SOLUTION MANUAL FOR
Introduction to Personal Finance Beginning Your Financial Journey, 2nd
Edition John E. Grable, Lance Palmer
Chapter 1-10
Chapter 1—Solutions Manual
Beginning Your Financial Journey: The Interior Finance Point of View
Introduction to Personal Finance: Beginning Your Financial Journey
By John Grable and Lance Palmer
Learning Objectives
1.1 Describe how your financial knowledge, experience, risk tolerance, and feelings of control
influence the way you view the financial world.
1.2 Explain how your human and social capital relate to your financial well-being.
1.3 Discuss how financial risk tolerance relates to financial goal achievement.
1.4 Use your unique time perspective to create SMART financial goals.
1.5 Describe strategies to overcome mental biases and improve financial decision making and
well-being.
Key to metadata for questions:
LO: Learning objective number
BT: Bloom‘s taxonomy [Knowledge (K), Comprehension (C), Application (Ap), Analysis (An),
Synthesis (S), Evaluation (E)]
Diff: Difficulty level [Easy (E), Medium (M), Hard (H)]
TOT: Expected time for student to complete
AACSB: Knowledge (K), Communication (C), Ethics (E), Analytic (A), Technology (T), Diversity
(D), Reflective Thinking (RT), Not Applicable (NA)
Sample rubric for writing questions:
Note: It is generally recommended that the rubric be shared with students, so it should be
sufficiently general to not give away answers.
Notes for instructor:
Each writing question will have criteria which are specific to the question. The instructor
may want to add or delete grading criteria (rows) depending on the topic and assignment.
How each grading criterion will be assessed and the associated points for each level of
performance are found in columns 2–5.
, In the sample rubric, a total of 16 points are possible for this assignment. Each grading
criterion (row) is worth up to 4 points (column 2).
Rubric: (It is suggested that the rubric be shared with the students.)
Full points 75% of points 50% of points 25% of points
Criteria
(4 out of 4) (3 out of 4) (2 out of 4) (1 out of 4)
Thoroughness of
The question The response is The response is The response is
answer to the
is answered lacking a few lacking significant incomplete and
question
thoroughly details details limited
Amounts and
Much of the The response does
information Some of the
Answer is response is not represent
discussed are response is
realistic/relevant irrelevant, realistic or relevant
relevant and irrelevant to the
unrealistic, or understanding of
pertinent to question
overly simplistic topic
the question
Organization/clarity
Well Adequate Limited
of thought Poor organization
organized organization organization
(25% of score)
A clear
conclusion or
recommendati
Appropriate Conclusion or
on is
recommendations recommendation Conclusion or No conclusion or
presented
and conclusions are is mostly clear recommendation recommendation is
that is
reached and appropriate is incomplete provided
appropriate
(25% of score) given the content
given the
content
discussed
1.1 Describe how your financial knowledge, experience, risk
tolerance, and feelings of control influence the way you view the
financial world.
1.1 Multiple-Choice Questions
1. b. the combination of financial knowledge and skills.
Answer: b; Section: 1.1; LO: 1.1; BT: K; Diff: E; TOT: 2 min; AACSB: K
2. c. I and II only.
Answer: c; Section: 1.1; LO: 1.1; BT: C; Diff: E; TOT: 2 min; AACSB: RT
3. d. your financial knowledge, financial risk-taking, and feelings of control over your
situation.
Answer: d; Section: 1.1; LO: 1.1; BT: K; Diff: E; TOT: 2 min; AACSB: RT
,4. c. believe strongly in luck and fate
Answer: c; Section: 1.1; LO: 1.1; BT: C; Diff: E; TOT: 2 min; AACSB: RT
5. a. more knowledgeable about the financial marketplace over time and to increase his
personal wealth.
Answer: a; Section: 1.1; LO: 1.1; BT: C; Diff: E; TOT: 2 min; AACSB: RT
6. c. Having and raising a child.
Answer: c; Section: 1.1; LO: 1.1; BT: C; Diff: E; TOT: 2 min; AACSB: RT
7. a. Consumer spending.
