MCS 2100 EXAM REVIEW QUESTIONS WITH
ACCURATE ANSWERS A+ GRADED
annuity - ANSWER payment received every year
adult life cycle - ANSWER the stages in the family situation and financial needs of
an adult
Bankruptcy - ANSWER A legal process to get out of debt when you can no longer
make all your required payments
Compounding - ANSWER the process of accumulating interest on an investment
over time to earn more interest
financial plan - ANSWER A set of goals for spending, saving, and investing the
money you receive.
Future Value (FV) - ANSWER FV = PV(1+i)^n
n = number of time periods
i = interest rate
Future Value (FV) - more than once a year - ANSWER FV = PV(1+i/m)^nm
m = number of compounding periods per year
future value of an annuity - ANSWER FV = [ (1+i)^n -1 / i ]
Inflation - ANSWER A general and progressive increase in prices
Life Cycle Approach - ANSWER our financial goals/risk expsoure change as we
go through different stages of life
Liquidity - ANSWER the ease with which an asset can be converted into the
economy's medium of exchange
opportunity cost - ANSWER the loss of potential gain from other alternatives
when one alternative is chosen.
personal financial planning - ANSWER Personal financial planning involves the
following process:
(1) determine your current financial situation;
(2) develop financial goals; (3) identify alternative courses of action;
,(4) evaluate alternatives; (5) create and
implement a financial action plan; and
(6) re-evaluate and revise the financial plan.
Present Value (PV) - ANSWER PV = FV / (1 + I)^n
Present Value of an annuity - ANSWER PV = [ 1-[1/(1+i)^n] / i]
simple interest - ANSWER I = P x R x T
P = amount in savings
R = annual interest rate
T = time period
time value of money - ANSWER the principle that a dollar received today is worth
more than a dollar received in the future
Assets - ANSWER property owned by a person or company, regarded as having
value and available to meet debts, commitments, or legacies.
budget - ANSWER an estimate of income and expenditure for a set period of
time.
budget deficit - ANSWER spending more money than your income
budget surplus - ANSWER income exceeds expenditures
cash flow - ANSWER the total amount of money being transferred into and out of
a business, especially as affecting liquidity.
Cash Flow Statement - ANSWER A summary that shows total income and
spending for a given time period
Current Liabilities - ANSWER liabilities due within a short time, usually within a
year
discretionary income - ANSWER Disposable income available for spending and
saving after an individual has purchased the basic necessities of food, clothing,
and shelter
income - ANSWER money received, especially on a regular basis, for work or
through investments.
insolvency - ANSWER the inability to pay debts when they are due
Liabilities - ANSWER Amounts owed to creditors
, liquid assets - ANSWER cash and items that can be quickly converted to cash
long-term liabilities - ANSWER liabilities owed for more than a year
money management - ANSWER Day-to-day
financial activities necessary to
manage current personal economic
resources while working
toward long-term financial
security.
net worth - ANSWER total assets minus total liabilities
personal balance sheet - ANSWER A
financial statement that reports
what an individual or a family
owns and owes; also called a net
worth statement.
safety deposit box - ANSWER a box at a financial institution where a customer
can store documents, jewelry, or other valuables
take-home pay - ANSWER Money received after all adjustments and deductions
are made.
average tax rate - ANSWER total tax due divided by total income
deductions - ANSWER Expenses that can be
deducted from total income, such
as child care expenses, union
dues, disability support payments,
investment counselling
fees, and certain employment related
expenses.
Employment Income - ANSWER Remuneration
received for personal effort.
excise tax - ANSWER a tax on the production or sale of a good
investment income - ANSWER Income from
property, including income in the
form of interest, dividends, and
rents net of expenses.
ACCURATE ANSWERS A+ GRADED
annuity - ANSWER payment received every year
adult life cycle - ANSWER the stages in the family situation and financial needs of
an adult
Bankruptcy - ANSWER A legal process to get out of debt when you can no longer
make all your required payments
Compounding - ANSWER the process of accumulating interest on an investment
over time to earn more interest
financial plan - ANSWER A set of goals for spending, saving, and investing the
money you receive.
Future Value (FV) - ANSWER FV = PV(1+i)^n
n = number of time periods
i = interest rate
Future Value (FV) - more than once a year - ANSWER FV = PV(1+i/m)^nm
m = number of compounding periods per year
future value of an annuity - ANSWER FV = [ (1+i)^n -1 / i ]
Inflation - ANSWER A general and progressive increase in prices
Life Cycle Approach - ANSWER our financial goals/risk expsoure change as we
go through different stages of life
Liquidity - ANSWER the ease with which an asset can be converted into the
economy's medium of exchange
opportunity cost - ANSWER the loss of potential gain from other alternatives
when one alternative is chosen.
personal financial planning - ANSWER Personal financial planning involves the
following process:
(1) determine your current financial situation;
(2) develop financial goals; (3) identify alternative courses of action;
,(4) evaluate alternatives; (5) create and
implement a financial action plan; and
(6) re-evaluate and revise the financial plan.
Present Value (PV) - ANSWER PV = FV / (1 + I)^n
Present Value of an annuity - ANSWER PV = [ 1-[1/(1+i)^n] / i]
simple interest - ANSWER I = P x R x T
P = amount in savings
R = annual interest rate
T = time period
time value of money - ANSWER the principle that a dollar received today is worth
more than a dollar received in the future
Assets - ANSWER property owned by a person or company, regarded as having
value and available to meet debts, commitments, or legacies.
budget - ANSWER an estimate of income and expenditure for a set period of
time.
budget deficit - ANSWER spending more money than your income
budget surplus - ANSWER income exceeds expenditures
cash flow - ANSWER the total amount of money being transferred into and out of
a business, especially as affecting liquidity.
Cash Flow Statement - ANSWER A summary that shows total income and
spending for a given time period
Current Liabilities - ANSWER liabilities due within a short time, usually within a
year
discretionary income - ANSWER Disposable income available for spending and
saving after an individual has purchased the basic necessities of food, clothing,
and shelter
income - ANSWER money received, especially on a regular basis, for work or
through investments.
insolvency - ANSWER the inability to pay debts when they are due
Liabilities - ANSWER Amounts owed to creditors
, liquid assets - ANSWER cash and items that can be quickly converted to cash
long-term liabilities - ANSWER liabilities owed for more than a year
money management - ANSWER Day-to-day
financial activities necessary to
manage current personal economic
resources while working
toward long-term financial
security.
net worth - ANSWER total assets minus total liabilities
personal balance sheet - ANSWER A
financial statement that reports
what an individual or a family
owns and owes; also called a net
worth statement.
safety deposit box - ANSWER a box at a financial institution where a customer
can store documents, jewelry, or other valuables
take-home pay - ANSWER Money received after all adjustments and deductions
are made.
average tax rate - ANSWER total tax due divided by total income
deductions - ANSWER Expenses that can be
deducted from total income, such
as child care expenses, union
dues, disability support payments,
investment counselling
fees, and certain employment related
expenses.
Employment Income - ANSWER Remuneration
received for personal effort.
excise tax - ANSWER a tax on the production or sale of a good
investment income - ANSWER Income from
property, including income in the
form of interest, dividends, and
rents net of expenses.
