Page 1 of 263 Test bank for pfin 8th edition by randall billingsley lawrence gitman michael joehnk 2026/02/04
Name: Class: Date:
TEST BANK FOR
PFIN 8th Edition by Randall Billingsley, Lawrence Gitman, Michael Joehnk
Chapter 1-15 Answers are at the end of Each Chapter
chapter 1
Indicate whether the statement is true or false.
1. Saving $400 for a large, flat-screen TV within the next four months is an example of a short-term goal.
a. True
b. False
2. Commission-based financial planners charge fees based on the complexity of the plan they prepare.
a. True
b. False
3. In the United States, salaries tend to be higher in the Northeast and West than in the South.
a. True
b. False
4. Setting long- and short-term career goals helps in career planning.
a. True
b. False
5. Financial planning takes place in a dynamic economic environment created by the actions of the government, business,
and consumers.
a. True
b. False
6. You should discuss your financial goals and attitudes toward money with your partner.
a. True
b. False
7. Accumulating wealth for later years is called estate planning.
a. True
b. False
8. It is easy to change your partner’s financial style, so there is no need for financial planning to resolve conflicts
regarding money matters.
a. True
Copyright Cengage Learning. Powered by Cognero. Page 1
Test bank for pfin 8th edition by randall
Testbillingsley
bank for lawrence
pfin 8th edition
gitmanbymichael
randalljoehnk
billingsley lawrence gitman michael joehnk 2/4/2026
,Page 2 of 263 Test bank for pfin 8th edition by randall billingsley lawrence gitman michael joehnk 2026/02/04
Name: Class: Date:
b. False
9. Tax plans are closely tied to investment plans.
a. True
b. False
10. Recessions and financial crises will always result in job loss.
a. True
b. False
11. The longer you wait to begin retirement planning, the less you are likely to have in your retirement fund.
a. True
b. False
12. Career plans should not be changed after long- and short-term career goals are set.
a. True
b. False
13. You should limit your spending to no more than 20 percent more than what you earn.
a. True
b. False
14. Morgan has an annual income of $45,000 and spends $30,000 for current needs. Morgan’s average propensity to
consume is 80 percent.
a. True
b. False
15. The most effective way to achieve financial objectives is through personal financial planning.
a. True
b. False
16. Tangible (physical) assets are earning assets that are held for the returns they promise.
a. True
b. False
17. Two people with significantly different incomes can have equal average propensities to consume because of
differences in their standard of living.
a. True
b. False
18. The need for financial planning declines as your income increases.
a. True
b. False
Copyright Cengage Learning. Powered by Cognero. Page 2
Test bank for pfin 8th edition by randall
Testbillingsley
bank for lawrence
pfin 8th edition
gitmanbymichael
randalljoehnk
billingsley lawrence gitman michael joehnk 2/4/2026
,Page 3 of 263 Test bank for pfin 8th edition by randall billingsley lawrence gitman michael joehnk 2026/02/04
Name: Class: Date:
19. Retirement planning includes taking advantage of and managing employer-sponsored benefits.
a. True
b. False
20. Geographic factors affect your earning power.
a. True
b. False
21. Fee-only financial planners earn commissions for the products they sell.
a. True
b. False
22. Marital status affects the income level of individuals.
a. True
b. False
23. Your purchase, saving, investment, and retirement plans and decisions are not influenced by the present state of the
economy.
a. True
b. False
24. For employees of large firms, managing employee benefits is an important part of financial planning.
a. True
b. False
25. Short-term planning should include creating and maintaining an emergency fund with at least six months’ worth of
income.
a. True
b. False
26. The federal government delegates its regulation of economic activity function to businesses and consumers.
a. True
b. False
27. The support of philanthropic organizations is a material item that contributes to our quality of life.
a. True
b. False
28. The average propensity to consume is commonly viewed as a key determinant of standard of living.
a. True
b. False
Copyright Cengage Learning. Powered by Cognero. Page 3
Test bank for pfin 8th edition by randall
Testbillingsley
bank for lawrence
pfin 8th edition
gitmanbymichael
randalljoehnk
billingsley lawrence gitman michael joehnk 2/4/2026
, Page 4 of 263 Test bank for pfin 8th edition by randall billingsley lawrence gitman michael joehnk 2026/02/04
Name: Class: Date:
29. Financial planning can improve your standard of living.
a. True
b. False
30. When you get your first job, you should make a good financial plan that you can follow without making changes until
you retire.
a. True
b. False
31. Living costs are constant throughout the country.
a. True
b. False
32. Standard of living is defined as the necessities, comforts, and luxuries desired by an individual or a family.
a. True
b. False
33. The decisions you make in career planning are independent of the decisions you make in financial planning.
a. True
b. False
34. Most people tend to be more liberal about their expenditures during a recession or crisis.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
35. Tax planning is most common among individuals with:
a. low incomes.
b. high incomes.
c. no incomes.
d. erratic incomes.
e. decreasing incomes.
36. Which of the following would NOT be considered an asset?
a. Savings account
b. Land
c. Credit card balance
d. Jewelry
e. Money market funds
37. When applying for a job within a large nationwide company, you notice that salaries for the same position differ based
on geographic region. In which of the following regions would you most likely receive the highest salary?
