TEST BANK FOR k p k p
Personal Finance, 2nd Edition Vickie L. Bajtelsmit
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Chapter 1-14kp
Chapter1 kp
To accompany Personal Finance, 2nd edition, byVickie Bajtelsmit
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Summary: 47 questions. 46 Multiple Choice | 1 Multiple Select
k p kp k p k p kp kp kp kp kp kp
LO 1.1 kp 8 17%
LO 1.2 kp 14 30%
LO 1.3 kp 5 11%
LO 1.4 kp 8 17%
LO 1.5 kp 12 26%
47
Easy 6 13%
Medium 40 85%
Hard 1 2%
47
Knowledge 6 13%
Comprehensive 18 38%
Application 17 36%
Analysis 6 13%
47
Calculations
Percentage Change Calculation
kp kp #14
Percentage Change Calculation (withdistractor)
kp kp kp kp #15
PercentageChange Calculation (multiple yrs.)
kp kp kp kp #16
Annual Percentage Change Calculation
kp kp kp #17
, Fee Calculation kp #34
Opportunity Cost Calculation kp kp #40
1. Personal finance is a specialized area of study that focuses kp kp kp kp kp kp kp kp kp
A) exclusively on investments and retirement planning. kp kp kp kp kp
B) on financial management, household budgets, and investments.
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C) exclusively on investment management and household budgets. kp kp kp kp kp kp
D) on individual and householdfinancial decisions, such as budgeting, saving,
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spending, tax planning, insurance, and investments.
kp kp kp kp kp kp
Answer: D kp
Solution: Personal finance is a specialized area of study that focuses on
kp kp kp kp kp kp kp kp kp kp kp
individual and household financial decisions, such as budgeting, saving,
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spending, tax-planning, insurance, and investments.
kp kp kp kp kp
Format: Multiple Choice kp kp
Title: Test Bank 1.1 Personal Financial Planning
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Section:WhyStudy Personal Financial Planning?
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Learning Objective: 1.1 Describe the personal financial planning process, and explain
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how the elements of a comprehensive financial plan fit together.
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Difficulty: Easy kp
Bloomcode:Knowledge
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AACSB: Knowledge
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Expected Time to Complete: 1 minute kp kp kp kp kp
2. Critical to the success of building a comprehensive financial plan is that you approach
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its creation in a logical order. The steps to success, in the correct order, are as follows:
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A) Secure basic needs, build and protect wealth, and establish a firm foundation. kp kp kp kp kp kp kp kp kp kp kp
B) Secure basic needs, establish a firm foundation, and build and protect wealth. kp kp kp kp kp kp kp kp kp kp k p
C) Build and protect wealth, establish a firm foundation, and secure basic needs.
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D) Establish a firm foundation, secure basic needs, and build and protect wealth. kp kp kp kp kp kp kp kp kp kp kp
Answer: D kp
Solution: Critical to the success of building a comprehensive financial plan is that you
kp kp kp kp kp kp kp kp kp kp kp kp kp
approach its creation in a logical order. The steps to success are: establish a firm
kp kp kp kp kp kp kp kp kp kp kp kp kp kp kp
foundation, secure basic needs, and build and protect wealth.
kp kp kp kp kp kp kp kp kp
Format: Multiple Choice kp kp
Title: Test Bank 1.1 Steps to a Comprehensive Financial Plan
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Section: Elements of a Comprehensive Financial Plan
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Learning Objective: 1.1 Describe the personal financial planning process, and explain
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how the elements of a comprehensive financial plan fit together.
