TEST BANK
Personal Financial Planning, 13th Edition,
by Gitman, Joehnk, and Billingsley.
All chapters covered.
,Chapterc1—UnderstandingcthecFinancialcPlanningcProcess
TRUE/FALSE
1. Standardcofclivingciscdefinedcascthecnecessities,ccomforts,candcluxuriescdesiredcbycancindividualcorcgroup.
cANS:cc T PTS:ccc 1 DIF: Easy OBJ:ccc LO:c1-1
NAT:cc BUSPROG:cReflectivecthinking STA:cc DISC:cFinancialcMarketscandcInterestcRates
KEY:cc Bloom's:cKnowledge
2. Yourcaveragecpropensityctocconsumeciscthecpercentagecofceachcdollarcofcincome,concthecaverage,cthatcis
c spentcforccurrentcneedscrathercthancsavings.
ANS:cc T PTS:ccc 1 DIF: Easy OBJ:ccc LO:c1-1
NAT:cc BUSPROG:cReflectivecthinking
STA:cc DISC:cFinancialcMarketscandcInterestcRates
c KEY:cc Bloom's:cKnowledge
3. Acgoodcfinancialcplanccompletedcwhenconeciscinctheirc30scwillctypicallyclastcaclifetime.c
ANS:cc F PTS:ccc 1 DIF: Challenging OBJ:ccc LO:c1-2
NAT:cc BUSPROG:cReflectivecthinking
STA:cc DISC:cFinancialcMarketscandcInterestcRates
c KEY:cc Bloom's:cSynthesis
4. Financialcplanningciscaccontinuing,clife-longcprocess.
ANS:cc T PTS:ccc 1 DIF: Easy OBJ:ccc LO:c1-2
NAT:cc BUSPROG:cReflectivecthinking
STA:cc DISC:cFinancialcMarketscandcInterestcRates
c KEY:cc Bloom's:cComprehension
5. Financialcplanningccancimprovecyourcstandardcofcliving.
ANS:cc T PTS:ccc 1 DIF: Easy OBJ:ccc LO:c1-1
NAT:cc BUSPROG:cReflectivecthinking
STA:cc DISC:cFinancialcMarketscandcInterestcRates
c KEY:cc Bloom's:cComprehension
6. Currentcconsumptionciscinverselycrelatedctocsavingcforcthecfuture.
ANS:cc T PTS:ccc 1 DIF: Challenging OBJ:ccc LO:c1-1
NAT:cc BUSPROG:cReflectivecthinking
STA:cc DISC:cFinancialcMarketscandcInterestcRates
c KEY:cc Bloom's:cAnalysis
7. Aboutc20%cofcAmericanscsaycretirementcplanningcisctheircmostcpressingcfinancialcconcern.
, ANS:cc F PTS:ccc 1 DIF: Moderate OBJ:ccc LO:c1-1
NAT:cc BUSPROG:cReflectivecthinking
STA:cc DISC:cFinancialcMarketscandcInterestcRates
c KEY:cc Bloom's:cKnowledge
8. Thecmostceffectivecwayctocachievecfinancialcobjectivesciscthroughcfinancialcplanning.
cANS:cc T PTS:ccc 1 DIF: Moderate OBJ:ccc LO:c1-1
NAT:cc BUSPROG:cReflectivecthinking
STA:cc DISC:cFinancialcMarketscandcInterestcRates
c KEY:cc Bloom's:cComprehension
9. Definingcfinancialcgoalsciscancimportantcfirstcstepcincpersonalcfinancialcplanningcprocess.c
ANS:cc T PTS:ccc 1 DIF: Easy OBJ:ccc LO:c1-2
NAT:cc BUSPROG:cReflectivecthinking STA:cc DISC:cFinancialcMarketscandcInterestcRates
KEY:cc Bloom's:cComprehension
10. Twocpersonscwithcequalcaveragecpropensitiesctocconsumecwillcnotcnecessarilychavecequalcstandardscof
c livingcbecausecofcdifferencescincincome.
