SOLUTION MANUAL Personal Finance, 14th Edition By E. Thomas Garman, Chapter 1 - 17
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SOLUTION MANUAL Personal Finance, 14th Edition
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SOLUTION MANUAL Personal Finance, 14th Edition
SOLUTION MANUAL
Personal Finance, 14th Edition
By E. Thomas Garman, Chapter 1 - 17
SOLUTION MANUAL
Personal Finance, 14th Edition
By E. Thomas Garman, Chapter 1 - 17
SOLUTION MANUAL
Personal Finance, 14th Edition
By E. Thomas Garman, Chapter 1 - 17
SOLUTION MANUAL
Personal Finance, 14th E...
LO1.1 Recognize the keys to achieving financial success.
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1. Explain the five steps in the financial planning process.
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Answer: There are five fundamental steps to the personal financial planning process: (1)
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evaluate your financial health to your education and career choice; (2) define your financial
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goals; (3) develop a plan of action to achieve your goals; (4) implement spending and saving
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plans to monitor and control progress toward your goals; and (5) review your financial
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progress and make changes as appropriate.
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2. Distinguish among financial success, financial security, and financial happiness.
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Answer: Financial success is the achievement of financial aspirations that are desired,
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planned, or attempted. Success is defined by the individual or family that seeks it. Financial
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success may be defined as being able to live according to one’s standard of living. Financial
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security is that comfortable feeling that your financial resources will be adequate to fulfill any
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needs you have as well as your wants. Financial happiness is the experience you have when
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you are satisfied with money matters. People who are happy about their finances will see a
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spillover into positive feelings about life in general.
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3. Summarize what you will accomplish studying personal finance. yy yy yy yy yy yy yy
Answer: Several things can be accomplished by studying personal finance. Recognize how to
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manage unexpected and expected financial events. Pay as little as possible in income taxes.
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Understand how to effectively comparison shop for vehicles and homes. Protect what we own.
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Invest wisely. Accumulate and protect the wealth that we may choose to spend during our non-
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working years (e.g., retirement) or donate.
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4. What are the building blocks to achieving financial success?
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Answer: The building blocks for achieving financial success include a foundation of regular
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income that provides the means to support your lifestyle and save for desired goals in the
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future. The foundation supports a base of various banking accounts, insurance protection, and
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employee benefits. Then we can establish goals, a recordkeeping system, a budget, and an
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emergency savings fund. We will also manage various expenses such as housing,
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transportation, insurance, and the payment of taxes. We will also need to handle credit,
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savings, and educational costs. Finally, we invest in various investment alternatives such as
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mutual funds, stocks, and bonds, often for retirement. As a result of all these building blocks,
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we are more apt to have a financially successful life.
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LO1.2 Understand how the economy affects your personal financial success.
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1. Summarize the phases of the business cycle. yy yy yy yy yy yy
Answer: The business cycle entails a wavelike pattern of rising and falling economic activity as
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measured by economic indicators like unemployment rates or the gross domestic product. The
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