Answer: a; Section: 1.1; LO: 1.1; BT: K; Diff: E; TOT: 2 min; AACSB: K
8. b. GDP would fall because consumers would spend less on goods and services.
Answer: b; Section: 1.1; LO: 1.1; BT: C; Diff: E; TOT: 2 min; AACSB: RT
9. a. A willingness to save money on a regular basis.
Answer: a; Section: 1.1; LO: 1.1; BT: C; Diff: E; TOT: 2 min; AACSB: RT
10. c. Michelle, who gives regularly to charity, reads about investing and is self-confident.
Answer: c; Section: 1.1; LO: 1.1; BT: C; Diff: E; TOT: 2 min; AACSB: RT
1.1. Adventures in Personal Finance
Short Answer
1. Answer: High-quality responses should include a discussion of how the wealth was
accumulated, work effort, and locus of control (chance versus work), and also include a
discussion of the student‘s perception of his or her locus of control. Please refer to the
sample writing assignment rubric in the solutions manual.
Section: 1.1; LO: 1.1; BT: C; Diff: E; TOT: 15 min; AACSB: RT, E
2. Answer: Risk tolerance describes your willingness to engage in financial activities that
have uncertain outcomes. Individuals with low risk tolerance may be fearful of the financial
markets and financial activities and avoid them. As your financial literacy increases and
risk perceptions are properly understood, your willingness to engage in risks may
increase.
Section: 1.1; LO: 1.1; BT: Ap; Diff: M; TOT: 5 min; AACSB: RT, A
3. Answer: High-quality responses should include a discussion of how savings behavior may
differ between generations. Please refer to the sample writing assignment rubric in the
solutions manual.
Section: 1.1; LO: 1.1; BT: Ap or An; Diff: M; TOT: 20 min; AACSB: RT, D
4. Answers will vary based on student experiences. The sample grading rubric found in the
solutions manual can be adapted to grade this assignment.
, Section: 1.1; LO: 1.1; BT: Ap; Diff: M; TOT: 20 min; AACSB: RT
Explore
1. Answer: GDP decreased during this time period. A recession is a decrease in GDP.
Section: 1.1; LO: 1.1; BT: An; Diff: E; TOT: 10 min; AACSB: A
2. Answer: High-quality responses should include a discussion of material that the student
found as well as the student‘s assessment of that material. Please refer to the sample
writing assignment rubric in the solutions manual.
Section: 1.1; LO: 1.1; BT: C; Diff: E; TOT: 20 min; AACSB: T
3. Answer: High-quality responses should include a discussion of how well the student
performed in the game and the student‘s assessment whether this type of learning
platform is helpful for others. Students should justify their responses. Please refer to the
sample writing assignment rubric in the solutions manual.
Section: 1.1; LO: 1.1; BT: An; Diff: M; TOT: 20 min; AACSB: C
4. Answer: The F.I.R.E. movement may appeal to individuals studying personal finance. The
notion of saving money early if life in order to exit the job market to pursue life dreams,
community service, and work-life balance is something that appeals to Millennials and
others who find working to be restrictive. There are no correct or incorrect answers to this
question. After researching the movement, students may realize that the reality of filling 30
to 50 years of daily experience outside of the job market may not be match the dream,
especially if the retirement budget is very tight. Please refer to the sample writing
assignment rubric in the solutions manual.
Section: 1.1; LO: 1.1; BT: An; Diff: M; TOT: 20 min; AACSB: C
Expanded Learning Activity
Answer: High-quality responses should discuss the results of the research and how those
results relate to financial planning. Please refer to the sample writing assignment rubric in
the solutions manual.
Section: 1.1; LO: 1.1; BT: E; Diff: H; TOT: 120 min; AACSB: C
1.1 Practice Questions
(The Practice Questions do not appear in the printed textbook. Autogradable version is available
in your Wiley course, with algorithmically changing values when applicable.)
1. Which of the following elements influence your view of the financial world?
I. Your risk tolerance.
II. How much you believe you control your financial future.
III. Knowledge about personal finance topics.
a. II only.
