unit 1 - PFI 2301

.pdf

School

Texas Tech University *

*We aren’t endorsed by this school

Course

2301

Subject

Finance

Date

Apr 3, 2024

Type

pdf

Pages

Uploaded by AmbassadorSnakePerson886 on coursehero.com

Which government agency is charged with collecting and enforcing tax laws? A. Internal Revenue Service (IRS). B. Consumer Financial Protection Bureau (CFPB). C. Securities and Exchange Commission (SEC). D. Federal Bureau of Investigation (FBI). A balance sheet includes: A. Income, expenses, and net worth B. Assets, liabilities, and expenses C. Income, liabilities, and net worth D. Assets, liabilities, and net worth Suppose that you were trying to determine how much income was available for future monetary needs as well as for investments. Which of the following ratios would you most likely use? A. Savings Ratio B. Debt Ratio C. Debt Service to Income Ratio D. Emergency Fund Ratio Which of the following describes information about a person's financial condition during a period of time? A. Balance Sheet B. Income and Expense Statement C. Statement of Net Worth D. Spending Plan Insolvency results from earning more than you spend. A. True B. False If you have a Debt Service to Income Ratio of 38%, is that above or below the recommended benchmark? A. Below B. Above Tom and Kelly McDonald have total assets valued at 97,000 and total debt of $135,000. What is Tom and Kelly's debt ratio? A. .7185 B. .5021 C. 1.3917 D. 1.2549

The life cycle chart tell us: A. How much our human capital will increase in the future because of more experience. B. How much financial assets we have at different ages. C. How much human capital we have at different ages. D. The transformation of human capital into financial capital through life. Life goals should depend on financial goals. A. TRUE B. FALSE A solid understanding of personal finance will: A. Enable you to protect yourself from an incompetent investment advisor. B. Allow you to take advantage of changes in the economy. C. Give you the ability to make intelligent investments. D. Help you understand the importance of planning for your financial future. E. All of the above. A solid understanding of personal finance will: A. It gives you the ability to manage risky investments. B. Enable you to protect yourself from an incompetent investment advisor. C. Will not allow you to take advantage of changes in the economy. D. Help you understand why you don't need to plan for your financial future. Once you have implemented your plan you are finished with the financial planning process. A. True B. False Financial plans should include objectives and goals in which of the following areas? A. Spending B. Risk management C. Capital accumulation D. All of these Paul invested $10,000 in a security that will double in value in ten years. Approximately what annual rate of return is this investment making? A. 10.00% B. 6.30% C. 7.20% D. 5.80%

Sam refuses to retire until his retirement account has a balance of at least $300,000. Sam won't make any more deposits in the account. The account currently has a balance of $200,000 and earns 5.9% per year, compounded semi-annually. If you want to figure out how long does Sam has before he will retire what would you put for the present value? A. -200,000 B. 200,000 C. -300,000 D. 300,000 E. 0 Miguel refuses to retire until his retirement account has a balance of at least $300,000. Miguel won't make any more deposits in the account. The account currently has a balance of $200,000 and earns 2.9% per year, compounded semi-annually. About how long does Miguel have before he will retire? A. 7 years B. 14 years C. 6.5 years D. 13 years SMART in SMART goals stands for: A. Satisfying, Measurable, Achievable, Rewarding, and Timely. B. Satisfying, Monitored, Achievable, Relevant, and Timely. C. Specific, Measurable, Achievable, Realistic, and Timely. D. Specific, Monitored, Attainable, Rewarding, and Timely Which of the following represents a timely goal? A. Have an income of $180,000 from personal savings, Social Security, and retirement plan assets. B. Retire at age 67 in Florida with an annual income of $80,000. C. Begin saving today to buy a beach house. D. Start saving $100 per month 5 years before you expect to need to buy a new car with a $6,000 down payment. Randy and Irene Jakes have a long-term goal of saving $28,000 for a down payment on a new home they would like to buy in three years. Which of the following is a short-term goal that is most consistent with this long-term goal? A. Purchase $2,000 worth of furniture next year. B. Save $9,000 this year. C. None are correct. D. Hope for a tax refund every year.

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