TEST BANK
Personal Financial Planning, 13th Edition,
by Gitman, Joehnk, and Billingsley.
All chapters covered.
,Chapter1—UnderstandingtheFinancialPlanningProcess
gc gc gc gc gc
TRUE/FALSE
1. Standard of living is defined as the necessities, comforts, and luxuries desired by an individual or group. ANS:
gc gc gc gc gc gc gc gc gc gc gc gc gc gc gc gc g c
T
gcg c PTS: 1 gcgcg c DIF: Easy OBJ: LO: 1-1 gcgcg c gc
NAT: BUSPROG: Reflective thinking
gcg c gc gc STA: DISC: Financial Markets and Interest Rates
gcg c gc gc gc gc gc
KEY: Bloom's: Knowledge gcg c gc
2. Your average propensity to consume is the percentage of each dollar of income, on the average, that is spent
gc gc gc gc gc gc gc gc gc gc gc gc gc gc gc gc gc g c gc
for current needs rather than savings.
gc gc gc gc gc
ANS: T PTS: 1 gcg c gcgcg c DIF: Easy OBJ: LO: 1-1 gcgcg c gc
NAT: BUSPROG: Reflective thinking
gcg c gc gc
STA: DISC: Financial Markets and Interest Rates
gcg c gc gc gc gc gc g c
KEY: Bloom's: Knowledge gcg c gc
3. A good financial plan completed when one is in their 30s will typically last a lifetime. ANS:
gc gc gc gc gc gc gc gc gc gc gc gc gc gc gc g c gc
F
g c PTS: 1 gcgcg c DIF: Challenging OBJ: LO: 1-2 gcgcg c gc
NAT: BUSPROG: Reflective thinking
gcg c gc gc
STA: DISC: Financial Markets and Interest Rates
gcg c gc gc gc gc gc g c
KEY: Bloom's: Synthesis gcg c gc
4. Financial planning is a continuing, life-long process. gc gc gc gc gc gc
ANS: T PTS: 1 gcg c gcgcg c DIF: Easy OBJ: LO: 1-2 gcgcg c gc
NAT: BUSPROG: Reflective thinking
gcg c gc gc
STA: DISC: Financial Markets and Interest Rates
gcg c gc gc gc gc gc g c
KEY: Bloom's: Comprehension gcg c gc
5. Financial planning can improve your standard of living. gc gc gc gc gc gc gc
ANS: T PTS: 1 gcg c gcgcg c DIF: Easy OBJ: LO: 1-1 gcgcg c gc
NAT: BUSPROG: Reflective thinking
gcg c gc gc
STA: DISC: Financial Markets and Interest Rates
gcg c gc gc gc gc gc g c
KEY: Bloom's: Comprehension gcg c gc
6. Current consumption is inverselyrelated to saving for the future.
gc gc gc gc gc gc gc gc gc
ANS: T PTS: 1 gcg c gcgcg c DIF: Challenging OBJ: LO: 1-1 gcgcg c gc
NAT: BUSPROG: Reflective thinking
gcg c gc gc
STA: DISC: Financial Markets and Interest Rates
gcg c gc gc gc gc gc g c
KEY: Bloom's: Analysis gcg c gc
7. About 20% of Americans say retirement planning is their most pressing financial concern.
gc gc gc gc gc gc gc gc gc gc gc gc
, ANS: F PTS: 1 gcg c gcgcg c DIF: Moderate OBJ: LO: 1-1 gcgcg c gc
NAT: BUSPROG: Reflective thinking gcg c gc gc
STA: DISC: Financial Markets and Interest Rates
gcg c gc gc gc gc gc g c
KEY: Bloom's: Knowledge gcg c gc
8. The most effective way to achieve financial objectives is through financial planning. AN
gc gc gc gc gc gc gc gc gc gc gc g c
S: T gcg PTS: 1
c gcgcg c DIF: Moderate OBJ: LO: 1-1 gcgcg c gc
NAT: BUSPROG: Reflective thinking gcg c gc gc
STA: DISC: Financial Markets and Interest Rates
gcg c gc gc gc gc gc g c
KEY: Bloom's: Comprehension gcg c gc
9. Defining financial goals is an important first step in personal financial planning process. AN
gc gc gc gc gc gc gc gc gc gc gc gc g c
S: T gcg c PTS: 1 gcgcg c DIF: Easy OBJ: LO: 1-2 gcgcg c gc
NAT: BUSPROG: Reflective thinking gcg c gc gc STA: DISC: Financial Markets and Interest Rates
gcg c gc gc gc gc gc
KEY: Bloom's: Comprehension gcg c gc
10. Two persons with equal average propensities to consume will not necessarily have equal standards of livin
gc gc gc gc gc gc gc gc gc gc gc gc gc gc g c
g because of differences in income.
