BUSN380 Personal Financial Planning Course


BUSN380 Personal Financial Planning Course
Using your income from your current job or using income from a future job that you are planning…

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BUSN380 Personal Financial Planning Course

BUSN380 Personal Financial Planning Course

A + Entire Course: Homework Week 1-7|Quiz Week 1-7|Job Search and Personal Budget |You Decide Buying a House |Car Buying |Discussions Week 1-7|Final Exam

Homework Week 1-7

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Homework Week 1

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  1. Ben Collins plans to buy a house for $65,000. If that real estate property is expected to increase in value 5 percent each year, what would its approximate value be seven years from now?
  2. At an annual interest rate of five percent, how long would it take for your savings to double?
  3. In the mid-1990s, selected automobiles had an average cost of $12,000. The average cost of those same motor vehicles is now $20,000. What was the rate of increase for this item between the two time periods?
  4. A family spends $28,000 a year for living expenses. If prices increase by 4 percent a year for the next three years, what amount will the family need for its living expenses?
  5. What would be the yearly earnings for a person with $6,000 in savings at an annual interest rate of 5.5 percent?
  6. Elaine Romberg prepares her own income tax return each year. A tax preparer would charge her $60 for this service. Over a period of 10 years, how much does Elaine gain from preparing her own tax return? Assumes she can earn 3 percent on her savings.
  7. Tran Lee plans to set aside $1,800 a year for the next six years, earning 4 percent. What would be the future value of this savings amount?
  8. If you borrow $8,000 with a 5 percent interest rate to be repaid in five equal payments at the end of the next five years, what would be the amount of each payment? (Note: Use the present value of an annuity table in the Chapter 1 Appendix.)
  9. Based on the following data, compute the total assets, total liabilities, and net worth.

Liquid assets, $3,670                                     Household assets, $89,890

Investment assets, $8,340                              Long-term liabilities, $76,230

Current liabilities, $2,670

  1. Which of the following employee benefits has the greater value? Use the formula given in the “Financial Planning Calculations” – “Tax-Equivalent Employee Benefits” box found in Chapter 2 to compare these benefits. (Assume a 28 percent tax rate.)

A nontaxable pension contribution of $4,300 or the use of a company car with a taxable value of $6,325.

BUSN380 Personal Financial Planning Course

Homework Week 2

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  1. Thomas Franklin arrived at the following tax information:

Gross salary, $46,660

Interest earnings, $225

Dividend income, $80

One personal exemption, $3,400

Itemized deductions, $7,820

Adjustments to income, $1,150

What amount would Thomas report as taxable income?

  1. What would be the net annual cost of the following checking account?

Monthly fee, $3.75; processing fee, 25 cents per check; checks written, an average of 22 a month.

  1. What would be the average tax rate for a person who paid taxes of $4,864.14 on a taxable income of $39,870?
  1. A payday loan company charges 4 percent interest for a two-week period. What would be the annual interest rate from that company?
  1. What is the annual opportunity cost of a checking account that requires a $350 minimum balance to avoid service charges? Assume an interest rate of 6.5 percent

BUSN380 Personal Financial Planning Course

Homework Week 3

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  1. Louise McIntyre’s monthly gross income is $2,000. Her employer withholds $400 in federal, state, and local income taxes and $160 in Social Security taxes per month. Louise contributes $80 per month for her IRA. Her monthly credit payments for VISA, MasterCard, and Discover card are $35, $30, and $20, respectively. Her monthly payment on an automobile loan is $285. What is Louise’s debt payments-to-income ratio? Is Louise living within her means?
  1. Calculating Debt Payments – to – Income Ratio. Suppose that your monthly net income is $2,400.  Your monthly debt payments include your student loan payment, a gas credit card and they total $360.  What is your debt payments – to – income ratio?
  2. Dave borrowed $500 for one year and paid $50 in interest. The bank charged him a $5 service charge.

A- What is the finance charge on this loan?

B-  Dave borrowed $500 on January 1, 2006, and paid it all back at once on December 31, 2006. What was the APR?

C-  If Dave paid the $500 in 12 equal monthly payments, what is the APR?

  1. Calculating Simple Interest on a Loan. Damon convinced his aunt to lend him $2,000 to purchase a plasma digital TV.  She has agreed to charge only 6 % simple interest, and he has agreed to repay the loan at the end of one  year.  How much interest will he pay for the year?
  2. After visiting several automobile dealerships, Richard Welch selects the car he wants. He likes its $10,000 price, but financing through the dealer is no bargain. He has $2,000 cash for a down payment, so he needs an $8,000 loan. In shopping at several banks for an installment loan, he learns that interest on most automobile loans is quoted at add-on rates. That is, during the life of the loan, interest is paid on the full amount borrowed even though a portion of the principal has been paid back. Richard borrows $8,000 for a period of four years at an add-on interest rate of 11 percent.


  1. What is the total interest on Richard’s loan?
  2. What is the total cost of the car?
  3. What is the monthly payment?
  4. What is the annual percentage rate (APR)?

BUSN380 Personal Financial Planning Course

Homework Week 4

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    1. Determining Profit or Loss from an Investment. Three years ago, you purchased 150 shares of IBM stock for $88 a share. Today, you sold your IBM stock for $103 a share.  For this problem, ignore commissions that would be charged to buy and sell your IBM shares.

     a. What is the amount of profit you earned on each share of IBM stock?

    b. What is the total amount of profit for your IBM investment?

    1. Calculating Rate of Return. Assume that at the beginning of the year, you purchase an investment for

    $8,000 that pays $100 annual income. Also assume the investment’s value has decreased to $7,400 by the end of the year.

    a.  What is the rate of return for this investment?

    b.  Is the rate of return a positive or negative number?

    3.  Calculating Earnings Per Share, Price-Earnings Ratio, and Book Value. As a stockholder in Bozo Oil Company, you receive its annual report. In the financial statements, the firm has reported assets of $9 million, liabilities of $5 million, after-tax earnings of $2 million, and 750,000 outstanding shares of common stock.

    a.  Calculate the earnings per share of Bozo Oil’s common stock.

    b.   Assuming that a share of Bozo Oil’s common stock has a market value of $40, what is the firm’s price-earnings ratio?

    c.   Calculate the book value of a share of Bozo Oil’s common stock.

    1. Determining Interest and Approximate Bond Value. Assume that three years ago, you purchased a

    corporate bond that pays 9.5 percent. The purchase price was $1,000. Also assume that three years     after your bond investment, comparable bonds are paying 8 percent.

    a.  What is the annual dollar amount of interest that you will receive from your bond investment?

    b.  Assuming that comparable bonds are paying 8 percent, what is the approximate dollar price for which you could sell your bond?

    c.  In your own words, explain why your bond increased or decreased in value.

    1. Using Margin. Bill Campbell invested $4,000 and borrowed $4,000 to purchase shares in Wal-Mart. At the time of investment, Wal-Mart was selling for $45 a share.                                                                                                                                                                                                                                                                                             a.  If Bill paid $30 commission, how many shares could Bill buy if he used only his own money and did not use margin?

    b.  If Bill paid $50 commission, how many shares could Bill buy if he used his $4,000 and borrowed $4,000 on margin to buy Wal-Mart stock?

    c.  Assuming that Bill did use margin, paid $90 commission to sell his stock, and sold his Wal-Mart stock for $53, how much profit did he make on his Wal-Mart investment?

    1. Calculating yields. Assume you purchased a corporate bond at its current market price of $850 on January 2, 2002. It pays 9 percent interest and it will mature on December 31, 2011, at which time the corporation will pay you the face value of $1,000
    2. a. Determine the current yield on your bond investment at the time of purchase.
    3. b. Determine the yield to maturity on your bond investment.

BUSN380 Personal Financial Planning Course

Homework Week 5

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  1. Tammy Monahan is considering the purchase of a home entertainment center. The product attributes and weights she plans to consider are:

portability            .1

sound projection  .6

warranty              .3

Tammy rated the brands as follows:

portabilitysound projectionwarranty
Brand A687
Brand B968
Brand C596

Using the Consumer Buying Matrix presented in Chapter 8, conduct a quantitative product evaluation rating for each brand. What other factors is Tammy likely to consider when making her purchase?

  1. Based on the following, calculate the costs of buying and of leasing a motor vehicle.
Purchase Costs            Leasing Costs
Down payment                 $1,500Security deposit                 $500
Loan payment        $450 for 48 monthsLease payment       $450 for 36 months
Estimated value at

End of loan                      $4,000

End of lease charges         $600
Opportunity cost interest rate: 4 percent
  1. You can purchase a service contract for all of your major appliances for $180 a year. If the appliances are expected to last for 10 years, and you earn 5 percent on your savings, what would be the future value of the amount you would pay for the service contract?
  2. You estimate that you can save $3,800 by selling your own home rather than using a real estate agent. What would be the future value of that amount if invested for five years at 7 percent?
  3. John Walters is comparing the cost of credit to the cash price of an item. If John makes a $60 down payment, and pays $34 a month for 24 months, how much more would that be than the cash price of $695?

BUSN380 Personal Financial Planning Course

Homework Week 6

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  1. For each of the following situations, what amount would the insurance company pay?

a.Wind damage of $835; the insured has $500 deductible.

b.Theft of a stereo system worth $1,300; the insured has a $250 deductible.

c.Vandalism that does $425 of damage to a home; the insured has a $500 deductible.

2.  Beverly and Kyle Nelson currently insure their cars with separate companies paying $650 and $575 a year. If they insure both cars with the same company, they would save 10 percent on the annual premiums. What would be the future value of the annual savings over ten years based on an annual interest rate of 6 percent?

3.  As of 2008, per capita spending on health care in the United States was about $8,000. If this amount increased by 5 percent a year, what would be the amount of per capital spending for health care in 10 years?

4.  Sarah’s comprehensive major medical health insurance plan at work has a deductible of $750. The policy pays 85 percent of any amount above the deductible. While on a hiking trip, she contracted a rare bacterial disease. Her medical costs for treatment, including medicines, tests, and a six-day hospital stay, totaled $8,893. A friend told her that she would have paid less if she had a policy with a stop-loss feature that capped her out-of-pocket expenses at $3,000. Was her friend correct? Show your computations. Then determine which policy would have cost Sarah less and by how much.

