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Personal Financial Planning 14th Edition By Randy Billingsley – Test Bank

1. Investing is considered a short-term activity that involves the buying and selling of securities.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: PFIN.BILL.17.11-1 – LO: 11-1
NATIONAL STANDARDS: United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills
STATE STANDARDS: United States – AK – DISC: Investments
United States – KS – DISC: Investments
KEYWORDS: Bloom’s: Understanding

2. Investing and speculating are two entirely different activities.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: PFIN.BILL.17.11-1 – LO: 11-1
NATIONAL STANDARDS: United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills
STATE STANDARDS: United States – KS – DISC: Investments
United States – AK – DISC: Investments
KEYWORDS: Bloom’s: Understanding

3. Mutual funds provide professional management and diversification that individual investors – especially those with limited resources – can rarely obtain on their own.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: PFIN.BILL.17.11-1 – LO: 11-1
NATIONAL STANDARDS: United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills
STATE STANDARDS: United States – AK – DISC: Investments
United States – KS – DISC: Investments
KEYWORDS: Bloom’s: Understanding

4. A systematic investment routine involves investing similar sums in regular intervals.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: PFIN.BILL.17.11-1 – LO: 11-1
NATIONAL STANDARDS: United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills
STATE STANDARDS: United States – KS – DISC: Investments
United States – AK – DISC: Investments
KEYWORDS: Bloom’s: Remembering

5. When completed, an investment plan is a way of translating an abstract investment target into a specific investment program.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: PFIN.BILL.17.11-1 – LO: 11-1
NATIONAL STANDARDS: United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills
STATE STANDARDS: United States – AK – DISC: Investments
United States – KS – DISC: Investments
KEYWORDS: Bloom’s: Understanding

6. The term “investment’ refers to money placed in some medium where value and level of return are totally unpredictable.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: PFIN.BILL.17.11-1 – LO: 11-1
NATIONAL STANDARDS: United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills
STATE STANDARDS: United States – KS – DISC: Investments
United States – AK – DISC: Investments
KEYWORDS: Bloom’s: Understanding

7. Once you meet the conditions of ample insurance and liquidity, you’re ready to start investing.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: PFIN.BILL.17.11-1 – LO: 11-1
NATIONAL STANDARDS: United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills
STATE STANDARDS: United States – AK – DISC: Investments
United States – KS – DISC: Investments
KEYWORDS: Bloom’s: Remembering

8. A statement specifying how investment capital will be invested in order to reach targeted goals is called a marketing plan.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: PFIN.BILL.17.11-1 – LO: 11-1
NATIONAL STANDARDS: United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills
STATE STANDARDS: United States – KS – DISC: Investments
United States – AK – DISC: Investments
KEYWORDS: Bloom’s: Remembering

9. Your goals tend to set the tone for your investment program, and they play a major role in determining how conservative or aggressive you’re likely to be in making investment decisions.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: PFIN.BILL.17.11-1 – LO: 11-1
NATIONAL STANDARDS: United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills
STATE STANDARDS: United States – AK – DISC: Investments
United States – KS – DISC: Investments
KEYWORDS: Bloom’s: Understanding

10. The major reason most people invest is to shelter current income from taxes.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: PFIN.BILL.17.11-1 – LO: 11-1
NATIONAL STANDARDS: United States – BUSPROG: Analytic skills – BUSPROG: Analytical skills
STATE STANDARDS: United States – KS – DISC: Investments
United States – AK – DISC: Investments
KEYWORDS: Bloom’s: Remembering