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Difficulty: Medium kp
Bloomcode:Comprehension
kp kp
AACSB: Comprehension
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Expected Time to Complete: 2 minutes kp kp kp kp kp
3. The financial planning process includes five steps. Four of the steps are listed next:
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, • Analyze your current financial status. kp kp kp kp
• Implement your financial plan. kp kp kp
• Monitor your progress and revise your plan as needed. kp kp kp kp kp kp kp kp
• Organize your financial information and set short-term and long-term goals. kp kp kp kp kp kp kp kp kp
What is the missing step? kp kp kp kp
A) Identify and evaluate alternative strategies for meeting your goals. kp kp kp kp kp kp kp kp
B) Understand the personal financial planning process. kp kp kp kp kp
C) Acquire the necessary decision-making skills and tools. kp kp kp kp kp kp
D) Build wealth and protection against emergencies. kp kp kp kp kp
Answer: A kp
Solution: The five steps in the financial planning process are as follows:
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1. Organize your financial information and set short-term and long-term kp kp kp kp kp kp kp kp
goals. kp
2. Analyze your current financial status. kp kp kp kp
3. Identify and evaluate alternative strategies for achieving your goals. kp kp kp kp kp kp kp kp
4. Implement your financial plan. kp kp kp
5. Monitor your progress and revise your plan as needed. kp kp kp kp kp kp kp kp
Format: Multiple Choice kp kp
Title: Test Bank 1.1 The Five Steps in the Financial Planning Process Section:
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The Personal Financial Planning Process
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Learning Objective: 1.1 Describe the personal financial planning process, and explain
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how the elements of a comprehensive financial plan fit together.
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Difficulty: Medium kp
Bloomcode:Comprehension
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AACSB: Comprehension
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Expected Time to Complete: 2 minutes kp kp kp kp kp
4. An effective financial plan must be adaptable to changing circumstances. Which would
kp kp kp kp kp kp kp kp kp kp kp
not be a reason to take you back to Step 1 of the financial planning process?
kp kp kp kp kp kp kp kp kp kp kp kp kp kp kp kp
A) Changes in economic conditions kp kp kp
B) Birth of a child kp kp kp
C) Purchase of life insurance kp kp kp
D) Marriage
Answer: C kp
Solution: Many changes will occur over the course of your life. Not only will changes in
kp kp kp kp kp kp kp kp kp kp kp kp kp kp kp
your personal circumstances (a new job, marriage, and children) affect your financial
kp kp kp kp kp kp kp kp kp kp kp kp
planning objectives and strategies but also may changes in economic conditions
kp kp kp kp kp kp kp kp kp kp kp
necessitate a revision of your comprehensive financial plan. Thus, revising your plan
kp kp kp kp kp kp kp kp kp kp kp kp
takes you continually back to the beginning of the process again. Life insurance is a
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result of changing a financial plan.
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Format:MultipleChoice kp kp
Title: Test Bank 1.1
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Section: The Personal Financial Planning Process kp kp kp kp kp
, Learning Objective: 1.1 Describe the personal financial planning process, and explain
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how the elements of a comprehensive financial plan fit together.
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Difficulty: Medium kp
Bloomcode: Application
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AACSB:ReflectiveThinking
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Expected Time to Complete: 1 minute kp kp kp kp kp
5. Personal financial planning does not include which of the following?
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A) Buyinginsurance kp
B) Deciding which make and model of car to buy kp kp kp kp kp kp kp kp
C) Budgeting
D) Assessingattitude toward risk kp kp kp
Answer: B kp
Solution: Personal financial planning includes budgeting, savings, buying
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insurance, and assessing attitudes toward risk. While determining the cheapest
kp kp kp kp kp kp kp kp kp kp
form of financing and the opportunity cost associated with purchasing a car is part of
kp kp kp kp kp kp kp kp kp kp kp kp kp kp kp
financial planning, the qualitative factors involved in the make and model of a vehicle
kp kp kp kp kp kp kp kp kp kp kp kp kp kp
is not.
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Format: Multiple Choice kp kp
Title: Test Bank 1.1 Personal Financial Planning
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Section:WhyStudy Personal Financial Planning?