Introduction to Personal Finance Beginning Your Financial Journey, 2nd
Edition John E. Grable, Lance Palmer
Chapter 1-10
Chapter 1—Solutions Manual
Beginning Your Financial Journey: The Interior Finance Point of View
Introduction to Personal Finance: Beginning Your Financial Journey
By John Grable and Lance Palmer
Learning Objectives
1.1 Describe how your financial knowledge, experience, risk tolerance, and feelings of control
influence the way you view the financial world.
1.2 Explain how your human and social capital relate to your financial well-being.
1.3 Discuss how financial risk tolerance relates to financial goal achievement.
1.4 Use your unique time perspective to create SMART financial goals.
1.5 Describe strategies to overcome mental biases and improve financial decision making and
well-being.
Key to metadata for questions:
LO: Learning objective number
BT: Bloom‘s taxonomy [Knowledge (K), Comprehension (C), Application (Ap), Analysis (An),
Synthesis (S), Evaluation (E)]
Diff: Difficulty level [Easy (E), Medium (M), Hard (H)]
TOT: Expected time for student to complete
AACSB: Knowledge (K), Communication (C), Ethics (E), Analytic (A), Technology (T), Diversity
(D), Reflective Thinking (RT), Not Applicable (NA)
Sample rubric for writing questions:
Note: It is generally recommended that the rubric be shared with students, so it should be
sufficiently general to not give away answers.
Notes for instructor:
Each writing question will have criteria which are specific to the question. The instructor
may want to add or delete grading criteria (rows) depending on the topic and assignment.
How each grading criterion will be assessed and the associated points for each level of
performance are found in columns 2–5.
, In the sample rubric, a total of 16 points are possible for this assignment. Each grading
criterion (row) is worth up to 4 points (column 2).
Rubric: (It is suggested that the rubric be shared with the students.)
Full points 75% of points 50% of points 25% of points
Criteria
(4 out of 4) (3 out of 4) (2 out of 4) (1 out of 4)
Thoroughness of
The question The response is The response is The response is
answer to the
is answered lacking a few lacking significant incomplete and
question
thoroughly details details limited
Amounts and
Much of the The response does
information Some of the
Answer is response is not represent
discussed are response is
realistic/relevant irrelevant, realistic or relevant
relevant and irrelevant to the
unrealistic, or understanding of
pertinent to question
overly simplistic topic
the question
Organization/clarity
Well Adequate Limited
of thought Poor organization
organized organization organization
(25% of score)
A clear
conclusion or
recommendati
Appropriate Conclusion or
on is
recommendations recommendation Conclusion or No conclusion or
presented
and conclusions are is mostly clear recommendation recommendation is
that is
reached and appropriate is incomplete provided
appropriate
(25% of score) given the content
given the
content
discussed
1.1 Describe how your financial knowledge, experience, risk
tolerance, and feelings of control influence the way you view the
financial world.
1.1 Multiple-Choice Questions
1. b. the combination of financial knowledge and skills.
Answer: b; Section: 1.1; LO: 1.1; BT: K; Diff: E; TOT: 2 min; AACSB: K
2. c. I and II only.
Answer: c; Section: 1.1; LO: 1.1; BT: C; Diff: E; TOT: 2 min; AACSB: RT
3. d. your financial knowledge, financial risk-taking, and feelings of control over your
situation.
Answer: d; Section: 1.1; LO: 1.1; BT: K; Diff: E; TOT: 2 min; AACSB: RT
,4. c. believe strongly in luck and fate
Answer: c; Section: 1.1; LO: 1.1; BT: C; Diff: E; TOT: 2 min; AACSB: RT
5. a. more knowledgeable about the financial marketplace over time and to increase his
personal wealth.
Answer: a; Section: 1.1; LO: 1.1; BT: C; Diff: E; TOT: 2 min; AACSB: RT
6. c. Having and raising a child.
Answer: c; Section: 1.1; LO: 1.1; BT: C; Diff: E; TOT: 2 min; AACSB: RT
7. a. Consumer spending.
