TEST BANK
Personal Financial Planning 16th Edition
By Randy Billingsley, Lawrence Gitman
LU
XE
LI
BR
AR
Y
, TABLE OF CONTENT
Part 1. Foundations of Financial Planning
Chapter 1. Understanding the Financial Planning Process
Chapter 2. Using Financial Statements and Budgets
Chapter 3. Preparing Your Taxes
Part 2. Managing Basic Assets
Chapter 4. Managing Your Cash and Savings
Chapter 5. Making Automobile and Housing Decisions
LU
Part 3. Managing Credit
Chapter 6. Using Credit
Chapter 7. Using Consumer Loans
Part 4. Managing Insurance Needs
XE
Chapter 8. Insuring Your Life
Chapter 9. Insuring Your Health
Chapter 10. Protecting Your Property
Part 5. Managing Investments
LI
Chapter 11. Investment Planning
Chapter 12. Investing in Stocks and Bonds
BR
Chapter 13. Investing in Mutual Funds, ETFs, and Real Estate
Part 6. Retirement and Estate Planning
Chapter 14. Planning for Retirement
Chapter 15. Preserving Your Estate
AR
Y
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Test Bank for Personal Financial Planning, 16th Edition,
by J. Gitman, Michael D. Joehnk, and R Billingsley.
Chapter 1—Understanding the Financial Planning Process
TRUE/FALSE
LU
1. Standard of living is defined as the necessities, comforts, and luxuries desired by an individual or group.
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-1
NAT: BUSPROG: Reflective thinking STA: DISC: Financial Markets and Interest Rates
KEY: Bloom's: Knowledge
XE
2. Your average propensity to consume is the percentage of each dollar of income, on the average, that is
spent for current needs rather than savings.
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-1
NAT: BUSPROG: Reflective thinking STA: DISC: Financial Markets and Interest Rates
KEY: Bloom's: Knowledge
LI
3. A good financial plan completed when one is in their 30s will typically last a lifetime.
ANS: F PTS: 1 DIF: Challenging OBJ: LO: 1-2
BR
NAT: BUSPROG: Reflective thinking STA: DISC: Financial Markets and Interest Rates
KEY: Bloom's: Synthesis
4. Financial planning is a continuing, life-long process.
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-2
NAT: BUSPROG: Reflective thinking STA: DISC: Financial Markets and Interest Rates
AR
KEY: Bloom's: Comprehension
5. Financial planning can improve your standard of living.
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-1
NAT: BUSPROG: Reflective thinking STA: DISC: Financial Markets and Interest Rates
KEY: Bloom's: Comprehension
Y
6. Current consumption is inversely related to saving for the future.
ANS: T PTS: 1 DIF: Challenging OBJ: LO: 1-1
NAT: BUSPROG: Reflective thinking STA: DISC: Financial Markets and Interest Rates
KEY: Bloom's: Analysis
7. About 20% of Americans say retirement planning is their most pressing financial concern.
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ANS: F PTS: 1 DIF: Moderate OBJ: LO: 1-1
NAT: BUSPROG: Reflective thinking STA: DISC: Financial Markets and Interest Rates
KEY: Bloom's: Knowledge
8. The most effective way to achieve financial objectives is through financial planning.
ANS: T PTS: 1 DIF: Moderate OBJ: LO: 1-1
NAT: BUSPROG: Reflective thinking STA: DISC: Financial Markets and Interest Rates
KEY: Bloom's: Comprehension
9. Defining financial goals is an important first step in personal financial planning process.
LU
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-2
NAT: BUSPROG: Reflective thinking STA: DISC: Financial Markets and Interest Rates
KEY: Bloom's: Comprehension
10. Two persons with equal average propensities to consume will not necessarily have equal standards of
XE
living because of differences in income.
ANS: T PTS: 1 DIF: Challenging OBJ: LO: 1-1
NAT: BUSPROG: Reflective thinking STA: DISC: Financial Markets and Interest Rates
KEY: Bloom's: Evaluation
11. The need for financial planning declines as your income increases.
LI
ANS: F PTS: 1 DIF: Moderate OBJ: LO: 1-1
NAT: BUSPROG: Reflective thinking STA: DISC: Financial Markets and Interest Rates
KEY: Bloom's: Synthesis
BR
12. Current consumption effects future consumption.
ANS: T PTS: 1 DIF: Challenging OBJ: LO: 1-1
NAT: BUSPROG: Reflective thinking STA: DISC: Financial Markets and Interest Rates
KEY: Bloom's: Analysis
AR
13. A person who has $2,000 monthly income and spends $1,800 monthly has an average propensity to
consume of 90%.
ANS: T PTS: 1 DIF: Challenging OBJ: LO: 1-1
NAT: BUSPROG: Reflective thinking STA: DISC: Financial Markets and Interest Rates
KEY: Bloom's: Evaluation
Y
14. A person making $35,000 and spending $30,800 has an average propensity to consume of 80%.
ANS: F PTS: 1 DIF: Challenging OBJ: LO: 1-1
NAT: BUSPROG: Reflective thinking STA: DISC: Financial Markets and Interest Rates
KEY: Bloom's: Evaluation
15. Most families find it difficult to discuss money matters.
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-2
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Personal Financial Planning 16th Edition
By Randy Billingsley, Lawrence Gitman
LU
XE
LI
BR
AR
Y
, TABLE OF CONTENT
Part 1. Foundations of Financial Planning
Chapter 1. Understanding the Financial Planning Process
Chapter 2. Using Financial Statements and Budgets
Chapter 3. Preparing Your Taxes
Part 2. Managing Basic Assets
Chapter 4. Managing Your Cash and Savings
Chapter 5. Making Automobile and Housing Decisions
LU
Part 3. Managing Credit
Chapter 6. Using Credit
Chapter 7. Using Consumer Loans
Part 4. Managing Insurance Needs
XE
Chapter 8. Insuring Your Life
Chapter 9. Insuring Your Health
Chapter 10. Protecting Your Property
Part 5. Managing Investments
LI
Chapter 11. Investment Planning
Chapter 12. Investing in Stocks and Bonds
BR
Chapter 13. Investing in Mutual Funds, ETFs, and Real Estate
Part 6. Retirement and Estate Planning
Chapter 14. Planning for Retirement
Chapter 15. Preserving Your Estate
AR
Y
, kjhgfdsa
Test Bank for Personal Financial Planning, 16th Edition,
by J. Gitman, Michael D. Joehnk, and R Billingsley.
Chapter 1—Understanding the Financial Planning Process
TRUE/FALSE
LU
1. Standard of living is defined as the necessities, comforts, and luxuries desired by an individual or group.
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-1
NAT: BUSPROG: Reflective thinking STA: DISC: Financial Markets and Interest Rates
KEY: Bloom's: Knowledge
XE
2. Your average propensity to consume is the percentage of each dollar of income, on the average, that is
spent for current needs rather than savings.
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-1
NAT: BUSPROG: Reflective thinking STA: DISC: Financial Markets and Interest Rates
KEY: Bloom's: Knowledge
LI
3. A good financial plan completed when one is in their 30s will typically last a lifetime.
ANS: F PTS: 1 DIF: Challenging OBJ: LO: 1-2
BR
NAT: BUSPROG: Reflective thinking STA: DISC: Financial Markets and Interest Rates
KEY: Bloom's: Synthesis
4. Financial planning is a continuing, life-long process.
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-2
NAT: BUSPROG: Reflective thinking STA: DISC: Financial Markets and Interest Rates
AR
KEY: Bloom's: Comprehension
5. Financial planning can improve your standard of living.
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-1
NAT: BUSPROG: Reflective thinking STA: DISC: Financial Markets and Interest Rates
KEY: Bloom's: Comprehension
Y
6. Current consumption is inversely related to saving for the future.
ANS: T PTS: 1 DIF: Challenging OBJ: LO: 1-1
NAT: BUSPROG: Reflective thinking STA: DISC: Financial Markets and Interest Rates
KEY: Bloom's: Analysis
7. About 20% of Americans say retirement planning is their most pressing financial concern.
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ANS: F PTS: 1 DIF: Moderate OBJ: LO: 1-1
NAT: BUSPROG: Reflective thinking STA: DISC: Financial Markets and Interest Rates
KEY: Bloom's: Knowledge
8. The most effective way to achieve financial objectives is through financial planning.
ANS: T PTS: 1 DIF: Moderate OBJ: LO: 1-1
NAT: BUSPROG: Reflective thinking STA: DISC: Financial Markets and Interest Rates
KEY: Bloom's: Comprehension
9. Defining financial goals is an important first step in personal financial planning process.
LU
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-2
NAT: BUSPROG: Reflective thinking STA: DISC: Financial Markets and Interest Rates
KEY: Bloom's: Comprehension
10. Two persons with equal average propensities to consume will not necessarily have equal standards of
XE
living because of differences in income.
ANS: T PTS: 1 DIF: Challenging OBJ: LO: 1-1
NAT: BUSPROG: Reflective thinking STA: DISC: Financial Markets and Interest Rates
KEY: Bloom's: Evaluation
11. The need for financial planning declines as your income increases.
LI
ANS: F PTS: 1 DIF: Moderate OBJ: LO: 1-1
NAT: BUSPROG: Reflective thinking STA: DISC: Financial Markets and Interest Rates
KEY: Bloom's: Synthesis
BR
12. Current consumption effects future consumption.
ANS: T PTS: 1 DIF: Challenging OBJ: LO: 1-1
NAT: BUSPROG: Reflective thinking STA: DISC: Financial Markets and Interest Rates
KEY: Bloom's: Analysis
AR
13. A person who has $2,000 monthly income and spends $1,800 monthly has an average propensity to
consume of 90%.
ANS: T PTS: 1 DIF: Challenging OBJ: LO: 1-1
NAT: BUSPROG: Reflective thinking STA: DISC: Financial Markets and Interest Rates
KEY: Bloom's: Evaluation
Y
14. A person making $35,000 and spending $30,800 has an average propensity to consume of 80%.
ANS: F PTS: 1 DIF: Challenging OBJ: LO: 1-1
NAT: BUSPROG: Reflective thinking STA: DISC: Financial Markets and Interest Rates
KEY: Bloom's: Evaluation
15. Most families find it difficult to discuss money matters.
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-2
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