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Learning Objective: 1.1 Describe the personal financial planning process, and explain
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how the elements of a comprehensive financial plan fit together.
kp kp kp kp kp kp kp kp kp kp
Difficulty: Medium kp
Bloomcode:Comprehension
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AACSB: Comprehension
kp kp
Expected Time to Complete: 1 minute kp kp kp kp kp
6. Which is not a necessary activity in securing your basic needs?
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A) Making purchase and credit decisions kp kp kp kp
B) Managing cash for liquidity and emergencies kp kp kp kp kp
C) Selecting financial institutionsfor checkingand savings accounts kp kp kp kp kp kp kp
D) Investing to achieve long-term goals kp kp kp kp
Answer: D kp
Solution: Securing your basic needs is the second element of a comprehensive
kp kp kp kp kp kp kp kp kp kp kp
financial plan. Making purchase and credit decisions, managing cash for liquidity and
kp kp kp kp kp kp kp kp kp kp kp kp
emergencies, and selecting financial institutions for checking and savings accounts
kp kp kp kp kp kp kp kp kp kp
are all activities necessary to completing this part of your plan, not long- term
kp kp kp kp kp kp kp kp kp kp kp kp kp kp
investments.
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Format: Multiple Choice kp kp
Title: Test Bank 1.1 Secure Your Basic Needs Section:
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Elements of aComprehensive Financial Plan
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Learning Objective: 1.1 Describe the personal financial planning process, and explain
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how the elements of a comprehensive financial plan fit together.
kp kp kp kp kp kp kp kp kp kp
Difficulty: Medium kp
Personal Finance, 2nd Edition Vickie L. Bajtelsmit
kp kp kp kp kp kp
Chapter 1-14kp
Chapter1 kp
To accompany Personal Finance, 2nd edition, byVickie Bajtelsmit
kp kp kp kp kp kp kp kp
Summary: 47 questions. 46 Multiple Choice | 1 Multiple Select
k p kp k p k p kp kp kp kp kp kp
LO 1.1 kp 8 17%
LO 1.2 kp 14 30%
LO 1.3 kp 5 11%
LO 1.4 kp 8 17%
LO 1.5 kp 12 26%
47
Easy 6 13%
Medium 40 85%
Hard 1 2%
47
Knowledge 6 13%
Comprehensive 18 38%
Application 17 36%
Analysis 6 13%
47
Calculations
Percentage Change Calculation
kp kp #14
Percentage Change Calculation (withdistractor)
kp kp kp kp #15
PercentageChange Calculation (multiple yrs.)
kp kp kp kp #16
Annual Percentage Change Calculation
kp kp kp #17
, Fee Calculation kp #34
Opportunity Cost Calculation kp kp #40
1. Personal finance is a specialized area of study that focuses kp kp kp kp kp kp kp kp kp
A) exclusively on investments and retirement planning. kp kp kp kp kp
B) on financial management, household budgets, and investments.
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C) exclusively on investment management and household budgets. kp kp kp kp kp kp
D) on individual and householdfinancial decisions, such as budgeting, saving,
kp kp kp kp kp kp kp kp kp
spending, tax planning, insurance, and investments.
kp kp kp kp kp kp
Answer: D kp
Solution: Personal finance is a specialized area of study that focuses on
kp kp kp kp kp kp kp kp kp kp kp
individual and household financial decisions, such as budgeting, saving,
kp kp kp kp kp kp kp kp kp
spending, tax-planning, insurance, and investments.
kp kp kp kp kp
Format: Multiple Choice kp kp
Title: Test Bank 1.1 Personal Financial Planning
kp kp kp kp kp kp
Section:WhyStudy Personal Financial Planning?
kp kp kp kp kp kp
Learning Objective: 1.1 Describe the personal financial planning process, and explain
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how the elements of a comprehensive financial plan fit together.
kp kp kp kp kp kp kp kp kp kp
Difficulty: Easy kp
Bloomcode:Knowledge
kp kp
AACSB: Knowledge
kp kp
Expected Time to Complete: 1 minute kp kp kp kp kp
2. Critical to the success of building a comprehensive financial plan is that you approach
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its creation in a logical order. The steps to success, in the correct order, are as follows:
kp kp kp kp kp kp kp kp kp kp kp kp kp kp kp kp kp
A) Secure basic needs, build and protect wealth, and establish a firm foundation. kp kp kp kp kp kp kp kp kp kp kp
B) Secure basic needs, establish a firm foundation, and build and protect wealth. kp kp kp kp kp kp kp kp kp kp k p
C) Build and protect wealth, establish a firm foundation, and secure basic needs.
