Solution Manual for Personal Financial Planning 15th Edition by Randy Billingsley, Lawrence J. Gitman | Complete Verified Chapter's |Solution Manual

TEST BANK
Personal Financial Planning, 13th Edition,
by Gitman, Joehnk, and Billingsley.
All chapters covered.

,Chapter 1—Understanding the Financial Planning Process
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TRUE/FALSE

1. Standard of living is defined as the necessities, comforts, and luxuries desired by an individual or group.
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NAT: BUSPROG: Reflective thinking
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KEY: Bloom's: Knowledge
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2. Your average propensity to consume is the percentage of each dollar of income, on the average, that is
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spent for current needs rather than savings.
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ANS: T PTS: 1
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NAT: BUSPROG: Reflective thinking
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STA: DISC: Financial Markets and Interest Rates
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h t KEY: Bloom's: Knowledge
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3. A good financial plan completed when one is in their 30s will typically last a lifetime.
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ANS: F PTS: 1
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NAT: BUSPROG: Reflective thinking
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STA: DISC: Financial Markets and Interest Rates
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4. Financial planning is a continuing, life-long process.
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NAT: BUSPROG: Reflective thinking
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STA: DISC: Financial Markets and Interest Rates
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h t KEY: Bloom's: Comprehension
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5. Financial planning can improve your standard of living.
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ANS: T PTS: 1
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NAT: BUSPROG: Reflective thinking
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STA: DISC: Financial Markets and Interest Rates
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6. Current consumption is inversely related to saving for the future.
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ANS: T PTS: 1
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NAT: BUSPROG: Reflective thinking
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STA: DISC: Financial Markets and Interest Rates
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7. About 20% of Americans say retirement planning is their most pressing financial concern.
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, ANS: F PTS: 1hth t hthth t DIF: Moderate OBJ: LO: 1-1
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NAT: BUSPROG: Reflective thinking
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STA: DISC: Financial Markets and Interest Rates
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8. The most effective way to achieve financial objectives is through financial planning.
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NAT: BUSPROG: Reflective thinking
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STA: DISC: Financial Markets and Interest Rates
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9. Defining financial goals is an important first step in personal financial planning process.
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ANS: T PTS: 1
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NAT: BUSPROG: Reflective thinking
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KEY: Bloom's: Comprehension
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10. Two persons with equal average propensities to consume will not necessarily have equal standards of
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living because of differences in income.
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NAT: BUSPROG: Reflective thinking
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STA: DISC: Financial Markets and Interest Rates
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11. The need for financial planning declines as your income increases.
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ANS: F PTS: 1hth t hthth t DIF: Moderate OBJ: LO: 1-1
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NAT: BUSPROG: Reflective thinking
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STA: DISC: Financial Markets and Interest Rates
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12. Current consumption effects future consumption.
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NAT: BUSPROG: Reflective thinking
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STA: DISC: Financial Markets and Interest Rates
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13. A person who has $2,000 monthly income and spends $1,800 monthly has an average propensity to
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consume of 90%. ht ht




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NAT: BUSPROG: Reflective thinking
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STA: DISC: Financial Markets and Interest Rates
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14. A person making $35,000 and spending $30,800 has an average propensity to consume of 80%.
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NAT: BUSPROG: Reflective thinking
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KEY: Bloom's: Evaluation hth t ht




15. Most families find it difficult to discuss money matters.
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, ANS: T
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