5.  The Kelleher family has health insurance coverage that pays 80 percent of out-of-hospital expenses after a $500 deductible per person. If one family member has doctor and prescription medication expenses of $1,100, what amount would the insurance company pay?

6.  You are the wage earner in a “typical family,” with $40,000 gross annual income.  Use the easy method to determine how much life insurance you should carry.

BUSN380 Personal Financial Planning Course

Homework Week 7

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Calculating Net Asset Value. Given the information below, calculate the net asset value for the Boston Equity mutual fund.

Total assets$225,000,000
Total liabilities5,000,000
Total number of shares4,400,000
  1. Calculating the Rate of Return of Investment Using Financial Leverage. Suppose Shaan invested just $10,000 of his own money and had a $90,000 mortgage with an interest rate of 8.5 percent. If after three years he sold the property for $120,000.
  2. What is his gross profit?
  3. What is his net profit/loss?
  4. What is the rate of return on investment?
  1. Shelly’s assets include money in the checking and savings accounts, investments in stocks and mutual funds, personal property, such as furniture, appliances, an automobile, coin collection and jewelry. Shelly calculates that her total assets are $108,800.  Her current unpaid bills, including an auto loan, credit card balances, and taxes total $16,300.  Calculate Shelly’s net worth.
  2. Barry and his wife Mary have accumulated over $4 million during their 45 years of marriage. They have three children and five grandchildren.

A-  How much money can Barry and Mary gift to their children in 2008 without any gift tax liability?

B-    How much money can Barry and Mary gift to their grandchildren?

C-   What is the total amount of estate removed from Barry and Mary’s estate?

  1. Dave bought a rental property for $200,000 cash. One year later, he sold it for $240,000.

A- What was the return on his $200,000 investment?

B-   Suppose Dave invested only $20,000 of his own money and borrowed $180,000 (interest free from his rich father). What was his return on investment?

BUSN380 Personal Financial Planning Course

Quiz Week 1-7

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Quiz Week 1

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(TCO 1) Brad Opper has a goal of “saving $50 a month for vacation.” Brad’s goal lacks: 

Measurable terms
A realistic perspective
Specific terms
The type of action to be taken
A time frame

(TCO 1)  The first step of the financial planning process is to:
develop financial goals.
Implement the financial plan.
Analyze your current personal and financial situation.
Evaluate and revise your actions.
Create a financial plan of action.

(TCO 1) Which of the following is an example of opportunity cost?
Renting an apartment near school
saving money instead of taking a vacation
setting aside money for paying income tax
purchasing automobile insurance
using a personal computer for financial planning

(TCO 1) Opportunity cost refers to:
money needed for major consumer purchases.
What a person gives up by making a choice.
The amount paid for taxes when a purchase is made.
Current interest rates.
Evaluating different alternatives for financial decisions.

(TCO 1) If a person deposited $50 a month for 6 years earning 8 percent, this would involve what type of computation?
Simple interest
future value of a single amount
future value of a series of deposits
present value of a single amount
present value of a series of deposits

BUSN380 Personal Financial Planning

(TCO 1) Which type of computation would a person use to determine current value of a desired amount for the future?
Simple interest
future value of a single amount
future value of a series of deposits
present value of a single amount
present value of a series of deposits

(TCO 1)  If inflation is increasing at 3 percent per year, and your salary increases at the same rate, how long will it take your salary to double?
30 years
24 years
18 years
12 years
It would never double

(TCO 1) A(n) _____ summarizes your current financial situation, analyzes your financial
needs, and recommends a direction for your financial activities. (Points : 1)

Insurance prospectus



Investment forecast

Financial plan

(TCO 1) The main goal of personal financial planning is:

Saving and investing for future needs

Reducing a person’s tax liability

Achieving personal economic satisfaction

Spending to achieve financial objectives

Saving, spending, and borrowing based on current needs

(TCO 1) The ability to convert financial resources into usable cash with ease is referred to as: 

Opportunity cost

BUSN380 Personal Financial Planning Course

(TCO 1) If you put $1,000 in a saving account and make no further deposits, what type of calculation would provide you with the value of the account in 20 years?
Future value of a single amount
simple interest
present value of a single amount
present value of a series of deposits
future value of a series of deposits

(TCO 1) The financial planning process concludes with efforts to
develop financial goals.
Create a financial plan of action.
Analyze your current personal and financial situation.
Review the financial plan.
Review and revise your actions.

(TCO 1)  If you desire your money to double in 6 years, what rate of return would you need to earn?
6 percent
8 percent
9 percent
10 percent
12 percent

 (TCO 1) From an economic standpoint, prices in the marketplace are determined through (Points : 1)

The stock market

The government


Supply and demand

Interest rates

(TCO 1) As Jean Tyler plans to set aside funds for her young children’s college education, she is setting a(n) _____ goal. (Points : 1)






(TCO 1) A family spends $40,000 on living expenses. With an annual inflation rate of
3%, they can expect to spend approximately _____ in 4 years. (Points : 1)






(TCO 1) Personal financial planning has a main goal of  (Points : 1)

Reducing a person’s tax liability

Saving and investing for future needs

Spending to achieve financial objectives

Saving, spending, and borrowing based on current needs

Achieving personal economic satisfaction

(TCO 1) When it comes to the financial planning process, the first step is to (Points : 1)

Develop financial goals

Implement the financial plan

Evaluate and revise your actions

Analyze your current personal and financial situation

Create a financial plan of action

(TCO 1) The simple calculation of interest can be performed by multiplying the amount in
a savings account by the (Points : 1)

Annual interest rate

Annual interest rate and the time period

Number of months in a year

Time period and number of months

Time period

(TCO 1) When supply and demand for goods affects the job market, this is considered to
be a(n) _____ influence. (Points : 1)






(TCO 1) A _____ résumé is designed to obtain a specific job. (Points : 1)






BUSN380 Personal Financial Planning Course

(TCO 1) Personal relationships, health, and informal education goals fall into the category
of _____ goals. (Points : 1)






(TCO 1) If John Smith is making plans to make holiday purchases at the end of the year, he is setting a(n) _____ goal. (Points : 1)






(TCO 1) In order to evaluate present value scenarios, _____ is/are needed. (Points : 1)



Simple interest calculations


Payment information

(TCO 1) If an employee has tax-deferred benefits, this means that the benefits are (Points : 1)

Taxed at some point in the future

Not subject to state income tax

Exempt from federal income tax

Taxed at a special rate

(TCO 1) In order to evaluate one’s current financial position (including net worth), the
best tool that can be used is a (Points : 1)


Cash flow statement

Time-value-money report

Balance sheet

 (TCO 1) _____ refers to the natural abilities people possess that can be brought to the
workplace. (Points : 1)



Survival skills

Occupation techniques


(TCO 1) Cash and other items that are easily converted to cash are referred to as _____. (Points : 1)

Quick assets

Working assets

Liquid assets


Solvent items

(TCO 1) A person’s financial position can be improved if he or she experiences (Points : 1)

Increased liabilities

Reductions in earnings

Additional credit purchases

An increase in investments and savings

Lower amounts deposited in savings

(TCO 1) _____ is the ability to convert assets and financial resources into usable cash
relatively easily. (Points : 1)

(TCO 1) Which of the following situations best represents an individual facing

insolvency? (Points : 1)

(TCO 1) Personal balance sheets can be used to analyze (Points : 1)

BUSN380 Personal Financial Planning Course

Quiz Week 2

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(TCO 2) _____ can reduce taxable income. (Points : 1)

Portfolio income

Tax credits


Passive income

Earned income

(TCO 2) Whenever an individual takes on a personal effort and receives money, this is reported as _____ income. (Points : 1)





Capital gains

(TCO 2) _____ allows for a certain amount of money to be deducted from adjusted gross income, and the total can be based upon yourself, a spouse, and the number of dependents (Points : 1)

A tax credit

An exemption

An exclusion

Earned income

Portfolio income

(TCO 2) A person’s taxes are affected by an exclusion because (Points : 1)

The amount of taxable income is reduced

Itemized deductions will increase

Itemized deductions will decrease

A person’s tax rate will be lowered

The number of exemptions a person can claim will increase

(TCO 2) _____ would qualify a person for an exemption when computing taxable income. (Points : 1)

Mortgage interest

A tax shelter

A dependent

Charitable contributions

Passive income

(TCO 2) This type of tax is assessed on specific goods and services at the time of purchase. (Points : 1)




General sales

Value added

(TCO 2) When a taxpayer’s income increases $950 and the taxes owed increases from $7,867 to $8,177, the marginal tax rate is _____. (Points : 1)






(TCO 2) People who _____ must make estimated quarterly tax payments. (Points : 1)

Are employed in a foreign country

Receive dividends

Work for the government

Do not have adequate amounts withheld from income

(TCO 2) A(n) _____ is an all-purpose account that provides several services. (Points : 1)

NOW account

Asset management account

EFT account

Mutual fund

Money market account

(TCO 2) A notable difference between a lost debit card and a lost credit card is that _____. (Points : 1)

A credit card carries more risk of loss to the cardholder

A debit card carries more risk of loss to the cardholder

There is no cardholder liability if either type of card is lost

There is no difference in liability

(TCO 2) An example of a place where one will encounter high fees for loans when borrowing money is a _____. (Points : 1)

Credit union

Savings and loan association


Commercial bank

Mutual savings bank
(TCO 2) _____ are the major products offered by investment companies. (Points : 1)

Interest-bearing checking accounts

Variable-rate loans

Credit card accounts

Savings bonds

Mutual funds

(TCO 2) One of the characteristics of a certificate of deposit is that it can have (Points : 1)

High interest-rate risk

Low safety for savers

Limited liquidity

A variable rate of return

No minimum deposit amount

(TCO 2) When filing your taxes, a set amount on which no taxes are paid is called _____. (Points : 1)