Copyright Cengage Learning. Powered by Cognero. Page 4
Test bank for pfin 8th edition by randall
Testbillingsley
bank for lawrence
pfin 8th edition
gitmanbymichael
randalljoehnk
billingsley lawrence gitman michael joehnk 2/4/2026
Name: Class: Date:
TEST BANK FOR
PFIN 8th Edition by Randall Billingsley, Lawrence Gitman, Michael Joehnk
Chapter 1-15 Answers are at the end of Each Chapter
chapter 1
Indicate whether the statement is true or false.
1. Saving $400 for a large, flat-screen TV within the next four months is an example of a short-term goal.
a. True
b. False
2. Commission-based financial planners charge fees based on the complexity of the plan they prepare.
a. True
b. False
3. In the United States, salaries tend to be higher in the Northeast and West than in the South.
a. True
b. False
4. Setting long- and short-term career goals helps in career planning.
a. True
b. False
5. Financial planning takes place in a dynamic economic environment created by the actions of the government, business,
and consumers.
a. True
b. False
6. You should discuss your financial goals and attitudes toward money with your partner.
a. True
b. False
7. Accumulating wealth for later years is called estate planning.
a. True
b. False
8. It is easy to change your partner’s financial style, so there is no need for financial planning to resolve conflicts
regarding money matters.
a. True
Copyright Cengage Learning. Powered by Cognero. Page 1
Test bank for pfin 8th edition by randall
Testbillingsley
bank for lawrence
pfin 8th edition
gitmanbymichael
randalljoehnk
billingsley lawrence gitman michael joehnk 2/4/2026
,Page 2 of 263 Test bank for pfin 8th edition by randall billingsley lawrence gitman michael joehnk 2026/02/04
Name: Class: Date:
b. False
9. Tax plans are closely tied to investment plans.
a. True
b. False
10. Recessions and financial crises will always result in job loss.
a. True
b. False
11. The longer you wait to begin retirement planning, the less you are likely to have in your retirement fund.
a. True
b. False
12. Career plans should not be changed after long- and short-term career goals are set.
a. True
b. False
13. You should limit your spending to no more than 20 percent more than what you earn.
a. True
b. False
14. Morgan has an annual income of $45,000 and spends $30,000 for current needs. Morgan’s average propensity to
consume is 80 percent.
a. True
b. False
15. The most effective way to achieve financial objectives is through personal financial planning.
a. True
b. False
16. Tangible (physical) assets are earning assets that are held for the returns they promise.
a. True
b. False
17. Two people with significantly different incomes can have equal average propensities to consume because of
differences in their standard of living.
a. True
b. False
18. The need for financial planning declines as your income increases.
a. True
b. False
Copyright Cengage Learning. Powered by Cognero. Page 2
Test bank for pfin 8th edition by randall
Testbillingsley
bank for lawrence
pfin 8th edition
gitmanbymichael
randalljoehnk
billingsley lawrence gitman michael joehnk 2/4/2026
,Page 3 of 263 Test bank for pfin 8th edition by randall billingsley lawrence gitman michael joehnk 2026/02/04
Name: Class: Date:
19. Retirement planning includes taking advantage of and managing employer-sponsored benefits.
a. True
b. False
20. Geographic factors affect your earning power.
a. True
b. False
21. Fee-only financial planners earn commissions for the products they sell.
a. True
b. False
22. Marital status affects the income level of individuals.
a. True
b. False
23. Your purchase, saving, investment, and retirement plans and decisions are not influenced by the present state of the
economy.
a. True
b. False
24. For employees of large firms, managing employee benefits is an important part of financial planning.
a. True
b. False
25. Short-term planning should include creating and maintaining an emergency fund with at least six months’ worth of
income.
a. True
b. False
26. The federal government delegates its regulation of economic activity function to businesses and consumers.
a. True
b. False
27. The support of philanthropic organizations is a material item that contributes to our quality of life.
a. True
b. False
28. The average propensity to consume is commonly viewed as a key determinant of standard of living.
a. True
b. False
Copyright Cengage Learning. Powered by Cognero. Page 3
Test bank for pfin 8th edition by randall
Testbillingsley
bank for lawrence
pfin 8th edition
gitmanbymichael
randalljoehnk
billingsley lawrence gitman michael joehnk 2/4/2026
, Page 4 of 263 Test bank for pfin 8th edition by randall billingsley lawrence gitman michael joehnk 2026/02/04
Name: Class: Date:
29. Financial planning can improve your standard of living.
a. True
b. False
30. When you get your first job, you should make a good financial plan that you can follow without making changes until
you retire.
a. True
b. False
31. Living costs are constant throughout the country.
a. True
b. False
32. Standard of living is defined as the necessities, comforts, and luxuries desired by an individual or a family.
a. True
b. False
33. The decisions you make in career planning are independent of the decisions you make in financial planning.
a. True
b. False
34. Most people tend to be more liberal about their expenditures during a recession or crisis.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
35. Tax planning is most common among individuals with:
a. low incomes.
b. high incomes.
c. no incomes.
d. erratic incomes.
e. decreasing incomes.
36. Which of the following would NOT be considered an asset?
a. Savings account
b. Land
c. Credit card balance
d. Jewelry
e. Money market funds
37. When applying for a job within a large nationwide company, you notice that salaries for the same position differ based
on geographic region. In which of the following regions would you most likely receive the highest salary?
Copyright Cengage Learning. Powered by Cognero. Page 4
Test bank for pfin 8th edition by randall
Testbillingsley
bank for lawrence
pfin 8th edition
gitmanbymichael
randalljoehnk
billingsley lawrence gitman michael joehnk 2/4/2026