ANS:cc T PTS:ccc 1 DIF: Challenging OBJ:ccc LO:c1-1
NAT:cc BUSPROG:cReflectivecthinking
STA:cc DISC:cFinancialcMarketscandcInterestcRates
c KEY:cc Bloom's:cEvaluation
11. Thecneedcforcfinancialcplanningcdeclinescascyourcincomecincreases.
ANS:cc F PTS:ccc 1 DIF: Moderate OBJ:ccc LO:c1-1
NAT:cc BUSPROG:cReflectivecthinking
STA:cc DISC:cFinancialcMarketscandcInterestcRates
c KEY:cc Bloom's:cSynthesis
12. Currentcconsumptionceffectscfuturecconsumption.
ANS:cc T PTS:ccc 1 DIF: Challenging OBJ:ccc LO:c1-1
NAT:cc BUSPROG:cReflectivecthinking
STA:cc DISC:cFinancialcMarketscandcInterestcRates
c KEY:cc Bloom's:cAnalysis
13. Acpersoncwhochasc$2,000cmonthlycincomecandcspendsc$1,800cmonthlychascancaveragecpropensitycto
c consumecofc90%.
ANS:cc T PTS:ccc 1 DIF: Challenging OBJ:ccc LO:c1-1
NAT:cc BUSPROG:cReflectivecthinking
STA:cc DISC:cFinancialcMarketscandcInterestcRates
c KEY:cc Bloom's:cEvaluation
14. Acpersoncmakingc$35,000candcspendingc$30,800chascancaveragecpropensityctocconsumecofc80%.
cANS:cc F PTS:ccc 1 DIF: Challenging OBJ:ccc LO:c1-1
NAT:cc BUSPROG:cReflectivecthinking STA:cc DISC:cFinancialcMarketscandcInterestcRates
KEY:cc Bloom's:cEvaluation
15. Mostcfamiliescfindcitcdifficultctocdiscusscmoneycmatters.
, ANS:cc T PTS:ccc 1 DIF: Easy OBJ:ccc LO:c1-2
Personal Financial Planning, 13th Edition,
by Gitman, Joehnk, and Billingsley.
All chapters covered.
,Chapterc1—UnderstandingcthecFinancialcPlanningcProcess
TRUE/FALSE
1. Standardcofclivingciscdefinedcascthecnecessities,ccomforts,candcluxuriescdesiredcbycancindividualcorcgroup.
cANS:cc T PTS:ccc 1 DIF: Easy OBJ:ccc LO:c1-1
NAT:cc BUSPROG:cReflectivecthinking STA:cc DISC:cFinancialcMarketscandcInterestcRates
KEY:cc Bloom's:cKnowledge
2. Yourcaveragecpropensityctocconsumeciscthecpercentagecofceachcdollarcofcincome,concthecaverage,cthatcis
c spentcforccurrentcneedscrathercthancsavings.