Itemized deductions


An earned tax credit

The standard deduction

Capital gains

(TCO 2) Taxes owed can be reduced through _____. (Points : 1)

The standard deduction

A tax credit

An itemized deduction

An exclusion

An exemption

(TCO 2) U.S. savings bonds provide the following advantage. (Points : 1)

Interest earned is exempt from federal income taxes

Interest earned is deferred for federal tax purposes

A constant rate of earnings

They can be converted to other types of investments

(TCO 2) _____ can offer deposit accounts that are insured through the Federal Deposit Insurance Corporation. (Points : 1)

(TCO 2) The _____ is the rate that the Federal Reserve charges banks for loans. (Points : 1)

(TCO 2) When a person is presenting a check in order to obtain cash, a _____ endorsement would be used. (Points : 1)

BUSN380 Personal Financial Planning Course

Quiz Week 3

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(TCO 3) All of the following provide data to credit bureaus except (Points : 1)


Finance companies


Court records

The Internal Revenue Service

(TCO 3) Personal bankruptcy can be reported to credit bureaus for _____ years. (Points : 1)






(TCO 3) When a lender analyzes a borrower’s assets or net worth, this is called (Points : 1)






(TCO 3) The first step you should take if you are denied credit is to (Points : 1)

Increase your income and decrease your spending

Check your credit file at the consumer bureau

Hire an attorney and file a suit against the creditor

Reapply for credit

Sue the credit bureau that provided the negative information

(TCO 3) Which one of the selections can be categorized as a disadvantage of credit? (Points : 1)

The use of credit can allow you to receive advance notice of sales

The use of credit can allow for you to purchase previously inaccessible items

The use of credit allows for the purchase of goods even when funds are low

The use of credit can allow for the easier return of merchandise

The use of credit can lead to overspending

(TCO 3) By evaluating your credit options, you can do all of the following except (Points : 1)

Reduce your finance charges

Reconsider your decision to borrow money

Discover a less expensive type of loan

Find a lender that charges a lower rate

Purchase goods and services without specific limitations

(TCO 3) While collateralized loans may provide lower interest rates, these loans have a disadvantage because (Points : 1)

The loan must be repaid in a short period of time

You ruin your credit rating

The loan is difficult to obtain

Commercial banks do not make such loans

The assets used as collateral are tied up until the loan has been repaid

(TCO 3) What is the top reason why consumers default on their debts?  (Points : 1)

Medical expenses

Defective goods and services

Excessive use of credit

Fraudulent use of credit

Consumer fraud

(TCO 3) Examples of _____ include automobile and installment loans for purchasing furniture or appliances. (Points : 1)

A line of credit

A credit card loan

Open-end credit

Closed-end credit

Convenience credit

(TCO 3) The maximum percentage of your net income that should be spent on credit purchases is recommended to be _____. (Points : 1)






(TCO 3) One of the concerns and risks associated with cosigning is that (Points : 1)

You are not being asked to guarantee the debt

It is not your legal responsibility to pay the debt.

You’ll have to pay up to the full amount of the debt if the borrower does not pay

The creditor must first try to collect from the borrower

The creditor cannot garnish your wages

(TCO 3) The maximum debt-to-equity ratio limit for an individual (excluding one’s home mortgage) should be which one of the following? (Points : 1)


33 to 1




(TCO 3) One day, Gary notices that is neighbor has purchased a new Land Rover and it is sitting in his driveway. Gary decides that he also needs a new car and goes out and purchases a Hummer with a 6-year loan on it. Which reason for indebtedness is this an example of? (Points : 1)

Misunderstanding or lack of communication

Keeping up with the Joneses

The expectation of instant comfort

The use of money to punish

Overindulgence of children

(TCO 3) A signal of a potential debt problem would be (Points : 1)

Paying more than the minimum balance on credit cards each month

Making payments on time

Building up a savings account

Depending on overtime to meet normal expenses

The gradual but steady reduction in credit card balances

(TCO 3) If Tony Jones knows he can get a car loan for up to 5 years at a credit union but decides that he can easily repay the loan in 3 years, and therefore gets a 3-year loan, how is Tony reducing the lender’s risk? (Points : 1)

He is sharing the interest rate risk with his lender

He is pledging valuable assets that can be seized if the loan is not repaid

He is repaying the loan over a faster period of time

He is taking a larger stake in the asset he is purchasing

He is obtaining the loan from the credit union

(TCO 3) If Thomas borrows $500 for 1 year with an APR of 10% and an annual service fee of $20, what is his total cost of credit?  (Points : 1)






(TCO 3) Rick Mouney starts the month with a balance of $1,000 on his credit card. On the 10th day of the month, he purchases $200 in clothes with his credit card. On the 15th day of the month, he makes a payment on his credit card of $500. The average daily balance for the month including the new purchase is $883. The average daily balance for the month excluding the new purchase is $750. Rick’s interest rate is 1.5% for the month. Rick’s bank calculates the finance charge on the credit card by using the average daily balance, including new purchases. What would Rick’s finance charges be for the month? (Points : 1)






(TCO 3) If Sarah goes out and spends $600 in new clothes for herself, putting it all on her credit card after her husband returns at 4 a.m. the previous morning from a night on the town, this is an example of which of the following? (Points : 1)

(TCO 3) _____ families rely heaviest on student loans to finance college.  (Points : 1)

(TCO 3) One of the five Cs of lending refers to a borrower’s financial ability to meet credit obligations; this is called (Points : 1)

BUSN380 Personal Financial Planning Course

Quiz Week 4

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(TCO 5) Which of the following statements is false? (Points : 1)

When choosing an investment, it is necessary to consider the risk factor

During inflationary times, there is a risk that the financial return on an investment will not keep pace with the rate of inflation

The interest rate risk associated with investments in bonds is the result of changes in business conditions faced by companies

The risk of business failure deals with changes in the value of stocks and bonds due to changes and risks within a business itself

The prices of stocks, bonds, and other investments fluctuate in the market

(TCO 5) A $1,000 corporate bond pays 6.5% a year. What is the annual interest you will receive?  (Points : 1)






(TCO 5) _____ risk occurs when an investment does not keep up with increasing price levels in our economy. (Points : 1)




Business failure


(TCO 5) John Farmer recently received a legal form from the company where he owns stocks that list the issues to be decided at the annual stockholders’ meeting. The item asks that he signs something that allows someone else to vote for him. What has he received? (Points : 1)



Voting rights


None of the above

(TCO 5) You received a notice that shares of stock you purchased and own will be divided into a larger number. Ultimately, you will get two shares for every share that you own. What has happened? (Points : 1)

A dividend split

A proxy split

A stock split

A banana split

An equity split

(TCO 5) If Orlando Blodgett is buying the stock of the Getaway Caribbean Cruise Company. If he buys the stock today, knowing it is the first day it is selling without the dividend for this quarter, on what date is Orlando buying the stock? (Points : 1)

Record date

Sale date

Payment date

Ex-dividend date

None of the above

(TCO 5) A(n) _____ fund is a fund to which annual or semiannual deposits are made for the purpose of redeeming a bond issue. (Points : 1)






(TCO 5) A government security issued in minimum units of $100 with a 30-year maturity is called a (Points : 1)

subordinated bond

Treasury bill

Treasury note

Treasury bond

Savings bond

(TCO 5) Which of the following statements accurately describe a line of credit? (Points : 1)

A line of credit is already approved before the money is actually needed

A line of credit is not available immediately when needed

A line of credit cannot be obtained at a credit union, savings and loan association, or bank

A line of credit cannot provide an alternative source of funds if an emergency does develop

A line of credit is a long-term loan

(TCO 5) Which of the following individuals should have the highest tolerance for risk? (Points : 1)

Joan Cummings, who is a single mother with two small children

Darren Carter, who works for American Airlines and is worried that he is going to be laid off soon
Barry Parks, who is an investment banker and earns over $200,000 per year

Michael Clark, who is 74 years old and been retired for 6 years

Fred Funderbunk, who delivers pizzas and makes about $15,000 per year

(TCO 5) Which of the following statements is false? (Points : 1)

No one is going to make you save the money; you need to start a program

To be useful, investment objectives must be very specific

Investment goals can be different for each individual

Because investment objectives deal with the future, it is useful to plan more than 5 years in the future

A long-term investment objective involves a time period of 2 years or less

(TCO 5) If an investment objective is considered to be long term, then this means the goal should be achieved in what time frame? (Points : 1)

Less than 2 years

In 2–5 years

More than 5 years

Less than 1 year

None of the above

(TCO 5) Arnell Johnson bought 250 shares of Black Petroleum Company for $95 per share. He paid a commission of $55 when he purchased this stock. He sold the stock 5 years later for $115 per share. When he sold it he paid a commission of $70. While he held the stock, it paid a dividend of $3.50 per share. What was Arnell’s total dollar return on this stock? (Points : 1)






(TCO 5) Dividends must be approved by a firm’s board of directors, and (Points : 1)

Dividend payments are paid out of profits

Dividends are guaranteed

Dividends are paid before a firm’s taxes are paid

Dividends are usually paid twice a year

Dividends can be paid forever

(TCO 5) You have purchased preferred stock that can be exchanged for common stock at your option. What kind of stock is this? (Points : 1)





None of the above

(TCO 5) Which of the following statements is false? (Points : 1)

Stockholders elect the board of directors

Stockholders pay taxes on dividends

Intelligent investors must be concerned about future after-tax profits

Dividend payments may not be reduced or omitted at any time

Corporate dividends may not always be paid in cash

(TCO 5) Nancy Groom owns one $1,000 corporate bond issued by Chevron. The bond has a yield of 10% and pays 8% interest semiannually. How much interest will Ms. Groom receive in 1 year? (Points : 1)






(TCO 5) The _____ describes legal conditions for a corporate bond. (Points : 1)

(TCO 5) All of the statements are false except for which? (Points : 1)

(TCO 5) A _____ is a bond typically secured by assets. (Points : 1)

BUSN380 Personal Financial Planning Course

Quiz Week 5

Click Here: BUSN380 Quiz Week 5

(TCO 1) Referring to consumer purchases, an example of a personal opportunity cost is (Points : 1)

Buying on credit

Selecting a commonly known brand

The influence of advertising on consumers

Time used to compare prices

Government regulation of deceptive business-government activities in an effort to prevent consumer fraud.

