1- Because of unpredictability, how you finance your life does not significantly affect the life you live.

True

False

2- The Consumer Price Index (CPI) tracks rising or falling employment levels, by tracking consumption levels.

True

False

3- Financial advisors may be working as accountants, investment advisors, tax advisors, estate planners, or insurance agents.

True

False

4- Which of the following individual situations typically leads to increased income needs, reduced risk tolerance, and greater need for future income protection?

d) Investment

a) Change of employment

b) Retirement

c) Responsibility for others

e) Accumulation of assets

5- Which life stage typically is best characterized by the following financial circumstances: no dependents, few assets, little wealth, small income needs, greater risk tolerance, focus on career development?

d) Late adulthood

e) Old Age

c) Middle adulthood

b) Early adulthood

a) Adolescence

6- In addition to gross domestic product and rates of employment and unemployment, key measures of the health of an economy include all the following EXCEPT

c) savings and loans.

e) the value of currency.

d) the Consumer Price Index.

b) housing starts and home sales.

a) orders for durable goods.

7- In financial planning, understanding your current financial situation by analyzing your assets, debts, income, and expenses most likely

d) prevents you from clinging to unrealistic goals.

e) suggests new goals.

b) reveals ways of achieving your goals.

a) helps you set personal goals.

c) lets you reach your goals sooner.

8- You finance your life and way of living through income you earn by selling your labor or capital.

True

False

9- Opportunity costs and sunk costs are hidden expenses that affect financial decision making.

True

False

10- If an asset is worth more when you resell it than when you bought it, then you have a capital gain.

True

False