Personal Financial Planning and Investment, Exams of Advanced Education

Download Personal Financial Planning and Investment and more Exams Advanced Education in PDF only on Docsity! FINC321 Final Exam Latest (please see the page below for full answer) 1. Personal Financial Planning is a… Life-Long Process Only necessary for the wealthy What you do before retiring 2. The process of Financial Planning is… Define goals, identify choices, choosing, redefining goals, assessing the current situation, evaluating choices, identifying new choices, evaluating new choices, choosing, assessing the resulting situation over and over again Define goals, assessing the current situation, identifying choices, evaluating choices, choosing assessing the resulting situation, redefining goals, identifying new choices, evaluating new choices, choosing, reassessing the resulting situation over and over again Identify choices, choosing, identifying new choices, assessing the results, assessing current situation, defining goals, evaluating choices, assessing the resulting situation, redefining goals, evaluating new choices, choosing 3. Investors can invest in capital or credit markets by… Buying stocks Buying Bonds, government or corporate Lending a mortgage All of the above. 4. Sunk costs are… Costs that have already been spent What you get for buying a fixer-upper The overhead, like manufacturing that went into a product 5. Which financial statement shows a “snap shot” of your financial situation, for a given point in time? Income Statement Balance Sheet Cash Flow Statement 6. The process for developing a budget is… Create a budget, monitor the outcomes and analyze variance, define goals and gather data, form expectations, adjust budget and expectations Define goals and gather data, form expectations, create budget, monitor outcomes and analyze variance, adjust budget, expectations or goals Define goals and gather data, create budget, form expectations and reconcile goals and data, monitor outcomes and analyze variances, adjust budget, expectations or goals 7. In 2008, if your income was between 78,850 and 164,550 your tax bracket was… 28% 33% 15% 8. Property is taxed at the state and federal level True False 9. Money Market Mutual Funds are risker than CDs True False 10. The five factors that determine your credit score are… payment history, current debt, length of credit history, new credit issued to you, types of credit you have home ownership, credit card ownership, student loans, late payments, debit cards income, car ownership, home ownership, number of credit cards, financial portfolio 11. It is a good idea to always keep a balance on your credit card. True False 12. When buying a home and taking out a 30 year loan at 5% interest, ignoring all taxes and closing costs, what will be your monthly mortgage payment on a 250,000 home, putting 20% down? 1207.85 1073.64 939.44 13. Home insurance covers property of renters, or property kept in an apartment regularly rented. True False 14. A Health Savings Account is… Tax deductible Employee funded 25. Yeah, you just bought a new home! You spend $250,000 and put 20% down, financing the balance at 6% for the next 25 years. What is your monthly payment? $1610.75 $1,288.60 $3,865.81 26. Carol believes she needs 1,000,000 to retire comfortably. If she puts $20,000 at the end of year into her 401k and she earns 8%, how many years before she can retire? 18 21 25 27. Mary Lou borrows $14,000 to buy a car at 6% interest. If she makes a monthly payment of $425.91, how long will it take her to pay off her loan? 24 months 30 months 36 months 28. Zeb thinks Mary Lou’s car is sick and now wants his own. The car he found costs $12,000. He has $2,000 for a down payment and he plans to finance the remainder for 36 months at 6% compounded monthly. What is his monthly payment? 273.24 304.22 318.27 29. Yolanda wants to have $200,000 in the bank in five years so she can quit her job, take a year off and travel around the world. How much must she save every month for the next 5 years if she can earn 8%? 1448.15 2143.96 2721.95 30. Xavier wants to buy a $250,000 house in five years. He plans to make a 20% down payment and finance the remainder. How much must he save each month to have the required down payment if he can earn 10% on his money? 554.22 611.49 645.69 ANSWER 1. Life-Long Process 2. Define goals, assessing the current situation, identifying choices, evaluating choices, choosing assessing the resulting situation, redefining goals, identifying new choices, evaluating new choices, choosing, reassessing the resulting situation over and over again 3. Buying Bonds, government or corporate 4. Costs that have already been spent 5. Balance Sheet 6. Define goals and gather data, form expectations, create budget, monitor outcomes and analyze variance, adjust budget, expectations or goals 7. 28% 8. True 9. True 10. payment history, current debt, length of credit history, new credit issued to you, types of credit you have 11. False 12. 1073.64 13. False 14. All of the above 15. True 16. Contributions can be made until you are70.5 17. All of the above 18. Ability and willingness 19. 30 leading industrial corporations 20. Its value will decrease 21. $643,645 22. $1210 23. 2.36% 24. 9.39 years 25. $1,288.60 26. 21 27. 30 months 28. 304.22 29. 2721.95 30. 645.69