(TCO 1) In order to receive the best warranty if you desire some assurance of quality when buying a used car, you should purchase the vehicle from a(n) (Points : 1)

New car dealer

Private party

Used car dealer

Fleet sales company

Auction company

(TCO 1) A 16-ounce package selling for $1.80 would have a unit price of (Points : 1)


$28.80 a pound

$11.25 an ounce

$8.80 a quart

12 cents an ounce

(TCO 1) Service contracts may not always be the best solution for consumers because of (Points : 1)

Poor service from repair companies

Limited coverage of repairs

Weak government regulation of service contract companies

High costs and a low chance of need

The fact that few places are available for repairs

(TCO 1) The Better Business Bureau has a major purpose to (Points : 1)

Recommend reputable companies in an area

Evaluate products and services for quality

Lobby for improved consumer protection laws

Resolve consumer complaints

Represent business in government hearings

(TCO 1) Consumers have an option to go to small claims court to (Points : 1)

Regulate fair business activities

Resolve minor complaints

Allow consumers with similar complaints to take action as a group

Provide hearing on proposed consumer protection laws

Assist low-income consumers who need legal help

(TCO 1) If you decide to purchase a vehicle from a private party, then you will have (Points : 1)

No implied warranties

No express warranty

A limited warranty

A 30-day return privilege

A government-supported repair guarantee

(TCO 1) The purpose of a cooperative is to (Points : 1)

Solve consumer complaints

Test consumer products for quality

Lobby for changes in consumer protection laws

Obtain brand-name items for less than wholesale

Sell products or services to members at reduced prices

(TCO 1) When someone states that he or she has purchased a good or service on impulse, this means that this individual has (Points : 1)

Evaluated alternatives

Gathered information

Comparison shopped

Selected the least desirable alternative

Made an unplanned purchase

(TCO 1) When reviewing the Edmund’s Guide, you will find information pertaining to (Points : 1)

Safety problems of existing vehicles

Price data

Sales of stolen vehicles

Cars available for sale from government agencies

Car repairs

(TCO 3) When making the decision to buy a home or rent, renting would be more suitable for an individual who (Points : 1)

Has limited funds currently available

Has difficulty establishing credit

Wants to reduce his or her taxes

Enjoys remodeling his or her residence

Desires the financial benefits of increased equity

(TCO 3) A _____ mortgage is basically a home equity loan. (Points : 1)

Shared appreciation


Growing equity

Graduated payment


(TCO 3) A home owner will often realize a benefit of (Points : 1)

A low security deposit

Increased property value

The amortization of the growth of equity

The tax deductibility of the down payment

Low maintenance

(TCO 3) Lonette and Al received a statement reporting that they paid $6,000 in mortgage interest during the past year. If they are in a 28% tax bracket, this deduction may reduce their taxable income by(Points : 1)






(TCO 3) Property restrictions can also be referred to as (Points : 1)

Cooperative agreements

Zoning laws

Common areas

Title insurance provisions

Refinancing clauses

(TCO 3) Todd Foley is applying for a $100,000 mortgage. He can get a $600 monthly payment for principal and interest and no points, or a $550 monthly payment with one point. How many months will it take Todd to cover the cost of the discount points if he takes the lower monthly payment? (Points : 1)






(TCO 3) FHA and VA mortgages may offer attractive terms to prospective home buyers, but one disadvantage of these mortgages is that they may have (Points : 1)

Higher risk

A longer processing time

Higher interest rates

Increased monthly payments

Down payment requirements

(TCO 3) You should still contact and use a(n) _____ if you sell your home without the use of a real estate agent. (Points : 1)

(TCO 3) If Jennifer Garland lives in a home assembled in a factory that was then moved to the living site, she is most like living in a (Points : 1)

(TCO 3) When one observes negative amortization, this means that there (Points : 1)

BUSN380 Personal Financial Planning Course

Quiz Week 6

Click Here: BUSN380 Quiz Week 6

(TCO 4) A _____ form of a homeowner’s policy would be needed if you purchase a new home and desire coverage for all causes of loss or damage except those specially excluded by the policy. (Points : 1)




Modified coverage


(TCO 4) If you decide to install a new home security system with cameras, this is an example of _____ risk. (Points : 1)






(TCO 4) The failure to take ordinary and reasonable care is referred to as (Points : 1)


A benefit


High risk

A hazard

(TCO 4) If a worker damages your home while painting several rooms, and you take action against the worker’s employer to cover the cost of the damage, this is an example of a(n) _____ liability. (Points : 1)



Common situation



(TCO 4) If a home insurance policy contains a component that covers additional living expenses, then this component is designed to (Points : 1)

Pay for medical expenses of people injured on your property

Cover damage to property while away from home

Reimburse a homeowner for damage done by a visitor

Pay for temporary housing while your home is repaired

Pay for repairs caused by fire or other hazards

(TCO 4) If a home inspection reveals defective house wiring, then this is an example of a (Points : 1)






(TCO 4) The 50 in 100/300/50 refers to _____ coverage. (Points : 1)


Bodily injury liability

Property damage liability

Medical payments

Comprehensive physical damage
(TCO 4) If you obtain a _____ home insurance policy, this will cover accidental damage to another person’s property by a member of your family. (Points : 1)


Personal property

Medical payments

Additional living expenses

Personal liability

(TCO 4) A(n) _____ is an insurance policy provision that requires that the insured pay for part of the loss of a claim if the property is not insured for the specified percentage of the replacement value. (Points : 1)

Personal property floater


Umbrella coverage

Coinsurance clause

Assigned risk clause

(TCO 4) Financial responsibility laws (Points : 1)

Reduce auto insurance costs

Assist poor drivers in getting insurance coverage

Pay for the high medical costs of auto accident victims

Require uninsured motorists coverage

Protect the public from financial losses due to auto accidents

(TCO 4)) The 250 in 250/500/100 refers to (Points : 1)

Property damage liability coverage

The limit for bodily injury claims that can be paid to one person

Collision coverage

The total coverage for an accident

The amount of the deductible

(TCO 4) Individuals and families purchase life insurance primarily to (Points : 1)

Pay liability claims resulting from accidents

Fill financial needs created by the loss of the breadwinner

Fund lavish retirement vacations

Keep up with people with a similar financial situation

Make early retirement possible

(TCO 4) A two-earner couple likely will have (Points : 1)

The greatest need for life insurance

No need for life insurance

A moderate need for life insurance, especially if the couple has a mortgage

The greatest need for an annuity

The exact same life insurance needs as all other two-earner couples

(TCO 4) Your annual income is $50,000. What is your life insurance need based on the easy method? (Points : 1)






(TCO 4) If you have purchased a medical insurance policy with a very low deductible and the policy pays for hospital, surgical, medical, and other bills under one plan, this is a called a _____. (Points : 1)

Low-cost policy

Hospital indemnity policy

Long-term care insurance

Cancer insurance policy

Comprehensive major medical insurance policy

(TCO 4) The most common type of permanent life insurance is called (Points : 1)

Whole life

Term life

Universal life

Modified life

Variable life

(TCO 4) All of the following are innovative ways that concerned groups are containing healthcare costs except for (Points : 1)

The establishment of incentives to encourage preventive care

Encouraging the use of prepaid group practices

The establishment of community education programs so people can learn to take better care of them

Encouraging doctors to pay cash for routine medical costs

Picketing at hospitals and physician offices

(TCO 4) In order to reduce your healthcare costs, you should do your best to (Points : 1)

(TCO 4) Thad Joslin was judged at fault in an automobile accident. Three others were awarded damages of $145,000, $75,000, and $80,000. Thad has 100/300 bodily injury liability coverage. What amount, if any, would not be covered by his insurance? (Points : 1)

(TCO 4) Which of the following statements is true? (Points : 1)

BUSN380 Personal Financial Planning Course

Quiz Week 7

Click Here: BUSN380 Quiz Week 7

(TCOs 6 and 7) Net asset value is typically calculated _____ for most mutual funds. (Points : 1)





Whenever an investor calls and requests a price quote

(TCOs 6 and 7) A(n) _____ fund is a mutual fund that invests in stocks issued by companies with a long history of paying dividends. (Points : 1)


Equity income



Money market

 (TCOs 6 and 7) The two real estate investment classifications consist of (Points : 1)

Participating or nonparticipating.

Common or preferred

Cumulative or noncumulative.
Direct or indirect.

None of the above

(TCOs 6 and 7) Single-family houses are typically expected to observe the following pattern. (Points : 1)

Values tend to rise, providing a possible hedge against inflation.
Values rise less than the Consumer Price Index.

Values remain stable in the northern parts of the United States.

Values tend to rise in New England states, but decline in the South.

Values remain unchanged in the United States.
(TCOs 6 and 7) A mutual fund that invests in the common stocks of companies in the same industry is called a(n) _____ fund. (Points : 1)





Money market

(TCOs 6 and 7) An investor holds legal title to a piece of property if he or she participates in what type of real estate investment? (Points : 1)

Ginnie Mae

Participation certificates (PCs)


Direct investment

Indirect investment

(TCOs 6 and 7) Owen Cartwright has joined a real estate syndicate that purchased a commercial office building in downtown Seattle, WA. What type of investment does he hold? (Points : 1)

Direct investment in real estate

Investment in gems

Investment in precious metals

Investment in collectibles

Indirect investment in real estate
(TCOs 6 and 7) Typically, what is the expected range (in years) for someone to be in retirement? (Points : 1)

1–5 years

25 years or more

10–12 years

12–16 years

6–10 years
(TCOs 6 and 7) Which REIT invests directly in properties? (Points : 1)

Compound REIT

Hybrid REIT

Mortgage REIT

Equity REIT

Simple REIT

(TCOs 6 and 7) Which statement is correct regarding retirement living expenses? (Points : 1)

It is impossible to estimate your spending needs.

Your spending patterns will probably not change.

