1
Test Bank For Personal Financial Planning, 16th
Edition, By J. Gitman, Michael D. Joehnk, And R
Billingsley.
Chapter 1—Understanding The Financial Planning Process
TRUE/FALSE
1. Standard Of Living Is Defined As The Necessities, Comforts, And Luxuries Desired By An Individual Or
Group.
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates
KEY: Bloom's: Knowledge
2. Your Average Propensity To Consume Is The Percentage Of Each Dollar Of Income, On The Average, That
Is Spent For Current Needs Rather Than Savings.
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates
KEY: Bloom's: Knowledge
3. A Good Financial Plan Completed When One Is In Their 30s Will Typically Last A Lifetime.
ANS: F PTS: 1 DIF: Challenging OBJ: LO: 1-2
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest
Rates KEY: Bloom's: Synthesis
4. Financial Planning Is A Continuing, Life-Long Process.
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-2
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates
KEY: Bloom's: Comprehension
5. Financial Planning Can Improve Your Standard Of Living.
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates KEY: Bloom's:
Comprehension
6. Current Consumption Is Inversely Related To Saving For The Future.
ANS: T PTS: 1 DIF: Challenging OBJ: LO: 1-1
Page 1 Of 550
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NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates KEY: Bloom's:
Analysis
7. About 20% Of Americans Say Retirement Planning Is Their Most Pressing Financial Concern.
ANS: F PTS: 1 DIF: Moderate OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates
KEY: Bloom's: Knowledge
8. The Most Effective Way To Achieve Financial Objectives Is Through Financial Planning.
ANS: T PTS: 1 DIF: Moderate OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates
KEY: Bloom's: Comprehension
9. Defining Financial Goals Is An Important First Step In Personal Financial Planning Process.
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-2
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates
KEY: Bloom's: Comprehension
10. Two Persons With Equal Average Propensities To Consume Will Not Necessarily Have Equal Standards Of
Living Because Of Differences In Income.
ANS: T PTS: 1 DIF: Challenging OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates
KEY: Bloom's: Evaluation
11. The Need For Financial Planning Declines As Your Income Increases.
ANS: F PTS: 1 DIF: Moderate OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest
Rates KEY: Bloom's: Synthesis
12. Current Consumption Effects Future Consumption.
ANS: T PTS: 1 DIF: Challenging OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest
Rates KEY: Bloom's: Analysis
13. A Person Who Has $2,000 Monthly Income And Spends $1,800 Monthly Has An Average
Propensity To Consume Of 90%.
ANS: T PTS: 1 DIF: Challenging OBJ: LO: 1-1
Page 2 Of 550
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NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates
KEY: Bloom's: Evaluation
14. A Person Making $35,000 And Spending $30,800 Has An Average Propensity To Consume Of 80%.
ANS: F PTS: 1 DIF: Challenging OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates
KEY: Bloom's: Evaluation
15. Most Families Find It Difficult To Discuss Money Matters.
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-2
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates KEY: Bloom's:
Knowledge
16. Average Propensity To Consume Refers To How Much Of Your Money You Plan To Save In Your Financial
Plan.
ANS: F PTS: 1 DIF: Challenging OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates
KEY: Bloom's: Comprehension
17. Tangible Assets Are Earning Assets That Are Held For The Returns They Promise.
ANS: F PTS: 1 DIF: Challenging OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest
Rates KEY: Bloom's: Comprehension
18. Financial Assets Are Paper Assets, Such As Savings Accounts And Securities.
ANS: T PTS: 1 DIF: Moderate OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates KEY: Bloom's:
Comprehension
19. Mutual Funds Are Examples Of Financial Assets.
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates KEY: Bloom's:
Application
20. Spending For Your Child's Private-School Education Is An Example Of Deferred Consumption.
ANS: F PTS: 1 DIF: Challenging OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates KEY: Bloom's:
Application
21. Wealth Can Be Defined As The Total Value Of All The Things You Own.
Page 3 Of 550
, 4
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates KEY: Bloom's:
Knowledge
22. Wealth Is The Key Consideration Is Establishing Financial Goals As It Is The Measure Of Value In
Financial Transactions.
ANS: F PTS: 1 DIF: Challenging OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates KEY: Bloom's:
Comprehension
23. Financial Assets Include Investments Such As Stocks And Bonds.
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest
Rates KEY: Bloom's: Analysis
24. Utility Refers To The Amount Of Satisfaction A Person Gets From Buying Certain Items.
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-2
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates
KEY: Bloom's: Knowledge
25. A Successful Financial Plan Will Be Based On A Person's Goals.
ANS: T PTS: 1 DIF: Moderate OBJ: LO: 1-2
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates
KEY: Bloom's: Knowledge
26. Your Personal Value System Will Shape Your Attitude Toward Money And Wealth Accumulation.
ANS: T PTS: 1 DIF: Moderate OBJ: LO: 1-2
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates
KEY: Bloom's: Comprehension
27. It Is Possible To Draw Up One Financial Plan That Will Work For Most People.
ANS: F PTS: 1 DIF: Moderate OBJ: LO: 1-2
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates KEY: Bloom's:
Comprehension
28. Financial Planning Is A Dynamic Process.
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-2
Page 4 Of 550
Test Bank For Personal Financial Planning, 16th
Edition, By J. Gitman, Michael D. Joehnk, And R
Billingsley.
