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1.
Risk management is typically covered in a professional financial plan because _______.
Risk can destroy your wealth. That is why insurance is included in most financial planning.
2.
Which step of financial planning typically calls for creating financial statements?
Analyzing and evaluating your financial status. This is the stage where you draw up a picture of your financial status based upon data gathered previously.
3.
Good financial planning is methodical in nature.
True. It uses a set of measurable, defined procedures to create a picture of your financial life.
4.
What financial planning tool helps you plan your spending?
Budget. A budget is a powerful tool that is usually part of any financial plan.
5.
When you work with a financial planner, he or she will draw up a document that expresses your net worth. What is this document called?
Balance sheet. More specifically, it is called a personal balance sheet. It expresses your assets, your liabilities, and your ultimate net worth.