You’ll use a smaller amount of money for food, housing, and medical care.

The exact amount of money you’ll need is impossible to predict.

Work-related expenses, such as driving back and forth to work, tend to be lower during retirement.

(TCOs 6 and 7) As an individual approaches retirement age, he or she may consider (Points : 1)

Increasing the face value of his or her life insurance.

Increasing his or her property insurance coverage.

Keeping his or her life insurance intact.

Decreasing the face value of his or her life insurance.

Exchanging his or her old life insurance policy with a new one.

 (TCOs 6 and 7) Estate planning involves _____ if a person is married. (Points : 1)

The interest of at least two people

Fewer legal requirements

Fewer financial responsibilities

Seeking the services of a securities broker

None of the above

(TCOs 6 and 7) A(n) _____ fund is a mutual fund in which new shares are issued and redeemed by the investment company at the request of investors.(Points : 1)






(TCOs 6 and 7) The _____ refers to the value of a mutual fund’s portfolio minus the mutual fund’s liabilities divided by the number of shares outstanding.(Points : 1)

Net asset value

Outstanding balance

Per share value

Book value

Accounting value

(TCOs 6 and 7) Financial planning for retirement is vitally important for all of the following reasons except (Points : 1)

You can expect to live in retirement for many years.

Social Security and private pensions may be insufficient to cover the cost of living.

Inflation may diminish the purchasing power of your retirement savings.

You can expect that Social Security will be sufficient to live on.

(TCOs 6 and 7) Under a(n) _____, everything will pass to your spouse when you die, with the exception of an amount equal to the exemption, which passes into trust. (Points : 1)

Simple will

Traditional marital share will

Exception will

Stated dollar amount will

Exemption trust will
(TCOs 6 and 7) If Gerry Legere dies without writing a will, legally this is referred to as the following situation. (Points : 1)





None of the above

(TCOs 6 and 7) All of the following statements are correct about wills except the following. (Points : 1)

(TCOs 6 and 7) When you retire, which one of the following expenditures is likely to decrease? (Points : 1)

(TCOs 6 and 7) Which is a will that leaves everything to your spouse when you die? (Points : 1)

BUSN380 Personal Financial Planning Course

Job Search and Personal Budget Week 3

Click Here: BUSN380 Job Search and Personal Budget

Using your income from your current job or using income from a future job that you are planning on having after graduating from college, construct a budget.

Searching for a job: Using a daily newspaper or an online search engine, find the monthly income/salary which will be used as your income in your personal budget.

Some useful job search websites: Mons, Career Builder, and Jobs.

Additional information can be found at the United States Department of Labor, Bureau of Statistics.

You may also take the research above to confirm and/or project what you should be earning if you intend to use your current job to complete this assignment.

Use the Personal Budget spreadsheet from Doc Sharing to enter your income from your current job or the income from the job that you are planning on having, then enter the rest of the details based on this personal income (expenses, spending, etc.).

Write a short paper (two page maximum, double spaced, APA format) on your job and budget; it should include the following as a minimum:

  • a job description;
  • reasons why you would like to have his job;
  • a salary; and
  • a discussion and explanation of how this dream job will or will not help you achieve your personal goals based on the outcome of your budget. 50 Points Total


Based on the personal budget I prepared, assuming an annual salary of $55,000, I could pay off my own apartment, everyday needs (food, clothing and transportation to and from work), and still have extras for entertainment.  What is amusing is, despite…

BUSN380 Personal Financial Planning Course

Buying a House – You Decide Week 5

Click Here: BUSN 380 Buying House


Scenario Summary

After a number of years of planning, you have made the decision to evaluate the potential purchase of a home. The goal of the assignment is to compare two homes based on demographics, and also to analyze a number of additional factors related to the home-buying process and ongoing possession.

Your Assignment

You will first need to research the housing market and compare the values of two similar homes in two different areas. The two homes must be extremely similar in structure size, land size, year built, and additions such as swimming pools or barns. Then, based upon your findings, you will select one of the homes to purchase, calculate a monthly payment on the mortgage note, compare this information with what you can potentially afford, and address additional questions related to home ownership.


A home ownership can be indeed a true pride and joy to any family.  However, if not carefully decided and prepared for, it can also be a source of stress and misery.  Choosing the right home that fits a family’s needs is important.  It does…

BUSN380 Personal Financial Planning Course

Car Buying Week 6

Click Here: BUSN380 Car Buying Assignment

In this assignment, we will learn how to buy a car and figure out whether it is priced at or below market value.

First, you need to decide on your budget which is the maximum you can spend on a car and that maximum number should take into consideration price, tax, registration, and fixing if needed.  (5 points)

Second, go to a web site such as cars.com and search for a car in within your budget constraint. (5 points)

Third, go to a web site such as the one for the Kelly Blue Book, and find out whether the car is at market value, overpriced, or underpriced.

Finally, write a two page paper discussing your findings and issues to explain or discuss:

  • Explain your choice.  Why did you select the car that you identified? What are three different prices the Kelly Blue Book provides? (10 points)
  • Based on Kelly Blue Book prices, is the car over or underpriced? (5 points)
  • Did you have any surprises, prior experience, feedback, thoughts, and so on? (5 points)
  • Referring to the car that you selected, discuss the insurance decisions you will need to make. What type of coverage will you need? What is the minimum amount of coverage you will need (based on your state of residence) and what amount of coverage would you actually like to have? Are there any actions you can take to reduce your premiums? Address these questions, taking into account your current budget and financial status. (10 points)

Spelling/Grammar (5 points)

References – (5 points)

Total = 50 Points


The Experts review from Kelly Blue Book (2015) confirms this general customer feedback, indicating the following: “This vehicle is the biggest seller worldwide mainly for its refined ride quality, sensible size and flexible floor plan.” Compared to similar vehicles like Saturn Vue, Ford Escape…

BUSN380 Personal Financial Planning Course

Course Discussions Week 1-7 All Student Posts – 600 Pages

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Week 1 All Students Posts – 75 Pages

Click Here: BUSN380 Course Discussions Week 1

Time Value of Money – 39 Pages

Click Here: BUSN380 Time Value of Money

Incorporating time-value-of-money concepts and information from well-developed personal financial statements identify your long-term financial goals and discuss the pertinent aspects for realizing these long-term financial goals. Explain the choices that you must make and how career planning will also fit into your plan…

In order to understand finance and personal financial planning it is imperative to understand the concept of time value of money.  I would like to start this class off by having everyone define in their own words what time value of money is.

Please define and discuss each of the following time value of money concepts:

  • Future value of a single amount
  • Future value of a series of deposits
  • Present value of a single amount
  • Present value of a series of deposits

What is the difference between economics and finance? Are they the same subject? Why or why not?

Here is a future value of an annuity question.  What amount would you have in a retirement account if you made annual deposits of $375 for 25 years earning 12%, compounded annually?

I would describe the time value of money as the idea that money available at the present time is worth more than the same amount in the future due to its potential earning capacity. This core principle of finance holds that, provided money can earn interest, any amount of money is worth more the sooner it is received….

Opportunity Cost – 36 Pages

Click Here: BUSN380 Opportunity Cost Course Discussions

Identify, quantify, and discuss the opportunity costs that arise from your decision to attend DeVry University. Using the concept of present value analysis, how would you justify your decision to acquire a college degree?

Understanding the basis of this topic is essential to this course.  Please name the 6 steps in the financial planning process.  Then pick 1 step and discuss it with at least 2 classmates.

Please search various book lists on the internet, for example from Goodreads.com, to find an interesting finance book that you would like to read.  The book could be about any subtopic as long as it is connected to finance.  Bring back your findings and discuss it with at least 2 classmates.

Please find an interesting article of your choice from the websites that I have added in the Webliography that is related to financial planning or opportunity costs.  Bring back your findings and discuss it with at least 2 classmates.

Please name the eight components of a personal financial plan.  All of these components will be covered in varying degrees by the end of this class. Then pick 1 component and tell us what you would like to learn about it in this course.  Then discuss it with at least 2 classmates.

An opportunity cost is the cost of a missed opportunity. It is the opposite of the benefit that would have been gained had an action that was not taken had instead BEEN taken. Put another way, the benefits you could have received by taking an alternative action. An example of this would be if a gardener decides to grow tomatoes, his or her opportunity cost is the alternative crop that might have been grown instead…

BUSN380 Personal Financial Planning Course

Week 2 All Students Posts – 92 Pages

Click Here: BUSN380 Course Discussions Week 2

Disposable Income – 45 Pages

Click Here: BUSN 380 Disposable Income

Identify and present all taxes you pay during the course of a typical year. Include taxes that are called fees (such fees are really taxes by another name). Some of the taxes you pay may have to be estimated (i.e., sales taxes). What is the percentage proportion of these taxes in relation to your income, and—with respect to your disposable income (that is, income after taxes)—what are the implications insofar as your spending behavior is concerned?

Please name the three steps of computing taxable income and your tax liability.  Please list the three types of income.  Pick 1 of the three and research a little information about it on IRS.gov.

What would be the average tax rate for a person who paid taxes of $4,864.14 on a taxable income of $39,870?

“What percentage of taxes did you really pay?”  A person who paid taxes of $4,864.14 on a taxable income of $39,870 would have an average tax rate of 12.2% ($4,864.14 / $39,870).  In other words, the taxes they paid ($4,864.14) is 12.2% of their total taxable income.

What is adjustable gross income (AGI)? How do you calculate AGI? Reference at least one article from any website in the Webliography.

What is the difference between the standard deduction and itemized deductions?  Can you use both? Why or why not?

The three steps of computing taxable income include determining adjusted gross income, computing taxable income, and calculating taxes owed.

