The Process of Financial Planning Requires the Individual to

question 5

Multiple Choice

The process of financial planning requires the individual to
1. establish financial goals and objectives
2. identify and quantify the value of his or her assets
3. hire professional financial advisors

• A)1 and 2
• B)1 and 3
• C)2 and 3
• D)all of the above

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Definitions:

Equal Cash Flow

Recurrent inflow or outflow of cash that is the same in amount for each period.

Annuity

A financial product that pays out a fixed stream of payments to an individual, typically used as part of retirement planning.

Sensitivity Analysis

A technique used in financial modeling to determine how different values of an independent variable affect a particular dependent variable under a given set of assumptions.

Residual Value

The estimated value of a fixed asset at the end of its useful life, important for calculating depreciation.