Concept Of Financial Planning - Ch 1

20 Questions | Total Attempts: 4448

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Concept Of Financial Planning - Ch 1

This quiz is designed based on the Concept of Financial Planning - Chapter 1


Questions and Answers
  • 1. 
    Definition of Financial Planning is
    • A. 

      “Financial Planning is the process of meeting one’s life goals through the proper management of personal finances.”

    • B. 

      “Financial Planning is the process of meeting one’s life goals.”

    • C. 

      “Financial Planning is the proper management of personal finances.”

    • D. 

      None of the above

  • 2. 
    Number of steps of financial planning are
    • A. 

      4

    • B. 

      5

    • C. 

      6

    • D. 

      7

  • 3. 
    The first step of financial planning process is
    • A. 

      Gathering client data, including goals

    • B. 

      Analyzing and evaluating current situation and needs

    • C. 

      Establishing and defining client relationship

    • D. 

      Implementing the recommendations

  • 4. 
    The last step of financial planning process is
    • A. 

      Gathering client data, including goals

    • B. 

      Monitoring and reviewing the Financial Plan

    • C. 

      Analyzing and evaluating current situation and needs

    • D. 

      Developing and presenting recommendations

  • 5. 
    This is not the most "common" life goals are
    • A. 

      Children’s future including education and marriage

    • B. 

      Corpus for starting own business

    • C. 

      Buying a house

    • D. 

      Comfortable Retirement

  • 6. 
    While offering solutions to clients, the following aspects of personal finance need not be analysed as a whole rather than seeing them in isolation
    • A. 

      Income

    • B. 

      Expenses

    • C. 

      Risk Tolerance

    • D. 

      Estate

  • 7. 
    Common factors which have compelled people to seek professional financial advisory services inculde
    • A. 

      Longer life span and lack of social security

    • B. 

      Proliferation of numerous products

    • C. 

      All the above

    • D. 

      None of the above

  • 8. 
    Scope of Advsory Services include
    • A. 

      Insurance Planning

    • B. 

      MF Planning

    • C. 

      Currency Planning

    • D. 

      Derivative Planning

  • 9. 
    Net Worth is
    • A. 

      Assets + Liabilities

    • B. 

      Assets + Liabilities - Existing Insurance

    • C. 

      Assets - Liabilities + Existing Insurance

    • D. 

      Assets - Liabilities

  • 10. 
    Cash and cash equivalents are example of
    • A. 

      Cash Flows

    • B. 

      Net worth

    • C. 

      Liabilities

    • D. 

      Assets

  • 11. 
    Short-term investments — include investment options bought and held for sale or till maturity for a period of
    • A. 

      Upto 3 months

    • B. 

      From 3 months to a year

    • C. 

      Upto 3 years

    • D. 

      None of the above

  • 12. 
    Land normally is considered
    • A. 

      Liquid assets

    • B. 

      Short-term investments

    • C. 

      Long-term investments

    • D. 

      Medium term investments

  • 13. 
    Difference between physical and financial assets is basis 
    • A. 

      Tangibility

    • B. 

      Riskiness

    • C. 

      Both the above

    • D. 

      None of the above

  • 14. 
    Three categories of Financial Assets are
    • A. 

      Liquid, Metals, Equity

    • B. 

      Equity, Liquid, Fixed Income

    • C. 

      Real Estate, Equity, Fixed Income

    • D. 

      Commodities, Equity, Debt

  • 15. 
    Home Loans are example of
    • A. 

      Current Liability

    • B. 

      Current Assets

    • C. 

      Common Assets

    • D. 

      Common Liabilities

  • 16. 
    There are tax sops are available for
    • A. 

      Car loans

    • B. 

      Card Loans

    • C. 

      Personal Loans

    • D. 

      Home Loans

  • 17. 
    Which of the following statements is true
    • A. 

      An Income and Expenditure statement shows the incomes and expenses incurred for a particular time period

    • B. 

      An Income and Expenditure statement shows the incomes and expenses incurred for a particular point in time

    • C. 

      Rental income is a expenditure

    • D. 

      Insurance premiums are example of sources of income

  • 18. 
    This ratio indicates what percentage of assets are cash or can be converted into cash within a short period.
    • A. 

      Saving Ratio

    • B. 

      Debt Equity Ratio

    • C. 

      Liquidity Ratio

    • D. 

      Return on Equity

  • 19. 
    This factor does not affect the risk profile of a customer
    • A. 

      Investor’s age

    • B. 

      Family situation

    • C. 

      Food habits

    • D. 

      Current financial picture

  • 20. 
    Normally, how many months’ expenses should be put aside so that they can be liquidated at a short notice
    • A. 

      0-3 months

    • B. 

      4-6 months

    • C. 

      7-9 months

    • D. 

      6-12 months

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