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Free Practice Quiz Question List

10 Long-Term Financial Planning Online Quiz Questions

Use this free practice quiz with 20 questions to review 10 Long-Term Financial Planning, test your knowledge, and prepare for your next test or exam.

20 questions
01
True or false
1 point

True or false: A long-term financial plan should be reviewed at least once a year and after major life changes, such as a new job or a move.

  1. A

    True

  2. B

    False

02
Choose one
1 point

Which statement best describes what diversification can do for a long-term investment portfolio?

  1. A

    Diversification guarantees that an investment portfolio will not lose value.

  2. B

    Diversification can spread investment risk but cannot eliminate it.

  3. C

    Diversification ensures that returns will keep pace with inflation.

03
Fill in the blank
1 point

A useful financial plan connects each goal to a deadline, a funding method, and a way to track progress, as well as its .

04
Choose one
1 point

Jordan expects to use savings for a home purchase in about a year. Which approach best fits the short time horizon?

  1. A

    Invest the money in a high-risk portfolio because it may earn more.

  2. B

    Keep the money in accessible, lower-risk savings.

  3. C

    Use long-term investments and plan to sell them whenever the expense is due.

05
Written response
1 point

A person wants to save $24,000 for a home purchase in four years. If no interest or investment growth is counted, how much must they save each month?

06
Choose all
1 point

Which factors can make retirement estimates differ from what actually happens? Select all correct answers.

  1. A

    How long retirement lasts

  2. B

    Whether a planned vacation is enjoyable

  3. C

    Inflation

  4. D

    Investment returns

07
Fill in the blank
1 point

Medicare generally does not pay for long-term care.

08
Written response
1 point

Which U.S. agency provides account tools for estimating Social Security benefits based on an individual's earnings record?

09
True or false
1 point

True or false: A routine review of a long-term financial plan is a reason to react to every market fluctuation.

  1. A

    True

  2. B

    False

10
Choose one
1 point

When estimating how much personal saving may be needed in retirement, what does the term “income gap” refer to?

  1. A

    The amount of debt remaining when work ends.

  2. B

    The difference between current income and current spending.

  3. C

    The difference between estimated retirement expenses and likely retirement income.

11
Choose all
1 point

During an annual financial-plan review, which actions are appropriate? Select all correct answers.

  1. A

    Update income, spending, savings, debt, and investment balances.

  2. B

    Check goal dates, estimated costs, and progress.

  3. C

    Change investments in response to every market fluctuation.

  4. D

    Review insurance coverage, beneficiaries, and essential estate documents.

12
Choose one
1 point

Maya needs a specific amount for education costs by a fixed date. Which planning approach best addresses the risk that investments may not grow as expected?

  1. A

    Invest all the savings in assets that could fluctuate, since returns may be higher.

  2. B

    Avoid depending on uncertain investment gains to cover the essential amount.

  3. C

    Borrow the full amount without comparing interest or fees.

13
Open ended
1 point

Explain how to estimate a retirement income gap and how that estimate can guide personal saving. Include examples of expenses and likely income sources, and describe one reason the estimate may change.

14
True or false
1 point

A long-term financial plan should be treated as a prediction that income, needs, and priorities will stay unchanged. True or false?

  1. A

    True

  2. B

    False

15
Choose one
1 point

A person expects to use some savings for a necessary expense soon. Which approach best fits the material?

  1. A

    Invest it in assets that may fluctuate substantially, because long-term growth is always the priority.

  2. B

    Keep it in lower-risk, accessible savings.

  3. C

    Use it to increase contributions to long-term investments, regardless of the deadline.

  4. D

    Borrow the money when the expense comes due.

16
Choose one
1 point

What can diversification do for a long-term investment plan?

  1. A

    It guarantees a positive return over time.

  2. B

    It removes the need to consider an investor’s time horizon.

  3. C

    It can spread investment risk but cannot eliminate it.

  4. D

    It prevents investments from fluctuating in value.

17
Written response
1 point

Which federal agency provides account tools with Social Security benefit estimates based on an individual’s earnings record?

18
Choose one
1 point

A household’s budget cannot fully fund every goal at once. Which response best reflects the planning approach described in the material?

  1. A

    Divide available savings equally among every goal, regardless of circumstances.

  2. B

    Use a budget to see the trade-offs, protect basic needs, build a cushion, and address high-interest debt while contributing what is feasible to longer-term goals.

  3. C

    Stop saving for every long-term goal until all debt is paid off.

  4. D

    Use investment returns to avoid making trade-offs between goals.

19
Choose one
1 point

A person wants to save $24,000 for a home purchase in four years. If no interest or investment growth is counted and contributions are made monthly, how much should they save each month?

  1. A

    $500 per month

  2. B

    $400 per month

  3. C

    $600 per month

  4. D

    $2,000 per month

20
Written response
1 point

What term describes the remaining difference when estimated retirement living expenses are compared with likely income from sources such as Social Security and pensions?