18. Knowing how to prepare and interpret personal financial statements is a cornerstone of personal financial planning.

	a.	True
	b.	False

19. Setting long- and short-term career goals helps in career planning.

	a.	True
	b.	False

20. A cash budget has value only if you use it, and you keep careful records of actual income and expenses.

	a.	True
	b.	False

21. The property listing in a local Multiple Listing Service (MLS) cannot be accessed by all buyers and sellers.

	a.	True
	b.	False

22. A retail charge card can be accessed by writing checks against demand deposit.

	a.	True
	b.	False

23. Low interest rates create economic distortions, especially when real, inflation-adjusted interest rates are positive.

	a.	True
	b.	False

24. It is very easy to change your partners financial style, so there is no need for financial planning to resolve conflicts regarding money matters.

	a.	True
	b.	False

25. Fee-only financial planners charge commission for the products they sell.

	a.	True
	b.	False

Indicate the answer choice that best completes the statement or answers the question.

26. The real rate of return is also referred to as the real:

	a.	liability rate.
	b.	short-term rate.
	c.	estimated rate.
	d.	inflation rate.
	e.	interest rate.

27. Becky graduated with a masters degree in personal financial planning. After working for 2 years in a small financial planning firm, Becky earns $85,000 annually and saves $5,000 a year after spending on her current needs. What is her average propensity to consume?

	a.	5 percent
	b.	25 percent
	c.	60 percent
	d.	88 percent
	e.	94 percent

28. Murray (age 68, single) sold his home owned for 35 years so that he could relocate to a place that is closer to where his grandchildren live. He realized a $400,000 capital gain on the home. Murrays tax liability on the capital gain is computed on:

	a.	$400,000.
	b.	$300,000.
	c.	$250,000.
	d.	$150,000.
	e.	$0.

29. Low interest rates result in:

	a.	facilitating a greater supply of money for borrowers.
	b.	reducing the cost of financing the federal budget deficit.
	c.	encouraging a higher savings rate.
	d.	bringing more investment avenues.
	e.	improving the standard of living.

30. Career planning:

	a.	does not require any goal setting.
	b.	is not related to personal financial planning.
	c.	does not influence an individuals lifetime earnings.
	d.	impacts an employers stability.
	e.	helps in improving professional satisfaction.