Chapter 1—Understanding The Financial Planning Process
TRUE/FALSE
1. Standard Of Living Is Defined As The Necessities, Comforts, And Luxuries Desired By An Individual Or
Group.
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates
KEY: Bloom's: Knowledge
2. Your Average Propensity To Consume Is The Percentage Of Each Dollar Of Income, On The Average, That
Is Spent For Current Needs Rather Than Savings.
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates
KEY: Bloom's: Knowledge
3. A Good Financial Plan Completed When One Is In Their 30s Will Typically Last A Lifetime.
ANS: F PTS: 1 DIF: Challenging OBJ: LO: 1-2
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest
Rates KEY: Bloom's: Synthesis
4. Financial Planning Is A Continuing, Life-Long Process.
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-2
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates
KEY: Bloom's: Comprehension
5. Financial Planning Can Improve Your Standard Of Living.
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates KEY: Bloom's:
Comprehension
6. Current Consumption Is Inversely Related To Saving For The Future.
ANS: T PTS: 1 DIF: Challenging OBJ: LO: 1-1
Page 1 Of 550
,2
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates KEY: Bloom's:
Analysis
7. About 20% Of Americans Say Retirement Planning Is Their Most Pressing Financial Concern.
ANS: F PTS: 1 DIF: Moderate OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates
KEY: Bloom's: Knowledge
8. The Most Effective Way To Achieve Financial Objectives Is Through Financial Planning.
ANS: T PTS: 1 DIF: Moderate OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates
KEY: Bloom's: Comprehension
9. Defining Financial Goals Is An Important First Step In Personal Financial Planning Process.
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-2
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates
KEY: Bloom's: Comprehension
10. Two Persons With Equal Average Propensities To Consume Will Not Necessarily Have Equal Standards Of
Living Because Of Differences In Income.
ANS: T PTS: 1 DIF: Challenging OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates
KEY: Bloom's: Evaluation
11. The Need For Financial Planning Declines As Your Income Increases.
ANS: F PTS: 1 DIF: Moderate OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest
Rates KEY: Bloom's: Synthesis
12. Current Consumption Effects Future Consumption.
ANS: T PTS: 1 DIF: Challenging OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest
Rates KEY: Bloom's: Analysis
13. A Person Who Has $2,000 Monthly Income And Spends $1,800 Monthly Has An Average
Propensity To Consume Of 90%.
ANS: T PTS: 1 DIF: Challenging OBJ: LO: 1-1
Page 2 Of 550
, 3
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates
KEY: Bloom's: Evaluation
14. A Person Making $35,000 And Spending $30,800 Has An Average Propensity To Consume Of 80%.
ANS: F PTS: 1 DIF: Challenging OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates
KEY: Bloom's: Evaluation
15. Most Families Find It Difficult To Discuss Money Matters.
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-2
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates KEY: Bloom's:
Knowledge
16. Average Propensity To Consume Refers To How Much Of Your Money You Plan To Save In Your Financial
Plan.
ANS: F PTS: 1 DIF: Challenging OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates
KEY: Bloom's: Comprehension
17. Tangible Assets Are Earning Assets That Are Held For The Returns They Promise.
ANS: F PTS: 1 DIF: Challenging OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest
Rates KEY: Bloom's: Comprehension
18. Financial Assets Are Paper Assets, Such As Savings Accounts And Securities.
ANS: T PTS: 1 DIF: Moderate OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates KEY: Bloom's:
Comprehension
19. Mutual Funds Are Examples Of Financial Assets.
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates KEY: Bloom's:
Application
20. Spending For Your Child's Private-School Education Is An Example Of Deferred Consumption.
ANS: F PTS: 1 DIF: Challenging OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates KEY: Bloom's:
Application
21. Wealth Can Be Defined As The Total Value Of All The Things You Own.
Page 3 Of 550
, 4
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates KEY: Bloom's:
Knowledge
22. Wealth Is The Key Consideration Is Establishing Financial Goals As It Is The Measure Of Value In
Financial Transactions.
ANS: F PTS: 1 DIF: Challenging OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates KEY: Bloom's:
Comprehension
23. Financial Assets Include Investments Such As Stocks And Bonds.
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-1
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest
Rates KEY: Bloom's: Analysis
24. Utility Refers To The Amount Of Satisfaction A Person Gets From Buying Certain Items.
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-2
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates
KEY: Bloom's: Knowledge
25. A Successful Financial Plan Will Be Based On A Person's Goals.
ANS: T PTS: 1 DIF: Moderate OBJ: LO: 1-2
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates
KEY: Bloom's: Knowledge
26. Your Personal Value System Will Shape Your Attitude Toward Money And Wealth Accumulation.
ANS: T PTS: 1 DIF: Moderate OBJ: LO: 1-2
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates
KEY: Bloom's: Comprehension
27. It Is Possible To Draw Up One Financial Plan That Will Work For Most People.
ANS: F PTS: 1 DIF: Moderate OBJ: LO: 1-2
NAT: BUSPROG: Reflective Thinking STA: DISC: Financial Markets And Interest Rates KEY: Bloom's:
Comprehension
28. Financial Planning Is A Dynamic Process.
ANS: T PTS: 1 DIF: Easy OBJ: LO: 1-2
Page 4 Of 550