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D) Establish a firm foundation, secure basic needs, and build and protect wealth. kp kp kp kp kp kp kp kp kp kp kp
Answer: D kp
Solution: Critical to the success of building a comprehensive financial plan is that you
kp kp kp kp kp kp kp kp kp kp kp kp kp
approach its creation in a logical order. The steps to success are: establish a firm
kp kp kp kp kp kp kp kp kp kp kp kp kp kp kp
foundation, secure basic needs, and build and protect wealth.
kp kp kp kp kp kp kp kp kp
Format: Multiple Choice kp kp
Title: Test Bank 1.1 Steps to a Comprehensive Financial Plan
kp kp kp kp kp kp kp kp kp
Section: Elements of a Comprehensive Financial Plan
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Learning Objective: 1.1 Describe the personal financial planning process, and explain
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how the elements of a comprehensive financial plan fit together.
kp kp kp kp kp kp kp kp kp kp
Difficulty: Medium kp
Bloomcode:Comprehension
kp kp
AACSB: Comprehension
kp kp
Expected Time to Complete: 2 minutes kp kp kp kp kp
3. The financial planning process includes five steps. Four of the steps are listed next:
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, • Analyze your current financial status. kp kp kp kp
• Implement your financial plan. kp kp kp
• Monitor your progress and revise your plan as needed. kp kp kp kp kp kp kp kp
• Organize your financial information and set short-term and long-term goals. kp kp kp kp kp kp kp kp kp
What is the missing step? kp kp kp kp
A) Identify and evaluate alternative strategies for meeting your goals. kp kp kp kp kp kp kp kp
B) Understand the personal financial planning process. kp kp kp kp kp
C) Acquire the necessary decision-making skills and tools. kp kp kp kp kp kp
D) Build wealth and protection against emergencies. kp kp kp kp kp
Answer: A kp
Solution: The five steps in the financial planning process are as follows:
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1. Organize your financial information and set short-term and long-term kp kp kp kp kp kp kp kp
goals. kp
2. Analyze your current financial status. kp kp kp kp
3. Identify and evaluate alternative strategies for achieving your goals. kp kp kp kp kp kp kp kp
4. Implement your financial plan. kp kp kp
5. Monitor your progress and revise your plan as needed. kp kp kp kp kp kp kp kp
Format: Multiple Choice kp kp
Title: Test Bank 1.1 The Five Steps in the Financial Planning Process Section:
kp kp kp kp kp kp kp kp kp kp kp kp
The Personal Financial Planning Process
kp kp kp kp kp
Learning Objective: 1.1 Describe the personal financial planning process, and explain
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how the elements of a comprehensive financial plan fit together.
kp kp kp kp kp kp kp kp kp kp
Difficulty: Medium kp
Bloomcode:Comprehension
kp kp
AACSB: Comprehension
kp kp
Expected Time to Complete: 2 minutes kp kp kp kp kp
4. An effective financial plan must be adaptable to changing circumstances. Which would
kp kp kp kp kp kp kp kp kp kp kp
not be a reason to take you back to Step 1 of the financial planning process?