gc gc gc gc gc
ANS: T PTS: 1 gcg c gcgcg c DIF: Challenging OBJ: LO: 1-1 gcgcg c gc
NAT: BUSPROG: Reflective thinking gcg c gc gc
STA: DISC: Financial Markets and Interest Rates
gcg c gc gc gc gc gc g c
KEY: Bloom's: Evaluation gcg c gc
11. The need for financial planning declines as your income increases.
gc gc gc gc gc gc gc gc gc
ANS: F PTS: 1 gcg c gcgcg c DIF: Moderate OBJ: LO: 1-1 gcgcg c gc
NAT: BUSPROG: Reflective thinking gcg c gc gc
STA: DISC: Financial Markets and Interest Rates
gcg c gc gc gc gc gc g c
KEY: Bloom's: Synthesis gcg c gc
12. Current consumption effects future consumption. gc gc gc gc
ANS: T PTS: 1 gcg c gcgcg c DIF: Challenging OBJ: LO: 1-1 gcgcg c gc
NAT: BUSPROG: Reflective thinking gcg c gc gc
STA: DISC: Financial Markets and Interest Rates
gcg c gc gc gc gc gc g c
KEY: Bloom's: Analysis gcg c gc
13. A person who has $2,000 monthly income and spends $1,800 monthly has anaverage propensity to cons
gc gc gc gc gc gc gc gc gc gc gc gc gc gc gc g c
ume of 90%. gc gc
ANS: T PTS: 1 gcg c gcgcg c DIF: Challenging OBJ: LO: 1-1 gcgcg c gc
NAT: BUSPROG: Reflective thinking gcg c gc gc
STA: DISC: Financial Markets and Interest Rates
gcg c gc gc gc gc gc g c
KEY: Bloom's: Evaluation gcg c gc
14. A person making $35,000 and spending $30,800 has an average propensity to consume of 80%. AN
gc gc gc gc gc gc gc gc gc gc gc gc gc gc g c
S: F gcg c PTS: 1 gcgcg c DIF: Challenging OBJ: LO: 1-1 gcgcg c gc
NAT: BUSPROG: Reflective thinking gcg c gc gc STA: DISC: Financial Markets and Interest Rates
gcg c gc gc gc gc gc
KEY: Bloom's: Evaluation gcg c gc
15. Most families find it difficult to discuss money matters.
gc gc gc gc gc gc gc gc
, ANS: T
gcg c PTS: 1
gcgcg c DIF: Easy OBJ: LO: 1-2
gcgcg c gc
Personal Financial Planning, 13th Edition,
by Gitman, Joehnk, and Billingsley.
All chapters covered.
,Chapter1—UnderstandingtheFinancialPlanningProcess
gc gc gc gc gc
TRUE/FALSE
1. Standard of living is defined as the necessities, comforts, and luxuries desired by an individual or group. ANS:
gc gc gc gc gc gc gc gc gc gc gc gc gc gc gc gc g c
T
gcg c PTS: 1 gcgcg c DIF: Easy OBJ: LO: 1-1 gcgcg c gc
NAT: BUSPROG: Reflective thinking
gcg c gc gc STA: DISC: Financial Markets and Interest Rates
gcg c gc gc gc gc gc
KEY: Bloom's: Knowledge gcg c gc
2. Your average propensity to consume is the percentage of each dollar of income, on the average, that is spent
gc gc gc gc gc gc gc gc gc gc gc gc gc gc gc gc gc g c gc
for current needs rather than savings.
