FCS 340 Exam 1 Questions and Answers |
Full Test Bank with Verified Solutions |
A+ Pass Guaranteed
• why should I learn about family finance? -✓✓to bring you to Christ; to help you
become a wise steward; to accomplish your divine mission; to return with your family
back to Heavenly Father's presence
• what are the profound principles upon which this stewardship perspective is based? -
✓✓God has ownership (the right to possess or own something), not us; we have a
stewardship to use our resources for His purposes; we have agency to make choices
with our money; we have accountability and are required to give Him an account of our
stewardship over the blessings we have received
• how can i practically apply family finance in my life? -✓✓pay the Lord first in tithes, fast
offerings, and other contributions; create, use, and update a budget; minimize and
eventually eliminate debt; prepare for emergencies and build a reserve; invest early,
consistently, and wisely; protect yourself and your family through adequate insurance;
share finances as equal partners in your marriage; teach your children and family about
finances
• financial reserve -✓✓cash or other liquid assets held to cover 3-6 months of
emergency expenses
• speculation -✓✓any investment that promises a greater than market-rate return
• time value of money -✓✓how the value of money changes over time due to inflation
and interest
• inflation -✓✓decrease in the purchasing power of money
• interest -✓✓remuneration for investing or loaning money
• compound interest -✓✓interest earned on interest; the eighth wonder of the world
• compounding -✓✓the number of periods in which interest is calculated during the year,
i.e. annually, quarterly, monthly, and daily. the shorter the compounding period, the
more money from interest you will earn, and the faster your money will grow
• investment -✓✓a current commitment of your money in the expectation of reaping
future returns
, • present value (PV) -✓✓current value of money
• prinicpal -✓✓the original amount of money borrowed or invested (generally
synonymous with present value)
• interest rate (I) -✓✓the rate you will receive for investing at a specified compounding
period for a specified period of time (generally expressed in percent per year)
• nominal return -✓✓the return on an investment before the impacts of inflation and
taxes are taken into account
• after-tax return -✓✓the return on an investment after the impact of federal, state, and
local taxes has been taken into account
• real return -✓✓the rate of return on an investment after the impacts of taxes and
inflation are taken into account
• compounding periods (N) -✓✓the frequency with which interest is applied to an
investment
• payment (PMT) -✓✓a periodic amount invested or received during the life of the
investment (e.g., monthly payment, annual disbursement, dividend, etc.)
• future value (FV) -✓✓the monetary value of an investment at some point in the future
• lump sum -✓✓one payment at a specific time
• annuity -✓✓the disbursement of money on a periodic basis - a series of equal
payments which are made at a specific time
• purchasing power -✓✓the value of monetary funds based on the amount of goods or
services that one unit of money can buy
• opportunity cost -✓✓the potential loss or gain that occurs when one financial option is
chosen over another
• steps to creating your family financial plan -✓✓1. decide what you are about; 2.
evaluate your financial health; 3. define your family goals; 4. develop a plan of action; 5.
implement your plan; 6. revise your plan as necessary
• SMART principle -✓✓Family goals should be
Specific
Measurable
Attainable
Full Test Bank with Verified Solutions |
A+ Pass Guaranteed
• why should I learn about family finance? -✓✓to bring you to Christ; to help you
become a wise steward; to accomplish your divine mission; to return with your family
back to Heavenly Father's presence
• what are the profound principles upon which this stewardship perspective is based? -
✓✓God has ownership (the right to possess or own something), not us; we have a
stewardship to use our resources for His purposes; we have agency to make choices
with our money; we have accountability and are required to give Him an account of our
stewardship over the blessings we have received
• how can i practically apply family finance in my life? -✓✓pay the Lord first in tithes, fast
offerings, and other contributions; create, use, and update a budget; minimize and
eventually eliminate debt; prepare for emergencies and build a reserve; invest early,
consistently, and wisely; protect yourself and your family through adequate insurance;
share finances as equal partners in your marriage; teach your children and family about
finances
• financial reserve -✓✓cash or other liquid assets held to cover 3-6 months of
emergency expenses
• speculation -✓✓any investment that promises a greater than market-rate return
• time value of money -✓✓how the value of money changes over time due to inflation
and interest
• inflation -✓✓decrease in the purchasing power of money
• interest -✓✓remuneration for investing or loaning money
• compound interest -✓✓interest earned on interest; the eighth wonder of the world
• compounding -✓✓the number of periods in which interest is calculated during the year,
i.e. annually, quarterly, monthly, and daily. the shorter the compounding period, the
more money from interest you will earn, and the faster your money will grow
• investment -✓✓a current commitment of your money in the expectation of reaping
future returns
, • present value (PV) -✓✓current value of money
• prinicpal -✓✓the original amount of money borrowed or invested (generally
synonymous with present value)
• interest rate (I) -✓✓the rate you will receive for investing at a specified compounding
period for a specified period of time (generally expressed in percent per year)
• nominal return -✓✓the return on an investment before the impacts of inflation and
taxes are taken into account
• after-tax return -✓✓the return on an investment after the impact of federal, state, and
local taxes has been taken into account
• real return -✓✓the rate of return on an investment after the impacts of taxes and
inflation are taken into account
• compounding periods (N) -✓✓the frequency with which interest is applied to an
investment
• payment (PMT) -✓✓a periodic amount invested or received during the life of the
investment (e.g., monthly payment, annual disbursement, dividend, etc.)
• future value (FV) -✓✓the monetary value of an investment at some point in the future
• lump sum -✓✓one payment at a specific time
• annuity -✓✓the disbursement of money on a periodic basis - a series of equal
payments which are made at a specific time
• purchasing power -✓✓the value of monetary funds based on the amount of goods or
services that one unit of money can buy
• opportunity cost -✓✓the potential loss or gain that occurs when one financial option is
chosen over another
• steps to creating your family financial plan -✓✓1. decide what you are about; 2.
evaluate your financial health; 3. define your family goals; 4. develop a plan of action; 5.
implement your plan; 6. revise your plan as necessary
• SMART principle -✓✓Family goals should be
Specific
Measurable
Attainable
