Commission-based financial planners charge fees based on the complexity of the plan they prepare.
a. True
b. False

3. In the United States, salaries tend to be higher in the Northeast and West than in the South.
a. True
b. False

4. Setting long- and short-term career goals helps in career planning.
a. True
b. False

5. Financial planning takes place in a dynamic economic environment created by the actions of the government, business,
and consumers.
a. True
b. False

6. You should discuss your financial goals and attitudes toward money with your partner.
a. True
b. False

7. Accumulating wealth for later years is called estate planning.
a. True
b. False

8. It is easy to change your partner’s financial style, so there is no need for financial planning to resolve conflicts
regarding money matters.
a. True

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b. False

9. Tax plans are closely tied to investment plans.
a. True
b. False

10. Recessions and financial crises will always result in job loss.
a. True
b. False

11. The longer you wait to begin retirement planning, the less you are likely to have in your retirement fund.
a. True
b. False

12. Career plans should not be changed after long- and short-term career goals are set.
a. True
b. False

13. You should limit your spending to no more than 20 percent more than what you earn.
a. True
b. False

14. Morgan has an annual income of $45,000 and spends $30,000 for current needs. Morgan’s average propensity to
consume is 80 percent.
a. True
b. False

15. The most effective way to achieve financial objectives is through personal financial planning.
a. True
b. False

16. Tangible (physical) assets are earning assets that are held for the returns they promise.
a. True
b. False

17. Two people with significantly different incomes can have equal average propensities to consume because of
differences in their standard of living.
a. True
b. False

18. The need for financial planning declines as your income increases.
a. True
b. False

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19. Retirement planning includes taking advantage of and managing employer-sponsored benefits.
a. True
b. False

20. Geographic factors affect your earning power.
a. True
b. False

21. Fee-only financial planners earn commissions for the products they sell.
a. True
b. False

22. Marital status affects the income level of individuals.
a. True
b. False

23. Your purchase, saving, investment, and retirement plans and decisions are not influenced by the present state of the
economy.
a. True
b. False

24. For employees of large firms, managing employee benefits is an important part of financial planning.
a. True
b. False

25. Short-term planning should include creating and maintaining an emergency fund with at least six months’ worth of
income.
a. True
b. False

26. The federal government delegates its regulation of economic activity function to businesses and consumers.
a. True
b. False

27. The support of philanthropic organizations is a material item that contributes to our quality of life.
a. True
b. False

28. The average propensity to consume is commonly viewed as a key determinant of standard of living.
a. True
b. False


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29. Financial planning can improve your standard of living.
a. True
b. False

30. Whenq1youq1getq1yourq1firstq1job,q1youq1shouldq1makeq1aq1goodq1financialq1planq1thatq1youq1canq1followq1withoutq1
makingq1changesq1untilq1youq1retire.
a. True
b. False

31. Livingq1costsq1areq1constantq1throughoutq1theq1country.
a. True
b. False

32. Standardq1ofq1livingq1isq1definedq1asq1theq1necessities,q1comforts,q1andq1luxuriesq1desiredq1byq1anq1individualq1orq1aq1fami
ly.
a. True
b. False

33. Theq1decisionsq1youq1makeq1inq1careerq1planningq1areq1independentq1ofq1theq1decisionsq1youq1makeq1inq1financialq1planni
ng.
a. True
b. False

34. Mostq1peopleq1tendq1toq1beq1moreq1liberalq1aboutq1theirq1expendituresq1duringq1aq1recessionq1orq1crisis.
a. True
b. False

Indicateq1theq1answerq1choiceq1thatq1bestq1completesq1theq1statementq1orq1answersq1theq1question.

35. Taxq1planningq1isq1mostq1commonq1amongq1individualsq1with:
a. lowq1incomes.
b. highq1incomes.
c. noq1incomes.
d. erraticq1incomes.
e. decreasingq1incomes
.

36. Whichq1ofq1theq1followingq1wouldq1NOTq1beq1consideredq1anq1asset?
a. Savingsq1account
b. Land
c. Creditq1cardq1balanc
e
d. Jewelry
e. Moneyq1marketq1fun

Copyrightq1Cengageq1Learning.q1Poweredq1byq1Cog Pageq14
nero.