LPF – Course UPDATED Actual Exam
Questions and CORRECT Answers
Which of the following is not one of the five basic steps in personal financial planning? -
CORRECT ANSWER✔✔- Let an accountant review your plan
(T or F) A well educated and trained employee is virtually guaranteed job security in today's
corporations. Therefore he or she doesn't need to worry about keeping his or her skills
updated and current - CORRECT ANSWER✔✔- False
(T or F) Proper financial planning can help you use your current income to achieve your long
term financial goals - CORRECT ANSWER✔✔- True
(T or F) When comparing two different investment opportunities the investor should always
choose the investment that minimizes the total amount of taxes paid - CORRECT
ANSWER✔✔- False
Suppose you are a 20-year-old college student. What stage of the financial life cycle are you
currently in? - CORRECT ANSWER✔✔- Stage 1: wealth accumulation
Being financially secure involves balancing what you earn with - CORRECT ANSWER✔✔-
What you spend
Which of the following statement applies to obtaining an undergraduate college degree? -
CORRECT ANSWER✔✔- It may be the single best investment you will ever make
Suppose that you just completed your first year of college with $11,000 in loans and plan to
borrow the maximum each year from now until graduation. You have never accounted for the
way you spend your money, do not have a budget, and want to insure that you will be able to
repay your loans after college. What is the most important thing you can do right now? -
CORRECT ANSWER✔✔- Immediately begin to develop a personal financial plan
When you are involved in _____ planning, you are planning for your eventual death and the
distribution of your wealth to your heirs - CORRECT ANSWER✔✔- Estate
, (T or F) A financial plan is only concerned with your future earnings and expenses. An
examination of your current financial situation is not so important - CORRECT
ANSWER✔✔- False
Fair market value refers to - CORRECT ANSWER✔✔- What an asset could be sold for
today
Liabilities are best described as - CORRECT ANSWER✔✔- Financial debts and obligations
that you owe
An expenditure over which you have no control and are obligated to make is a - CORRECT
ANSWER✔✔- Fixed expenditure
Assets that you purchase for the purpose of accumulating wealth to satisfy your financial
goals are called - CORRECT ANSWER✔✔- Investment assets
Which financial planning document should you use to measure your current financial
position? - CORRECT ANSWER✔✔- Balance sheet
One of the following items would NOT go on a balance sheet. Which one is it? - CORRECT
ANSWER✔✔- Mortgage payment paid
Your net worth, or your general level of financial worth, is found by - CORRECT
ANSWER✔✔- Subtracting your liabilities from your assets
A physical asset, such as furniture or a car, is called a(n) - CORRECT ANSWER✔✔-
Tangible asset
Which type of expenditure would probably be the hardest for an individual to track? -
CORRECT ANSWER✔✔- Cash
You know you are insolvent when - CORRECT ANSWER✔✔- Both B and C:
Questions and CORRECT Answers
Which of the following is not one of the five basic steps in personal financial planning? -
CORRECT ANSWER✔✔- Let an accountant review your plan
(T or F) A well educated and trained employee is virtually guaranteed job security in today's
corporations. Therefore he or she doesn't need to worry about keeping his or her skills
updated and current - CORRECT ANSWER✔✔- False
(T or F) Proper financial planning can help you use your current income to achieve your long
term financial goals - CORRECT ANSWER✔✔- True
(T or F) When comparing two different investment opportunities the investor should always
choose the investment that minimizes the total amount of taxes paid - CORRECT
ANSWER✔✔- False
Suppose you are a 20-year-old college student. What stage of the financial life cycle are you
currently in? - CORRECT ANSWER✔✔- Stage 1: wealth accumulation
Being financially secure involves balancing what you earn with - CORRECT ANSWER✔✔-
What you spend
Which of the following statement applies to obtaining an undergraduate college degree? -
CORRECT ANSWER✔✔- It may be the single best investment you will ever make
Suppose that you just completed your first year of college with $11,000 in loans and plan to
borrow the maximum each year from now until graduation. You have never accounted for the
way you spend your money, do not have a budget, and want to insure that you will be able to
repay your loans after college. What is the most important thing you can do right now? -
CORRECT ANSWER✔✔- Immediately begin to develop a personal financial plan
When you are involved in _____ planning, you are planning for your eventual death and the
distribution of your wealth to your heirs - CORRECT ANSWER✔✔- Estate
, (T or F) A financial plan is only concerned with your future earnings and expenses. An
examination of your current financial situation is not so important - CORRECT
ANSWER✔✔- False
Fair market value refers to - CORRECT ANSWER✔✔- What an asset could be sold for
today
Liabilities are best described as - CORRECT ANSWER✔✔- Financial debts and obligations
that you owe
An expenditure over which you have no control and are obligated to make is a - CORRECT
ANSWER✔✔- Fixed expenditure
Assets that you purchase for the purpose of accumulating wealth to satisfy your financial
goals are called - CORRECT ANSWER✔✔- Investment assets
Which financial planning document should you use to measure your current financial
position? - CORRECT ANSWER✔✔- Balance sheet
One of the following items would NOT go on a balance sheet. Which one is it? - CORRECT
ANSWER✔✔- Mortgage payment paid
Your net worth, or your general level of financial worth, is found by - CORRECT
ANSWER✔✔- Subtracting your liabilities from your assets
A physical asset, such as furniture or a car, is called a(n) - CORRECT ANSWER✔✔-
Tangible asset
Which type of expenditure would probably be the hardest for an individual to track? -
CORRECT ANSWER✔✔- Cash
You know you are insolvent when - CORRECT ANSWER✔✔- Both B and C:
