Question 1

Explain the net worth planning strategy.

Accepted Answer

Net worth planning involves the calculat...

Question 2

What are the major sources of consumer credit existing in the marketplace? Which is the best source of credit?

Accepted Answer

There are several sources of credit avai...

Question 3

Is there a way to determine how much debt one can afford?

Accepted Answer

Consumer credit is a powerful financial ...

Question 4

The equation to determine the equivalent fully-taxable yield, ignoring state and local taxes, is:

Accepted Answer

A)   Tax exempt yield / 1 - average federal tax rate
B)   Tax exempt yield / 1 - marginal federal tax rate
C)   Tax exempt yield / 1 + average federal tax rate
D)   Tax exempt yield / 1 + marginal federal tax rate
E)   None of the aboveF) B) and C)
G) C) and E)

Question 5

David Lent informs you that his financial situation is sound. And yet, his cash flow statement shows a significant deficit. How do you handle this discrepancy?

Accepted Answer

It is possible that David has neglected ...

Question 6

As a rule of thumb, consumer debt as a fixed percentage of monthly income based on experiences of financial planners is:

Accepted Answer

A)   No more than 5% to 10%
B)   Between 10% and 15%
C)   No more than 5%
D)   Between 10% and 20%
E)   None of the aboveF) D) and E)
G) None of the above

Question 7

Which of the following types of investments are not insured by FDIC?

Accepted Answer

A)   Passbook savings
B)   Certificates of deposit
C)   Checking accounts
D)   Money market mutual funds
E)   None of the above are insuredF) B) and E)
G) A) and B)

Question 8

Which of the following types of sales credit does not offer the potential of no-finance charge?

Accepted Answer

A)   Thirty-day, or regular charge accounts
B)   Revolving and optimal charge accounts
C)   Installment purchases or time payment plans
D)   All of the above offer potential of no finance charge
E)   None of the above offer potential of no finance chargeF) B) and D)
G) None of the above

Question 9

Elaborate on the following statement: "In our credit-conscious society it is extremely important to protect your credit history."

Accepted Answer

The statement is absolutely True. Denial...

Question 10

What are the tax rules regarding the deductibility of interest cost?

Accepted Answer

The True cost of credit is arrived at by...

Question 11

Which of the following is not a major factor in determining where money should be put to work?

Accepted Answer

A)   Safety
B)   Liquidity
C)   Return on savings
D)   Simplicity/minimum balance requirements
E)   All are relevant factorsF) All of the above
G) A) and C)

Question 12

David Israeli wants to buy a new car. He can get the loan from the auto dealer, his credit union, or a savings and loan association. Alternately, he can buy the car with cash. What should he do?

Accepted Answer

Paying cash for a car is desirable to sa...

Question 13

Explain in detail the essential features of cash management planning.

Accepted Answer

The net worth statement determines the v...

Question 14

If available savings fall short of the amount required to meet the desired goals, what drastic steps can be taken to correct the situation?

Accepted Answer

If savings are inadequate to meet the de...

Question 15

If the number of payments and loan duration are the same, which type of interest calculation method would have an effective interest rate higher than the nominal rate?

Accepted Answer

A)   Add-on
B)   Simple interest
C)   Bank discount
D)   Compound interest
E)   Both A and CF) A) and E)
G) B) and D)

Exam 6: Cash Management, Savings, Credit, and Debt Planning

David Lent informs you that his financial situation is sound. And yet, his cash flow statement shows a significant deficit. How do you handle this discrepancy?

Correct Answer
verified
It is possible that David has neglected ...
View Answer

Which of the following types of sales credit does not offer the potential of no-finance charge?

Correct Answer
verified

Is there a way to determine how much debt one can afford?

Correct Answer
verified
Consumer credit is a powerful financial ...
View Answer

Explain the net worth planning strategy.

Correct Answer
verified
Net worth planning involves the calculat...
View Answer

The equation to determine the equivalent fully-taxable yield, ignoring state and local taxes, is:

Correct Answer
verified

Elaborate on the following statement: "In our credit-conscious society it is extremely important to protect your credit history."

Correct Answer
verified
The statement is absolutely True. Denial...
View Answer

If available savings fall short of the amount required to meet the desired goals, what drastic steps can be taken to correct the situation?