Answer: a; Section: 1.1; LO: 1.1; BT: K; Diff: E; TOT: 2 min; AACSB: K
8. b. GDP would fall because consumers would spend less on goods and services.
Answer: b; Section: 1.1; LO: 1.1; BT: C; Diff: E; TOT: 2 min; AACSB: RT
9. a. A willingness to save money on a regular basis.
Answer: a; Section: 1.1; LO: 1.1; BT: C; Diff: E; TOT: 2 min; AACSB: RT
10. c. Michelle, who gives regularly to charity, reads about investing and is self-confident.
Answer: c; Section: 1.1; LO: 1.1; BT: C; Diff: E; TOT: 2 min; AACSB: RT
1.1. Adventures in Personal Finance
Short Answer
1. Answer: High-quality responses should include a discussion of how the wealth was
accumulated, work effort, and locus of control (chance versus work), and also include a
discussion of the student‘s perception of his or her locus of control. Please refer to the
sample writing assignment rubric in the solutions manual.
Section: 1.1; LO: 1.1; BT: C; Diff: E; TOT: 15 min; AACSB: RT, E
2. Answer: Risk tolerance describes your willingness to engage in financial activities that
have uncertain outcomes. Individuals with low risk tolerance may be fearful of the financial
markets and financial activities and avoid them. As your financial literacy increases and
risk perceptions are properly understood, your willingness to engage in risks may
increase.
Section: 1.1; LO: 1.1; BT: Ap; Diff: M; TOT: 5 min; AACSB: RT, A
3. Answer: High-quality responses should include a discussion of how savings behavior may
differ between generations. Please refer to the sample writing assignment rubric in the
solutions manual.
Section: 1.1; LO: 1.1; BT: Ap or An; Diff: M; TOT: 20 min; AACSB: RT, D
4. Answers will vary based on student experiences. The sample grading rubric found in the
solutions manual can be adapted to grade this assignment.
, Section: 1.1; LO: 1.1; BT: Ap; Diff: M; TOT: 20 min; AACSB: RT
Explore
1. Answer: GDP decreased during this time period. A recession is a decrease in GDP.
Section: 1.1; LO: 1.1; BT: An; Diff: E; TOT: 10 min; AACSB: A
2. Answer: High-quality responses should include a discussion of material that the student
found as well as the student‘s assessment of that material. Please refer to the sample
writing assignment rubric in the solutions manual.
Section: 1.1; LO: 1.1; BT: C; Diff: E; TOT: 20 min; AACSB: T
3. Answer: High-quality responses should include a discussion of how well the student
performed in the game and the student‘s assessment whether this type of learning
platform is helpful for others. Students should justify their responses. Please refer to the
sample writing assignment rubric in the solutions manual.
Section: 1.1; LO: 1.1; BT: An; Diff: M; TOT: 20 min; AACSB: C
4. Answer: The F.I.R.E. movement may appeal to individuals studying personal finance. The
notion of saving money early if life in order to exit the job market to pursue life dreams,
community service, and work-life balance is something that appeals to Millennials and
others who find working to be restrictive. There are no correct or incorrect answers to this
question. After researching the movement, students may realize that the reality of filling 30
to 50 years of daily experience outside of the job market may not be match the dream,
especially if the retirement budget is very tight. Please refer to the sample writing
assignment rubric in the solutions manual.
Section: 1.1; LO: 1.1; BT: An; Diff: M; TOT: 20 min; AACSB: C
Expanded Learning Activity
Answer: High-quality responses should discuss the results of the research and how those
results relate to financial planning. Please refer to the sample writing assignment rubric in
the solutions manual.
Section: 1.1; LO: 1.1; BT: E; Diff: H; TOT: 120 min; AACSB: C
1.1 Practice Questions
(The Practice Questions do not appear in the printed textbook. Autogradable version is available
in your Wiley course, with algorithmically changing values when applicable.)
1. Which of the following elements influence your view of the financial world?
I. Your risk tolerance.
II. How much you believe you control your financial future.
III. Knowledge about personal finance topics.
a. II only.