kp kp kp kp kp kp kp kp kp kp kp kp kp kp kp kp
A) Changes in economic conditions kp kp kp
B) Birth of a child kp kp kp
C) Purchase of life insurance kp kp kp
D) Marriage
Answer: C kp
Solution: Many changes will occur over the course of your life. Not only will changes in
kp kp kp kp kp kp kp kp kp kp kp kp kp kp kp
your personal circumstances (a new job, marriage, and children) affect your financial
kp kp kp kp kp kp kp kp kp kp kp kp
planning objectives and strategies but also may changes in economic conditions
kp kp kp kp kp kp kp kp kp kp kp
necessitate a revision of your comprehensive financial plan. Thus, revising your plan
kp kp kp kp kp kp kp kp kp kp kp kp
takes you continually back to the beginning of the process again. Life insurance is a
kp kp kp kp kp kp kp kp kp kp kp kp kp kp kp
result of changing a financial plan.
kp kp kp kp kp kp
Format:MultipleChoice kp kp
Title: Test Bank 1.1
kp kp kp kp
Section: The Personal Financial Planning Process kp kp kp kp kp
, Learning Objective: 1.1 Describe the personal financial planning process, and explain
kp kp kp kp kp kp kp kp kp kp
how the elements of a comprehensive financial plan fit together.
kp kp kp kp kp kp kp kp kp kp
Difficulty: Medium kp
Bloomcode: Application
kp kp
AACSB:ReflectiveThinking
kp kp kp
Expected Time to Complete: 1 minute kp kp kp kp kp
5. Personal financial planning does not include which of the following?
kp kp kp kp kp kp kp kp kp
A) Buyinginsurance kp
B) Deciding which make and model of car to buy kp kp kp kp kp kp kp kp
C) Budgeting
D) Assessingattitude toward risk kp kp kp
Answer: B kp
Solution: Personal financial planning includes budgeting, savings, buying
kp kp kp kp kp kp kp
insurance, and assessing attitudes toward risk. While determining the cheapest
kp kp kp kp kp kp kp kp kp kp
form of financing and the opportunity cost associated with purchasing a car is part of
kp kp kp kp kp kp kp kp kp kp kp kp kp kp kp
financial planning, the qualitative factors involved in the make and model of a vehicle
kp kp kp kp kp kp kp kp kp kp kp kp kp kp
is not.
kp kp
Format: Multiple Choice kp kp
Title: Test Bank 1.1 Personal Financial Planning
kp kp kp kp kp kp
Section:WhyStudy Personal Financial Planning?
kp kp kp kp kp kp
Learning Objective: 1.1 Describe the personal financial planning process, and explain
kp kp kp kp kp kp kp kp kp kp
how the elements of a comprehensive financial plan fit together.
kp kp kp kp kp kp kp kp kp kp
Difficulty: Medium kp
Bloomcode:Comprehension
kp kp
AACSB: Comprehension
kp kp
Expected Time to Complete: 1 minute kp kp kp kp kp
6. Which is not a necessary activity in securing your basic needs?
kp kp kp kp kp kp kp kp kp kp
A) Making purchase and credit decisions kp kp kp kp
B) Managing cash for liquidity and emergencies kp kp kp kp kp
C) Selecting financial institutionsfor checkingand savings accounts kp kp kp kp kp kp kp
D) Investing to achieve long-term goals kp kp kp kp
Answer: D kp
Solution: Securing your basic needs is the second element of a comprehensive
kp kp kp kp kp kp kp kp kp kp kp
financial plan. Making purchase and credit decisions, managing cash for liquidity and
kp kp kp kp kp kp kp kp kp kp kp kp
emergencies, and selecting financial institutions for checking and savings accounts
kp kp kp kp kp kp kp kp kp kp
are all activities necessary to completing this part of your plan, not long- term
kp kp kp kp kp kp kp kp kp kp kp kp kp kp
investments.
kp
Format: Multiple Choice kp kp
Title: Test Bank 1.1 Secure Your Basic Needs Section:
kp kp kp kp kp kp kp kp
Elements of aComprehensive Financial Plan
kp kp kp kp kp kp
Learning Objective: 1.1 Describe the personal financial planning process, and explain
kp kp kp kp kp kp kp kp kp kp
how the elements of a comprehensive financial plan fit together.
kp kp kp kp kp kp kp kp kp kp
Difficulty: Medium kp