gc gc gc gc gc
ANS: T PTS: 1 gcg c gcgcg c DIF: Easy OBJ: LO: 1-1 gcgcg c gc
NAT: BUSPROG: Reflective thinking
gcg c gc gc
STA: DISC: Financial Markets and Interest Rates
gcg c gc gc gc gc gc g c
KEY: Bloom's: Knowledge gcg c gc
3. A good financial plan completed when one is in their 30s will typically last a lifetime. ANS:
gc gc gc gc gc gc gc gc gc gc gc gc gc gc gc g c gc
F
g c PTS: 1 gcgcg c DIF: Challenging OBJ: LO: 1-2 gcgcg c gc
NAT: BUSPROG: Reflective thinking
gcg c gc gc
STA: DISC: Financial Markets and Interest Rates
gcg c gc gc gc gc gc g c
KEY: Bloom's: Synthesis gcg c gc
4. Financial planning is a continuing, life-long process. gc gc gc gc gc gc
ANS: T PTS: 1 gcg c gcgcg c DIF: Easy OBJ: LO: 1-2 gcgcg c gc
NAT: BUSPROG: Reflective thinking
gcg c gc gc
STA: DISC: Financial Markets and Interest Rates
gcg c gc gc gc gc gc g c
KEY: Bloom's: Comprehension gcg c gc
5. Financial planning can improve your standard of living. gc gc gc gc gc gc gc
ANS: T PTS: 1 gcg c gcgcg c DIF: Easy OBJ: LO: 1-1 gcgcg c gc
NAT: BUSPROG: Reflective thinking
gcg c gc gc
STA: DISC: Financial Markets and Interest Rates
gcg c gc gc gc gc gc g c
KEY: Bloom's: Comprehension gcg c gc
6. Current consumption is inverselyrelated to saving for the future.
gc gc gc gc gc gc gc gc gc
ANS: T PTS: 1 gcg c gcgcg c DIF: Challenging OBJ: LO: 1-1 gcgcg c gc
NAT: BUSPROG: Reflective thinking
gcg c gc gc
STA: DISC: Financial Markets and Interest Rates
gcg c gc gc gc gc gc g c
KEY: Bloom's: Analysis gcg c gc
7. About 20% of Americans say retirement planning is their most pressing financial concern.
gc gc gc gc gc gc gc gc gc gc gc gc
, ANS: F PTS: 1 gcg c gcgcg c DIF: Moderate OBJ: LO: 1-1 gcgcg c gc
NAT: BUSPROG: Reflective thinking gcg c gc gc
STA: DISC: Financial Markets and Interest Rates
gcg c gc gc gc gc gc g c
KEY: Bloom's: Knowledge gcg c gc
8. The most effective way to achieve financial objectives is through financial planning. AN
gc gc gc gc gc gc gc gc gc gc gc g c
S: T gcg PTS: 1
c gcgcg c DIF: Moderate OBJ: LO: 1-1 gcgcg c gc
NAT: BUSPROG: Reflective thinking gcg c gc gc
STA: DISC: Financial Markets and Interest Rates
gcg c gc gc gc gc gc g c
KEY: Bloom's: Comprehension gcg c gc
9. Defining financial goals is an important first step in personal financial planning process. AN
gc gc gc gc gc gc gc gc gc gc gc gc g c
S: T gcg c PTS: 1 gcgcg c DIF: Easy OBJ: LO: 1-2 gcgcg c gc
NAT: BUSPROG: Reflective thinking gcg c gc gc STA: DISC: Financial Markets and Interest Rates
gcg c gc gc gc gc gc
KEY: Bloom's: Comprehension gcg c gc
10. Two persons with equal average propensities to consume will not necessarily have equal standards of livin
gc gc gc gc gc gc gc gc gc gc gc gc gc gc g c
g because of differences in income.
gc gc gc gc gc
ANS: T PTS: 1 gcg c gcgcg c DIF: Challenging OBJ: LO: 1-1 gcgcg c gc
NAT: BUSPROG: Reflective thinking gcg c gc gc
STA: DISC: Financial Markets and Interest Rates
gcg c gc gc gc gc gc g c
KEY: Bloom's: Evaluation gcg c gc
11. The need for financial planning declines as your income increases.
gc gc gc gc gc gc gc gc gc
ANS: F PTS: 1 gcg c gcgcg c DIF: Moderate OBJ: LO: 1-1 gcgcg c gc
NAT: BUSPROG: Reflective thinking gcg c gc gc
STA: DISC: Financial Markets and Interest Rates
gcg c gc gc gc gc gc g c
KEY: Bloom's: Synthesis gcg c gc
12. Current consumption effects future consumption. gc gc gc gc
ANS: T PTS: 1 gcg c gcgcg c DIF: Challenging OBJ: LO: 1-1 gcgcg c gc
NAT: BUSPROG: Reflective thinking gcg c gc gc
STA: DISC: Financial Markets and Interest Rates
gcg c gc gc gc gc gc g c
KEY: Bloom's: Analysis gcg c gc
13. A person who has $2,000 monthly income and spends $1,800 monthly has anaverage propensity to cons
gc gc gc gc gc gc gc gc gc gc gc gc gc gc gc g c
ume of 90%. gc gc
ANS: T PTS: 1 gcg c gcgcg c DIF: Challenging OBJ: LO: 1-1 gcgcg c gc
NAT: BUSPROG: Reflective thinking gcg c gc gc
STA: DISC: Financial Markets and Interest Rates
gcg c gc gc gc gc gc g c
KEY: Bloom's: Evaluation gcg c gc
14. A person making $35,000 and spending $30,800 has an average propensity to consume of 80%. AN
gc gc gc gc gc gc gc gc gc gc gc gc gc gc g c
S: F gcg c PTS: 1 gcgcg c DIF: Challenging OBJ: LO: 1-1 gcgcg c gc
NAT: BUSPROG: Reflective thinking gcg c gc gc STA: DISC: Financial Markets and Interest Rates
gcg c gc gc gc gc gc
KEY: Bloom's: Evaluation gcg c gc
15. Most families find it difficult to discuss money matters.
gc gc gc gc gc gc gc gc
, ANS: T
gcg c PTS: 1
gcgcg c DIF: Easy OBJ: LO: 1-2
gcgcg c gc
