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The Financial Planning Standards Council (FPSC)sets out the steps needed to earn the Certified Financial Planner (CFP)designation.

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As of 2012,Canadians were saving


A) about 3.9 percent of income received.
B) about 17 percent of income received.
C) about 3.3 percent of income received.
D) about 33 percent of income received.

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Which of the following is a decision that you would make during estate planning?


A) How you will minimize taxation and probate
B) How much money you should allocate to retirement plans
C) How your wealth will be distributed before and after your death
D) How to enhance your net worth

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Which of the following would be classified as a medium-term goal?


A) Saving a down payment to purchasing a house in three years
B) Buying new clothes to begin school this month
C) Retiring in 10 years
D) Paying for your two-year-old child's college education

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Your net worth will be increased by which of the following actions?


A) Changing your savings from 15 percent to 10 percent of your earnings
B) Investing a $500 birthday present from your grandmother
C) Buying a new stereo system and putting the entire amount on your credit card
D) Purchasing a lottery ticket

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Regarding cash flow,which of the following is not correct?


A) Insurance payments are a cash outflow.
B) Investing in stock is a cash outflow.
C) Buying items on sale is a cash inflow.
D) Salary is a cash inflow.

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Write out three goals in SMART format.

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There are many possibilities,however,the...

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Your financial plan should include a plan for protecting your assets and income through insurance coverage.

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Alayne is preparing her budget for the first time.At what stage of the financial planning process is she?


A) Establishing financial goals
B) Managing her financial resources
C) Budgeting and tax planning
D) Considering her current financial situation

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Planning to pay off a car loan in three years' time is classified as


A) investment planning.
B) increasing cash flow.
C) a medium-term goal.
D) a short-term goal.

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Sharon had a net worth at the beginning of the year of $22 000 and she saved $1000,earning 3 percent for one year.During the year she saved $50 each week from her pay cheque in a no-interest chequing account.How much is her net worth at the end of the year?


A) $25 000
B) $25 630
C) $25 600
D) $23 030

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If prepared properly,financial plans are set for life and will only need minor adjustments each year.

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Credit should be used only when necessary,since it involves borrowed funds that you will need to pay back with interest.

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Death and disability are examples of controllable events in financial planning.

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Using a credit card to cover an unexpected expense is an example of using an emergency fund.

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The savings for a short-term goal will usually earn more interest than long-term investments such as in a retirement plan.

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As long as you stay within your budget of spending $100 per month on eating out,there is no opportunity cost.

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Retirement planning should take place


A) when you retire.
B) shortly before you retire.
C) well before you retire.
D) the day you start your first job.

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A good example of a personal financial goal would be planning to purchase a home one day.

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Alan has been thinking about his future and is figuring out what his biggest priorities are.At what stage of the planning process is he?


A) Selecting and implementing the best plan
B) Determining financial goals
C) Assessing his current financial position
D) Identifying alternative plans to meet goals

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