Correct Answer
verified
If savings are inadequate to meet the de...
View Answer

What are the tax rules regarding the deductibility of interest cost?

Correct Answer
verified
The True cost of credit is arrived at by...
View Answer

Explain in detail the essential features of cash management planning.

Correct Answer
verified
The net worth statement determines the v...
View Answer

If the number of payments and loan duration are the same, which type of interest calculation method would have an effective interest rate higher than the nominal rate?

Correct Answer
verified

David Israeli wants to buy a new car. He can get the loan from the auto dealer, his credit union, or a savings and loan association. Alternately, he can buy the car with cash. What should he do?

Correct Answer
verified
Paying cash for a car is desirable to sa...
View Answer

Which of the following types of investments are not insured by FDIC?

Correct Answer
verified

What are the major sources of consumer credit existing in the marketplace? Which is the best source of credit?

Correct Answer
verified
There are several sources of credit avai...
View Answer

As a rule of thumb, consumer debt as a fixed percentage of monthly income based on experiences of financial planners is:

Correct Answer
verified

Which of the following is not a major factor in determining where money should be put to work?

Correct Answer
verified

Exam 6: Cash Management, Savings, Credit, and Debt Planning

David Lent informs you that his financial situation is sound. And yet, his cash flow statement shows a significant deficit. How do you handle this discrepancy?

Correct AnswerverifiedIt is possible that David has neglected ...View AnswerShow Answer

Which of the following types of sales credit does not offer the potential of no-finance charge?

Correct AnswerverifiedShow Answer

Is there a way to determine how much debt one can afford?

Correct AnswerverifiedConsumer credit is a powerful financial ...View AnswerShow Answer

Explain the net worth planning strategy.

Correct AnswerverifiedNet worth planning involves the calculat...View AnswerShow Answer

The equation to determine the equivalent fully-taxable yield, ignoring state and local taxes, is:

Correct AnswerverifiedShow Answer

Elaborate on the following statement: "In our credit-conscious society it is extremely important to protect your credit history."

Correct AnswerverifiedThe statement is absolutely True. Denial...View AnswerShow Answer

If available savings fall short of the amount required to meet the desired goals, what drastic steps can be taken to correct the situation?

Correct AnswerverifiedIf savings are inadequate to meet the de...View AnswerShow Answer

What are the tax rules regarding the deductibility of interest cost?

Correct AnswerverifiedThe True cost of credit is arrived at by...View AnswerShow Answer

Explain in detail the essential features of cash management planning.

Correct AnswerverifiedThe net worth statement determines the v...View AnswerShow Answer

If the number of payments and loan duration are the same, which type of interest calculation method would have an effective interest rate higher than the nominal rate?

Correct AnswerverifiedShow Answer

David Israeli wants to buy a new car. He can get the loan from the auto dealer, his credit union, or a savings and loan association. Alternately, he can buy the car with cash. What should he do?

Correct AnswerverifiedPaying cash for a car is desirable to sa...View AnswerShow Answer

Which of the following types of investments are not insured by FDIC?

Correct AnswerverifiedShow Answer

What are the major sources of consumer credit existing in the marketplace? Which is the best source of credit?

Correct AnswerverifiedThere are several sources of credit avai...View AnswerShow Answer

As a rule of thumb, consumer debt as a fixed percentage of monthly income based on experiences of financial planners is:

Correct AnswerverifiedShow Answer

Which of the following is not a major factor in determining where money should be put to work?

Correct AnswerverifiedShow Answer

Correct Answer
verified
It is possible that David has neglected ...
View Answer

Correct Answer
verified

Correct Answer
verified
Consumer credit is a powerful financial ...
View Answer

Correct Answer
verified
Net worth planning involves the calculat...
View Answer

Correct Answer
verified

Correct Answer
verified
The statement is absolutely True. Denial...
View Answer

Correct Answer
verified
If savings are inadequate to meet the de...
View Answer

Correct Answer
verified
The True cost of credit is arrived at by...
View Answer

Correct Answer
verified
The net worth statement determines the v...
View Answer

Correct Answer
verified

Correct Answer
verified
Paying cash for a car is desirable to sa...
View Answer

Correct Answer
verified

Correct Answer
verified
There are several sources of credit avai...
View Answer

Correct Answer
verified

Correct Answer
verified