Test your knowledge.

Question 1:
The main steps in the financial planning process are:

A - Defining your goals, Creating a plan, Selecting investment, Implementing the plan, Monitoring and reviewing the plan. - false
B - Assessing your current financial picture, Defining your goals, Creating a plan, Implementing the plan, and Monitoring and reviewing the plan. - true
C - Assessing your current financial picture, Creating a plan, Buying life insurance, Monitoring and reviewing the plan. - false

Note: The main steps in the financial planning process are Assessing your current financial picture, Defining your goals, Creating a plan, Implementing the plan, and Monitoring and reviewing the plan.

Question 2:
Net worth is defined as:

A - Your income minus your liabilities - false
B - Your gross income minus your expenses - false
C - Your assets minus your liabilities - true

Note: Net worth is defined as your assets minus your liabilities.

Question 3:
Net income is defined as:

A - Your income minus your liabilities - false
B - Your gross income minus your expenses - true
C - Your assets minus your liabilities - false

Note: Net income is defined as your gross income minus your expenses.

Question 4:
Net worth and net income:

A - Are measures of your future growth - false
B - Are determinants of how much insurance you will need - false
C - Allow you to determine where you are currently - true

Note: Net worth and net income allow you to determine where you are currently.