Determining adjusted gross income is the step where all pertinent adjustments are netted against earned income. The first thing a tax payer (or tax preparer) needs to do is identify the sources of taxable income. Obviously our wages we earn for work performed is one source, but others could include alimony, dividends, gains from the sale of investments, prizes won, and so on. There are sources that do not need to be included, such as small amounts received from yard sales. The categories that these income types fall under are earned income, investment income, and passive income…

BUSN380 Personal Financial Planning Course

Alternative Savings Vehicles – 47 Pages

Click Here: BUSN380 Alternative Savings Vehicles

Identify the savings (investment) instruments you use or have used in the past (if you haven’t used any, identify those that you are most likely to use). Now, identify a number of alternative savings (investment) instruments that you have not used (or are least likely to use). Compare your two lists. Analyze the trade-offs that emerge. Why have you selected certain instruments in the past? Why may you use specific savings (investment) instruments in the future? Why will you decide to not use certain instruments in the future?

Name two types of financial institutions and elaborate on each.  Please provide an example of each one. This shall include a direct link to the financial institution’s website.

Pick two types of savings plans from the textbook and compare their benefits and drawbacks.  Tell us about an experience that you have had with one of these savings plan. Can you name and elaborate on the various factors that affect the evaluation of savings plans?

With a 28% marginal tax rate, would a tax free yield of 7% or a taxable yield of 9.5% give you a better return on your savings? What sources of assistance would you recommend for a friend who is asking questions about taxes?

Two examples of financial institutions include banks and insurance agencies.

Most banks offer an array of financial services, such as savings and checking accounts, loans, trusts, and long-term savings opportunities. I use our hometown Citizen’s Bank, which can be found at https://www.citizens-banking.com/home/home. Currently, they manage my checking and HSA accounts. They also provide our teenage children with junior checking services, which helped them learn to manage their cash. They also house all of our children’s savings accounts…

Week 3 All Students Posts – 96 Pages

Click Here: BUSN380 Course Discussions Week 3

Hazardous to Your Health! – 55 Pages

Click Here: BUSN380 Hazardous to Your Health

Using the Internet, locate a source that identifies the number of personal bankruptcies that have occurred in the United States during a relatively recent time period. Locate and report the results of Internet (or other) sources that assess the role played by credit card debt in relation to personal bankruptcies declared. What are the general conclusions regarding the effects of credit card debt upon bankruptcy filings? Do you believe that credit card debt is the only cause of bankruptcy? Are there any additional factors that can lead a consumer to make a personal bankruptcy decision?…

In your own words, tell us what role (if any) consumer credit had on the recent economic downturn.  Please cite at least 2 references from either the lecture, text, or the websites in the Webliography.

Please name several ways that you can protect yourself against credit card fraud.  Discuss this issue with at least 2 classmates.

Name the five C’s of Credit Management and tell us about how each relates to your current creditworthiness.  Assume that you are a bank manager and are reviewing your application for a $100,000 refinance loan.  Name four steps that you should do if your identity is stolen and tell us your thoughts about each one.  Then find an interesting article about identity theft and integrate it with your post.

Calculating the amount for a home equity loan.  A few years ago, Michael Tucker purchased a home for $100,000.  Today the home is worth $150,000.  His remaining mortgage balance is $50,000. Assuming Michael can borrow up to 80 percent of the market value of his home, what is the maximum amount he can borrow?

Present market value of Michael’s home = $150,000. Michael can borrow up to 80 percent of the market value…

According to James Wood, a retired Country Manager for Citibank in Latin America, the economic downturn is due to excessive consumer credit spending. He believes that, as home values increased, consumers assumed that that was unbreakable increase in personal wealth. Home owners began taking out home equity loans to fund expenditures such as vacations and other “unproductive spending”, and were not capable of repaying them. The increase in defaulted loans eventually led to the deflation of prices…

BUSN380 Personal Financial Planning Course

Credit Card Balances – 41 Pages

Click Here: BUSN380 Credit Card Balances

As a proportion of your personal net worth (total assets minus total liabilities), identify the proportion of credit card debt you currently have outstanding (or have had outstanding at some point in your life). Identify the expenditures that have given rise to your credit card debt. Which expenditures were discretionary and which were not? Discuss the implications. Are there any strategies that you can implement in order to better manage and reduce credit card debt? What strategies have you used? What are the most frequent reasons for indebtedness?…

What are the most frequent reasons for indebtedness?

What are the common danger signals of potential debt problems? Elaborate on one of them. Respond to at least 2 classmates.

The 16 Danger Signals of Potential Debt Problems

  1. Paying only the minimum balance each month on credit card bills
  2. Increasing the total balance due each month on credit accounts
  3. Missing payments, paying late, or paying some bills this month and others next month
  4. Intentionally using the overdraft or automatic loan features on checking accounts or taking frequent cash advances on credit cards
  5. Using savings to pay normal bills such as groceries or utilities
  6. Receiving second or third notices from creditors
  7. Not talking to your spouse about money or talking only about money

What is the Consumer Credit Counseling Services (CCCS)?  Find out some interesting information about this topic from the internet and tell your class about it…

Two of ten reasons for indebtedness, as listed by the website bankrate.com, is not reducing expenses to meet a reduction in income, and poor money management.

In conjunction with discussion thread one; the recent economic downturn led many households facing either unemployment or underemployment. I have alluded to this personal experience in last week’s threads, but my husband and I were among the many who experienced this unfortunate effect. In order to cope with the deep gouge our newly-limited income brought, we had to make sacrifices to overcome them. Some expenses we managed to scale back included personal toiletries, school clothing for the children, and even our food choices. Some toiletry examples included using cheaper shampoo alternatives; girls used cheap conditioner or soap instead of shaving cream, and the cheapest laundry detergent on the market at the time…

BUSN380 Personal Financial Planning Course

Week 4 All Students Posts – 83 Pages

Click Here: BUSN380 Course Discussions Week 4

Portfolio Diversification – 38 Pages

Click Here: BUSN 380 Portfolio Diversification

Identify any long-term investment instruments you use or have used in the past (if you haven’t used any, identify those that you are most likely to use). Include any retirement funds established at work and pension/retirement contributions made by your employer. Assess whether or not your overall investment portfolio is efficiently diversified. Why is there a lack of diversification? What steps can you take to modify this? If you plan to invest long term, what steps will you take towards diversification?…

Define in your own words the term “portfolio diversification.”  Find an article about it from a quality business website.  Bring back your findings and discuss it with at least 2 classmates.

Calculating the Amount for an Emergency Fund. Beth and Bob Martin have a total take-home pay of $3,200 a month. Their monthly expenses total $2,800. Calculate the amount the couple needs to establish an emergency fund. How did you calculate this amount?

Determining Interest and Approximate Bond Value. Assume that three years ago, you purchased a corporate bond that pays 9.5 percent. The purchase price was $1,000. Also assume that three years after your bond investment, comparable bonds are paying 8 percent.

  1. What is the annual dollar amount of interest that you will receive from your bond investment?
  2. Assuming that comparable bonds are paying 8 percent, what is the approximate dollar price for which you could sell your bond?
  3. In your own words, explain why your bond increased or decreased in value.

Calculating Rate of Return. Assume that at the beginning of the year, you purchase an investment for $6,000 that pays $80 annual income. Also assume the investment’s value has increased to $6,900 by the end of the year.

  1. What is the rate of return for this investment?
  2. Is the rate of return a positive or negative numbers

Portfolio diversification is the term used when investors “diversify” their investments within their portfolio to help minimize unsystematic risk. Unsystematic risk involves risks that are born under industry or company specific economic fluctuations. For example, discovering a new source of energy that is cheap and clean might displace investments in oil companies. If an investor’s portfolio consists of investments in several different industries, each independent of the other, then those other investments help cushion the blow of the loss in the oil industry investment…

BUSN380 Personal Financial Planning Course

Portfolio Risk – 45 Pages

Click Here: BUSN380 Portfolio Risk Course Discussions

Using the investment portfolio you identified for this week’s first discussion question, informally identify the beta for each of the asset components of this portfolio. Include your reasoning for the betas you have identified. (If you have not formally invested in a portfolio yet, find 3–5 asset components that you would want to invest in as a portfolio, and informally identify the beta for these asset components). Now, identify the overall beta of your investment portfolio and explain how you arrived at this result. What implications can you draw from this exercise? How does each component beta differ from the portfolio beta, and why?…

Define in your own words the term “portfolio risk.”  Find an article about it from a quality business website. Bring back your findings and discuss it with at least 2 classmates.  In your own words, describe the risk-return tradeoff. What are the five components of the risk factor? Describe and provide an example of each. Use the Webliography.

Please take the time to determine the level of investment risk that is acceptable for you and your family. Find a quality website that will allow you to take an investment risk test to see how risky you are. Tell us about your results and conclusions.

Do you think fundamental analysis, technical analysis, or the efficient market hypothesis best describes price movements for the stock market? Why?  Provide an example of a person who supports any one of these theories and state their case.

Portfolio risk is broken down into two different types: systematic and unsystematic. As stated in the other thread, unsystematic risk involves risk that pertains to a specific industry or company. One example that has been in the news recently is the television show The View. In a recent episode, a contestant wished to share her special skill, nursing. The response of the hosts were condemned among the nursing profession, and many others across the nation. As a result, the show has lost viewers, and even ad sponsors Proctor & Gamble. Bad publicity can devalue a company’s share value, which would be considered an unsystematic risk…

BUSN380 Personal Financial Planning Course

Week 5 All Students Posts – 90 Pages

Click Here: BUSN380 Course Discussions Week 5

Payment Obligation – 45 Pages

Click Here: BUSN 380 Payment Obligation

As a percentage of your estimated monthly disposable income (which you identified in Week 2), what proportion is represented by your monthly automobile, mortgage, and/or rental payments? What is the percentage remaining after those monthly expenses have been deducted? Assess and discuss the implications in terms of how they influence your personal financial planning….

What factors commonly influence a person’s daily buying choices?  How does a service contract differ from a warranty? What rights do purchasers of products have even if there is no written warranty?

When might leasing a motor vehicle be appropriate?  Find a special on a leased car from the internet that caught your eye and tell us about it.  Provide links.  What actions are appropriate when buying a used car?  If you had to buy a used car, which one would it be.  Go to cars.com and research this car.  Compare different prices options that you have found.  Identify which option you would choose and why.

There are many scams out there that can impact our financial lives if we fall victim to them.  Has anyone ever been a victim of a scam or fraud?  Describe some situations in which you might use the services of a lawyer.

