Test Bank for Personal Financial Planning, 16th Edition by Randy Billingsley
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Module
Personal Financial Planning
Institution
Personal Financial Planning
Test Bank for Personal Financial Planning, 16e 16th Edition by Randy Billingsley, Lawrence J. Gitman, Michael D. Joehnk. Full Chapters test bank are included with answers (Chapter 1 to 15)
Part I: FOUNDATIONS OF FINANCIAL PLANNING.
1. Understanding the Financial Planning Process.
2. Developing...
Test Bank for Personal Financial Planning, 16th Edition by Randy Billingsley
Chapter 01 16e Billingsley Complete Chapters ✅
Indicate whether the statement is true or false. Answers Included ✅
1. For employees of large firms, managing employee benefits is an important part of financial planning.
a. True
b. False
2. Geographic factors affect your earning power.
a. True
b. False
3. 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
4. The decisions you make in career planning are independent of the decisions you make in financial planning.
a. True
b. False
5. Your purchase, saving, investment, and retirement plans and decisions are not influenced by the present state of
the economy.
a. True
b. False
6. Financial planning takes place in a dynamic economic environment created by the actions of the government,
business, and consumers.
a. True
b. False
7. Standard of living is defined as the necessities, comforts, and luxuries desired by an individual or a family.
a. True
b. False
8. Career plans should not be changed after long- and short-term career goals are set.
a. True
b. False
9. Recessions and financial crises will always result in job loss.
a. True
b. False
10. Accumulating wealth for later years is called estate planning.
a. True
b. False
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Chapter 01 16e Billingsley
11. 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
12. 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
b. False
13. Setting long- and short-term career goals helps in career planning.
a. True
b. False
14. Marital status affects the income level of individuals.
a. True
b. False
15. Retirement planning includes taking advantage of and managing employer-sponsored benefits.
a. True
b. False
16. 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
17. In the United States, salaries tend to be higher in the Northeast and West than in the South.
a. True
b. False
18. You should limit your spending to no more than 20 percent more than what you earn.
a. True
b. False
19. Most people tend to be more liberal about their expenditures during a recession or crisis.
a. True
b. False
20. The most effective way to achieve financial objectives is through personal financial planning.
a. True
b. False
21. 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
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Chapter 01 16e Billingsley
22. The average propensity to consume is commonly viewed as a key determinant of standard of living.
a. True
b. False
23. Short-term planning should include creating and maintaining an emergency fund with at least six months’ worth
of income.
a. True
b. False
24. The need for financial planning declines as your income increases.
a. True
b. False
25. The federal government delegates its regulation of economic activity function to businesses and consumers.
a. True
b. False
26. You should discuss your financial goals and attitudes toward money with your partner.
a. True
b. False
27. Financial planning can improve your standard of living.
a. True
b. False
28. Tax plans are closely tied to investment plans.
a. True
b. False
29. The longer you wait to begin retirement planning, the less you are likely to have in your retirement fund.
a. True
b. False
30. The support of philanthropic organizations is a material item that contributes to our quality of life.
a. True
b. False
31. Commission-based financial planners charge fees based on the complexity of the plan they prepare.
a. True
b. False
32. Living costs are constant throughout the country.
a. True
b. False
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Chapter 01 16e Billingsley
33. Fee-only financial planners earn commissions for the products they sell.
a. True
b. False
34. Tangible (physical) assets are earning assets that are held for the returns they promise.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
35. The three key groups in the economic environment are:
a. government, regulators, and business.
b. government, consultants, and business.
c. consumers, economists, and business.
d. consumers, business, and managers.
e. government, business, and consumers.
36. Which of the following represents the three stages of the financial planning life cycle?
a. Wealth accumulation, wealth preservation, and wealth transfer
b. Wealth accumulation, wealth preservation, and wealth depletion
c. Wealth accumulation, wealth conservation, and wealth transfer
d. Wealth acquisition, wealth transfer, and wealth depletion
e. Wealth accumulation, wealth conservation, and wealth maturation
37. Which of the following statements about Amal is true if the inflation rate is increasing every year by 1 percent
and there is no growth in Amal’s salary?
a. Amal can afford to buy more luxury items as prices go down.
b. Amal’s purchasing power will decrease.
c. Amal’s employment opportunities will increase.
d. The lack of growth in Amal’s salary will increase the average inflation rate.
e. Amal’s cost of borrowing will be reduced.
38. The last step in the financial planning process is to:
a. develop financial plans and strategies to achieve goals.
b. use financial statements to evaluate results of plans and budgets, taking corrective action as required.
c. implement financial plans and strategies.
d. redefine goals and revise plans and strategies as personal circumstances change.
e. periodically develop and implement budgets to monitor and control progress toward goals.
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