ANS:cc T PTS:ccc 1 DIF: Easy OBJ:ccc LO:c1-1
NAT:cc BUSPROG:cReflectivecthinking
STA:cc DISC:cFinancialcMarketscandcInterestcRates
c KEY:cc Bloom's:cKnowledge
3. Acgoodcfinancialcplanccompletedcwhenconeciscinctheirc30scwillctypicallyclastcaclifetime.c
ANS:cc F PTS:ccc 1 DIF: Challenging OBJ:ccc LO:c1-2
NAT:cc BUSPROG:cReflectivecthinking
STA:cc DISC:cFinancialcMarketscandcInterestcRates
c KEY:cc Bloom's:cSynthesis
4. Financialcplanningciscaccontinuing,clife-longcprocess.
ANS:cc T PTS:ccc 1 DIF: Easy OBJ:ccc LO:c1-2
NAT:cc BUSPROG:cReflectivecthinking
STA:cc DISC:cFinancialcMarketscandcInterestcRates
c KEY:cc Bloom's:cComprehension
5. Financialcplanningccancimprovecyourcstandardcofcliving.
ANS:cc T PTS:ccc 1 DIF: Easy OBJ:ccc LO:c1-1
NAT:cc BUSPROG:cReflectivecthinking
STA:cc DISC:cFinancialcMarketscandcInterestcRates
c KEY:cc Bloom's:cComprehension
6. Currentcconsumptionciscinverselycrelatedctocsavingcforcthecfuture.
ANS:cc T PTS:ccc 1 DIF: Challenging OBJ:ccc LO:c1-1
NAT:cc BUSPROG:cReflectivecthinking
STA:cc DISC:cFinancialcMarketscandcInterestcRates
c KEY:cc Bloom's:cAnalysis
7. Aboutc20%cofcAmericanscsaycretirementcplanningcisctheircmostcpressingcfinancialcconcern.
, ANS:cc F PTS:ccc 1 DIF: Moderate OBJ:ccc LO:c1-1
NAT:cc BUSPROG:cReflectivecthinking
STA:cc DISC:cFinancialcMarketscandcInterestcRates
c KEY:cc Bloom's:cKnowledge
8. Thecmostceffectivecwayctocachievecfinancialcobjectivesciscthroughcfinancialcplanning.
cANS:cc T PTS:ccc 1 DIF: Moderate OBJ:ccc LO:c1-1
NAT:cc BUSPROG:cReflectivecthinking
STA:cc DISC:cFinancialcMarketscandcInterestcRates
c KEY:cc Bloom's:cComprehension
9. Definingcfinancialcgoalsciscancimportantcfirstcstepcincpersonalcfinancialcplanningcprocess.c
ANS:cc T PTS:ccc 1 DIF: Easy OBJ:ccc LO:c1-2
NAT:cc BUSPROG:cReflectivecthinking STA:cc DISC:cFinancialcMarketscandcInterestcRates
KEY:cc Bloom's:cComprehension
10. Twocpersonscwithcequalcaveragecpropensitiesctocconsumecwillcnotcnecessarilychavecequalcstandardscof
c livingcbecausecofcdifferencescincincome.
ANS:cc T PTS:ccc 1 DIF: Challenging OBJ:ccc LO:c1-1
NAT:cc BUSPROG:cReflectivecthinking
STA:cc DISC:cFinancialcMarketscandcInterestcRates
c KEY:cc Bloom's:cEvaluation
11. Thecneedcforcfinancialcplanningcdeclinescascyourcincomecincreases.
ANS:cc F PTS:ccc 1 DIF: Moderate OBJ:ccc LO:c1-1
NAT:cc BUSPROG:cReflectivecthinking
STA:cc DISC:cFinancialcMarketscandcInterestcRates
c KEY:cc Bloom's:cSynthesis
12. Currentcconsumptionceffectscfuturecconsumption.
ANS:cc T PTS:ccc 1 DIF: Challenging OBJ:ccc LO:c1-1
NAT:cc BUSPROG:cReflectivecthinking
STA:cc DISC:cFinancialcMarketscandcInterestcRates
c KEY:cc Bloom's:cAnalysis
13. Acpersoncwhochasc$2,000cmonthlycincomecandcspendsc$1,800cmonthlychascancaveragecpropensitycto
c consumecofc90%.
ANS:cc T PTS:ccc 1 DIF: Challenging OBJ:ccc LO:c1-1
NAT:cc BUSPROG:cReflectivecthinking
STA:cc DISC:cFinancialcMarketscandcInterestcRates
c KEY:cc Bloom's:cEvaluation
14. Acpersoncmakingc$35,000candcspendingc$30,800chascancaveragecpropensityctocconsumecofc80%.
cANS:cc F PTS:ccc 1 DIF: Challenging OBJ:ccc LO:c1-1
NAT:cc BUSPROG:cReflectivecthinking STA:cc DISC:cFinancialcMarketscandcInterestcRates
KEY:cc Bloom's:cEvaluation
15. Mostcfamiliescfindcitcdifficultctocdiscusscmoneycmatters.
, ANS:cc T PTS:ccc 1 DIF: Easy OBJ:ccc LO:c1-2