The factors that influence a person’s buying choices fall into three categories: economic, social, and personal.

An example of economic influence could include inflation. During periods of inflation our money holds lower value, requiring more of it to meet purchase prices. This is particularly a concern when it comes to buying expensive items, such as homes, utilities, and vehicles. Inflation may influence us to hold off on our purchase pursuits until the economy is stabilized, or seek alternatives to buying certain items altogether…

BUSN380 Personal Financial Planning Course

Subsistence Spending – 45 Pages

Click Here: BUSN 380 Subsistence Spending

Suppose you found yourself in a position where your monthly level of income was cut in half. Assume this misfortune will persist for the long term. Discuss the effect such a salary reduction would have on your current lifestyle. What conclusions can you draw? What changes would you make regarding your expenses and how would you implement any new financial strategies?

Analyze the costs and benefits associated with renting. Describe your situation and tell us why you do or do not rent.  Consider the current economic situation. Name the five major steps in the home-buying process.  If you have ever bought a home, please describe your experience in each of these five steps.  If you never owned a home, please describe what impedes you from doing so.

Please name some of the costs associated with purchasing a home.  Do you feel that these costs are justifiable? Why or why not? What are the advantages and disadvantages of owning a home?

Evaluating Motor Vehicle Leases – compare the costs of buying and leasing a motor vehicle. Please use dealer visits, advertisements, and Web sites to obtain information for this activity.

There are many advantages and disadvantages associated with renting versus buying a home. Many of these are due to the number of different housing types that are available. We have always lived in a house, so I will try to analyze these costs and advantages based on this.

The advantages to buying a house versus renting include pride of owning a home, tax benefits, freedom to customize interior, freedom of pet ownership and, of course, the house is an investment asset. The disadvantages can include the financial commitment, being responsible for repairs and replacements, higher expenses, and limited mobility…

Week 6 All Students Posts – 90 Pages

Click Here: BUSN380 Course Discussions Week 6

Insurance Trade-Offs – 43 Pages

Click Here: BUSN380 Insurance Trade Offs

What forms of insurance coverage do you currently carry and pay for? As a percentage of your estimated monthly disposable income (which you identified in Week 2), what proportion do these coverages represent? Are there areas where you feel you are underinsured? Overinsured? What trade-offs are involved in determining the amount of insurance coverage you currently carry? Insurance is a very important financial tool that I feel all of my students need to know the basics at minimum.  Without incorporating insurance into your financial plan, you are setting yourself up for a catastrophe at best.  Let’s start with the fundamentals. How are the most common risks classified?

There are four major methods to manage risk.  What are they?  Provide examples of each. What are the steps in planning your personal insurance coverage?  Please provide an outline of your own personal insurance program using these steps. Be specific.

Set your goals, plan to reach your goals, put your plan into action, and check your results. To put your risk management plan to work, you must answer four basic questions: What should be insured, and for how much? What kind of insurance should be bought, and from whom?  What main coverages are included in home insurance policies? What are the main coverages included in most automobile insurance policies?

The most common risks are classified as either being personal, property, or liability risks. Personal risks are associated with someone’s income and life; property risks deal with loss of personal or real property due to hazards; liability risks are those chances of harming someone else or their property due to negligence…

BUSN380 Personal Financial Planning Course

Lowering Insurance Costs and Risks – 47 Pages

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What strategies might you implement to lower your insurance costs, while at the same time minimizing the risks involved in lowering such coverage? For example, in the area of health insurance, ask whether you are a smoker. In the area of auto insurance, how could your driving habits change?  What is health insurance and what is its purpose?…

What are group health insurance plans and individual health insurance? Can you name the several types of health insurance coverage available under group and individual policies? Provide a discussion of each one. Find an article that relates to this topic from one of the sites provided in the Webliography and discuss its findings with your classmates.

What are the major provisions of a health insurance policy? Provide a discussion of each one. What are the major sources of health insurance and health care? Pick one source and find an article that relates to this topic from one of the sites provided in the Webliography.

Health insurance is designed to protect people against financial crisis due to illnesses, accidents, and disabilities. There are several channels in which health insurance can be obtained. Health insurance can be offered by employers, gained through government programs, or privately purchased. Employers are typically able to offer insurance packages cheaper than private avenues because they receive a group discount…

Week 7 All Students Posts – 84 Pages

Click Here: BUSN380 Course Discussions Week 7

Zero-Based Asset – 41 Pages  

Click Here: BUSN380 Zero Based Asset

U.S. Treasury bills held to maturity have a beta of zero. Why? Discuss the implications of this risk-return trade-off with respect to your overall investment portfolio as you approach retirement age. Are there any assets that you would avoid investing in as you near retirement age? Why is retirement planning important?  Why is retirement planning important to you?  Survey friends, relatives, and other people to get their views on retirement planning ….

What expenses are likely to increase or decrease during retirement?  What are examples of defined-contribution plans? How do they differ from defined-benefit plans?

Three ways to invest in mutual funds offered by investment companies are closed-end fund, exchange- traded funds, and open-ended funds.  Please describe and provide an example of each type.

In your own words, describe the difference between a managed fund and an index fund. Which fund would you choose for your investment program?  Please name and elaborate on the advantages and disadvantages of investing in mutual funds.

Retirement planning is important because we need to be prepared to cover the costs of living when our income is no longer what it once was. After retirement age, we will still have bills to pay. Retirement planning is important to me because, when I come to retirement age, I want to live a financially care-free life. I want to make sure that not only can I cover the essential costs of living, but I also want to be able to travel. Most importantly, I want to make sure I have financial value to bequeath to my children once I am gone…

BUSN380 Personal Financial Planning Course

Home Valuation and Estate Taxes – 43 Pages

Click Here: BUSN380 Home Valuation and Estate Taxes

Discuss the factors that may lead to an appreciation in the value of a home over the next 15 years. Discuss the factors that may lead to depreciation in the value of a home over the next 15 years. How will the value of your home affect the amount of tax to which your estate will be liable subject to your death? What are the four types of taxes that must be considered in planning your estate?

What is a will? Why is it an important estate-planning tool?  Distinguish among the four types of wills. What is included in an estate?  What are the various ways to handle the payment of the estate tax?  Distinguish among the various types of trusts used in estate planning.

Evaluating retirement housing options – which type of housing will best meet your retirement needs? Where will this type of housing be located at (i.e., Florida, Hawaii, your neighborhood).  Make a checklist of the advantages and disadvantages of your housing choice. What are the advantages and disadvantages of real estate investments?  Please elaborate.

The four types of taxes that need taken into consideration while planning your estate are estate taxes, inheritance, gift, and estate and trust federal income taxes.

Estate tax is a tax laid down by the federal government on a deceased person’s right to allocate his or her property at time of death. Estates are treated as individuals who earn income and, therefore, must pay taxes on earnings. This is what is known as the estate and trust federal income taxes. Like tax-paying citizens, tax returns must be filed with the IRS.

On the flip-side of estate tax, inheritance tax is a tax on the receiver’s right to accept the portion of the estate that has been allotted to them. Finally, gift taxes are taxes set out by both the federal and state governments for the privilege of giving gifts to loved ones. However, individuals can give a gift up to a certain amount without tax consequences. My mother and father took advantage of this to help me purchase my home. They gave me a portion of my inheritance early for a down payment on my house, and no taxes were incurred…

BUSN380 Personal Financial Planning Course

Final Exam

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(TCO 1) Marinda Smart is interested in purchasing new appliances for her kitchen that collectively will cost her approximately $5,000. She knows that she could obtain financing for her purchase, but recently heard rumors that there may be layoffs where she works and is concerned about her employment. What type of risk is Marinda concerned about? (Points : 4)

Inflation risk

Interest rate risk

Income risk

Personal risk

Liquidity risk

(TCO 1) The Zarnella family formulated a budget in which it would spend $450 a month on groceries. If the family spent $436 last month, then we could classify this difference as a (Points : 4)



Fixed living expense.

Budget reduction.

Contribution to net worth.

(TCO 1) Which step in the financial planning process is demonstrated by a situation in which Royanne decides to stop traveling through Europe and return back to the States to seek a part-time job and take smaller, less costly trips? (Points : 4)

Developing her financial goals

Identifying alternative courses of action

Evaluating her alternatives

Implementing her financial plan

Reviewing and revising her financial plan

(TCO 1) When you only have to pay taxes on an investment at a future point in time, this is referred to as a(n) (Points : 4)

Cafeteria-style benefit.


Tax-deferred benefit.

Tax-exempt benefit.


(TCO 1) When you take the time to review a variety of job search websites and find 10 potential employment opportunities that fit your skills and abilities, which step in the career planning process have you completed? (Points : 4)

Assess and research personal goals and abilities.

Evaluate the employment market to identify specific employment opportunities.

Develop a resume and cover letter to apply for specific positions.

Interview for specific positions and assess the interview performance.

Evaluate financial and other factors of positions offered.

(TCO 1) Jacob has moved into a home with a large acreage and is now finding that his smaller lawnmower is no longer functional. He needs to purchase a riding mower. How would you categorize Jacob’s goal? (Points : 4)

Consumable-products goal

Durable-products goal

Intangible goal

Intermediate goal

Long-term goal

(TCO 1) A family has a net worth of $175,000 and liabilities of $123,000. What is the amount of its assets? (Points : 4)






(TCO 1) Sherry O’Neal is interested in opening a savings account and her bank offers several types. Her main concern is that she wants to have the ability to withdraw her money whenever she wants. She has an interest in opening an account that is best categorized as (Points : 4)

Money management.

An opportunity cost.

A limited asset.

A liquid asset.

Net worth analysis.

 (TCO 2) An example of _____ would involve a situation in which Judy Smith and Tom Smith each write their daughter a check for $12,500 for graduation, instead of giving her one $25,000 check, so they will not have to pay a gift tax. (Points : 4)


Tax evasion

Tax exclusion

Tax avoidance

Tax-deferred income

BUSN380 Personal Financial Planning Course

 (TCO 2) Your bank statement shows a balance of $870. Your checkbook register shows a balance of $362. You earned interest of $5 and had a service charge of $10. There are no outstanding deposits. What is the amount of outstanding checks? (Points : 4)






(TCO 2) The most liquid type of account would be a (Points : 4)

Certificate of deposit.

