PFIN, 8th Edition – Personal Finance Study Notes and Test Bank

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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.
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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




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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


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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




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