Checking account.

Money market account.

Brokerage account.

Share of stock.

(TCO 2) Megan McMillan has just won a Mega Millions lottery. This income would be classified as (Points : 4)

Earned income.

Investment income.

Passive income.

Other income.

Deferred income.

(TCO 3) A _____ will tend to work more with a borrower if he or she is facing legitimate payment problems. (Points : 4)

Credit union

Payday advance company

Finance company

Department store

Commercial bank

(TCO 3) One disadvantage of a store-based gift card is that it (Points : 4)

Looks nothing like typical debit cards.

Has decreased in popularity since the mid-1990s.

Works the same as a credit card.

May be eroded by fees and eventually expire.

Is currently being used for very limited purposes.

(TCO 3) If Jerry Rickland is applying for a loan and the bank determines that he owns a home worth $175,000 and a vacation home worth $125,000, the bank is examining which of the five Cs? (Points : 4)






(TCO 3) If Terry White would default on his loan that he was approved for in order to purchase a Chevrolet, then (Points : 4)

An advance notice would be required before his car was repossessed.

No advance notice would be required before repossession.

The federal consumer credit laws would give him protection from his car being repossessed.

He wouldn’t have to pay the full balance due on his automobile loan.

He would pay 50% of the balance due on his automobile loan.

(TCO 3) All of the following are disadvantages of leasing a vehicle except (Points : 4)

Automatic ownership interest in the car.

Unlimited mileage on the car.

No need to meet credit requirements.
Lease payments are likely to be lower than loan payments.

All of the other answers are advantages.

 (TCO 3) An example of a credit bureau would be (Points : 4)


the Better Business Bureau.



 (TCO 3) If Anthony Fontain makes a decision to accept a variable-rate loan instead of a fixed-rate loan, he is _____ with the lender and reducing the lender’s risk. (Points : 4)

Sharing the interest rate risk

Increasing his monthly payments

Taking a larger stake in the asset he is purchasing

Repaying the loan over a faster period of time

Pledging collateral

(TCO 5) A(n) _____ market is one in which financial securities are purchased using an investment bank. (Points : 4)






(TCO 5) ABC Corporation has assets that total $15 million and liabilities that total $4 million. It also has 500,000 shares of stock outstanding. What is ABC’s book value per share? (Points : 4)






(TCO 5) When researching current price information for a bond or stock investment, the most readily available source of information for most consumers can be found within (Points : 4)

The daily newspaper.

Government publications.

Corporate reports.

Investor newsletters.

Business periodicals.

(TCO 5) A characteristic of serial bonds is that they (Points : 4)

Will pay no interest payments.

Will have varying issue dates.

Will have a series of maturity dates.

Cannot be called.

Will all mature 10 years from the date of issue.

BUSN380 Personal Financial Planning Course

(TCO 5) If Hugh is considering a risky investment that can provide him with a large profit in a short amount of time, most likely, he is interested in investing in (Points : 4)

U.S. Treasury bills.

Certificates of deposit.

Low-growth stocks.

Speculative stocks.

Low-risk bonds.

 (TCO 5) If a corporation is facing a cash shortfall, _____ would be paid first. (Points : 4)

Dividends to common stock owners

Cash to buy shares of stock from shareholders

Cash to buy bonds from current bondholders

Interest to bond owners

Dividends to preferred stock owners

(TCO 5) _____ involves the analysis of charts and historical data in order to make stock purchasing decisions. (Points : 4)



Efficient market



(TCO 5) Dave Harris has just purchased a bond with a face value of $1,000 that pays 6%. The purchase price of the bond was $900, and the bond will mature in 5 years. What is the yield to maturity for this bond? (Points : 4)






 (TCO 5) What is the current yield for a $1,000 corporate bond that pays 9% and has a current market value of $825? (Points : 4)






 (TCO 1) Melba Anderson has a document that allows her new microwave to be repaired or replaced within a certain time frame if it stops working. She has a (Points : 4)




Rain check.

Class action suit.

(TCO 3) When a loan is made based on the equity value of a home and the loan provides a homeowner with tax-free income until the home is sold (to pay back the loan), this is called a(n) (Points : 4)

Conventional mortgage

Growing equity mortgage

Second mortgage

Reverse mortgage

Adjustable-rate mortgage

(TCO 3) A credit purchase with 24 monthly payments of $80 and a down payment of $125 would have a total cost of (Points : 4)






BUSN380 Personal Financial Planning Course

 (TCO 4) Your home insurance policy has a $500 deductible. If a windstorm causes $2,500 of damage to your home, what amount of the claim would the insurance company pay? (Points : 4)






(TCO 4) A(n) _____ is an addendum to a life insurance policy that can add additional benefits, such as an accidental death benefit payable to a beneficiary. (Points : 4)

Accelerated benefits clause

Policy dividend

Guaranteed insurability clause

Second-to-die rider

Double indemnity rider

(TCO 4) John Brown owns a home in Oakland, California and because of the risk of earthquakes, he decides to purchase _____ to cover potential losses. (Points : 4)

Building and other structures

Additional living expenses

Personal property

Personal liability

Specialized coverage

(TCO 4) Martina has a policy that includes a $500 deductible and a coinsurance provision requiring her to pay 10% thereafter. Her medical bills total $5,500. What amount is she required to pay personally? (Points : 4)






(TCO 4) _____ is a healthcare institution that directly contracts with specific medical care specialists in order to provide healthcare services in exchange for a fixed, prepaid monthly premium. (Points : 4)

Blue Cross

Blue Shield




 (TCO 4) If Larry has a term life insurance policy that is _____, this means that the payments to his beneficiaries would become smaller over time. (Points : 4)






(TCO 6) If Wilson Fischer has purchased 10 rare silver coins from a broker, he is investing in (Points : 4)

Direct investment in real estate.
Indirect investment in real estate.

Precious metals.



BUSN380 Personal Financial Planning Course

(TCO 6) The Capitalist Mutual Fund’s net asset value is $28.25. The fund has liabilities of $3 million and 1,600,000 shares have been issued. What is the value of the fund’s portfolio? (Points : 4)

$42 million

$45.2 million

$48 million

$48.2 million

$3 million

(TCO 6) A mutual fund that invests in companies with a market capitalization of less than $2 billion is called a(n) (Points : 4)

Socially responsible fund

Sector fund

Small-cap fund

Index fund

Growth fund

(TCO 6) One disadvantage associated with real estate investments is that an investor must
face (Points : 4)

Lack of involvement in property maintenance

A hedge against inflation


Lack of financial risk

Possible high capital requirements for total venture

 (TCO 6) If Jeremiah’s employer makes nontaxable contributions to a plan in his name and his salary is reduced by the same amount, Jeremiah has a (Points : 4)

Money-purchase pension plan

Stock bonus plan

Profit-sharing plan

Defined benefit plan

403(b) plan

(TCO 6) Jasmine owns a vehicle worth $25,000 and a home worth $225,000. She has a checking account balance of $500, a savings account balance of $1,500, and a mutual fund worth $85,000. Her personal assets are worth $90,000. She still owes $10,000 on her car, $100,000 on her home, and $1,000 on her credit card. What is Jasmine’s net worth? (Points : 4)






(TCO 7) The benefits of establishing a trust include the fact that (Points : 4)

It can reduce or provide payment for estate taxes

It can allow you to avoid probate and transfer assets immediately to beneficiaries

It can free you from managing your assets, while providing you a regular income

It can ensure that your property serves a desired purpose after you die

All of the above

(TCO 7) Marion would be acting in the capacity of a(n) _____ if she is selected to manage the assets of her 16-year-old niece until the niece reaches the age of 21. (Points : 4)






BUSN380 Personal Financial Planning Course

(TCO 1) Your brother-in-law has come to you in confidence expressing a concern with managing his finances. Your initial recommendation is that he consider using a budget. How would you explain the purpose of a budget and what would you suggest that he take into consideration in order for the budgeting process to be successful? (Points : 10)

Click Here: Your Brother in Law Has Come to You

Having a budget would be critical to help manage one’s finances effectively.  A budget helps to control…

(TCO 2) What are the advantages of a Roth IRA? (Points : 10)

Click Here: What Are the Advantages of a Roth IRA

A Roth IRA is a special retirement account where one can purchase common security types such as stocks or…

(TCO 3) Carla Brown wants to know what price home she can afford. Her annual gross income is $45,000. She owes $1,050 per month on other debts and expects her property taxes and homeowners insurance to cost $250 per month. She knows she can get a 5.0%, 30-year mortgage, so her mortgage payment factor is 5.37. She expects to make a 20% down payment. What is Carla’s affordable home purchase price? Assume a lender will use a 38% monthly gross income guideline. Round your answer to the nearest $100. (Points : 10)

Click Here: Carla Brown Wants to Know What Price Home

Lender assumes Carla can afford to spend 38% of her gross income for mortgage payment/ expenses: $45,000….

(TCO 3) Identify two or three sources of consumer credit and discuss the advantages and disadvantages of each type selected. (Points : 10)

Click Here: Identify Two or Three Sources of Consumer Credit

The two common sources of consumer credit are commercial banks and…

(TCO 5) Clayton and Barbara Patterson were married immediately after graduating from college and have been married for 20 years. They both started investments early in life, but the majority of their funds were placed in speculative stock funds. Their portfolios performed well until the last few years, when they faced losses due to an economic downturn. Explain how asset allocation could have helped the Pattersons. (Points : 10)

Click Here: Clayton and Barbara Patterson Were Married

Asset allocation is a method of ensuring that one’s investments are placed in various types of assets that can…

(TCO 7) When completing the process of estate planning, what federal and state tax considerations must be taken into account? (Points : 10)

Click Here: When Completing the Process of Estate Planning

One of the main objectives of estate planning is to maximize or preserve the value of family assets that will….

BUSN380 Personal Financial Planning Course