Course: FIN3001EF Personal Financial Planning
1. State 4 advantages of personal financial planning.
2. What are the steps involved in the financial planning process?
3. What are the purposes of personal financial statement?
4. Which 4 budget systems are common to use?
5. What are the two basic types of credit? Give an example for each.
6. What is consumer credit?
7. What are the Five Cs of Credit?
8. What are the danger signals to show you are in debt problems ?
9. State 4 types of health care coverages?
10. What is the whole life policy and one of policy options given?
11. What is the definition of life insurance, and the purpose of the life insurance?
12. Explain what role(s) are you playing in the investment process?
13. What is the difference between straight-life annuity and joint-and-survivor annuity?
14. What are the ways to manage risk?
15. What are the 5 components of risk factor?
16. What is the difference between Pure Risk and Speculative Risk?
17. How does tax avoidance differ from tax evasion?
18. What are the characters of taxation system in Hong Kong?
19. What is the different between the guardian and trustee?
20. What are the responsibilities of an Executor?
1. Use the items in the following table to calculate the ratios required:
Liquid assets $2,200
Monthly credit payments $150
Monthly savings $130
Net worth $36,000
Current liabilities $550
Take-home pay $900
Gross income $1,500
Monthly expenses $850
2. Use the following items to prepare a balance sheet and a cash flow statement. Determine
the total assets, total liabilities, net worth, total cash inflows, and total cash outflows.
Rent for the month, $650 Monthly take-home salary, $1,950
Cash in checking account, $450 Savings account balance, $1,890
Spending for food, $345 Balance of educational loan, $2,160
Current value of automobile, $7,800 Telephone bill paid for month, $65
Credit card balance, $235 Loan payment, $80
Auto insurance, $230 Household possessions, $3,400
Stereo equipment, $2,350 Payment for electricity, $90
Lunches/parking at work, $180 Donations to church, $70
Home computer, $1,500 Value of stock investment, $860
Clothing purchase, $110 Restaurant spending, $130
Total assets =
Total liabilities =
Net worth =
Total cash inflows =
Total cash outflows =
3. Based on the following data, calculate the ratios requested:
Net worth $48,000 Take-home pay $2,600
Gross income $2,850 Current liabilities $950
Monthly credit payments $540 Liquid assets $5,200
Liabilities $7,000 Monthly savings $180
i. Debt ratio:
ii. Current ratio:
iii. Debt-payment ratio:
iv. Saving ratio:
4. Based on the following data, calculate the ratios requested:
Long-term liabilities $854,321 Net worth $1,448,000
Liquid assets $55,200 Current liabilities $45,650
Mortgage repayment $84,000 Mortgage loan outstanding $555,234
Credit card repayments $5,540 MPF $12,000
Interest earned on savings $150 Gross income $281,850
Car loan repayment $38,087 Property market value $685,483
i. Debt-payment ratio:
ii. Debt-to-equity ratio:
5. What would be the 6-month’s interest earnings for a person who deposits $2,000 monthly in
savings at an annual interest rate of 5.5 percent?
6. If a person spends $100 a week on coffee (assume $5,200 a year), what would be the future
value of that amount over 3 years if the funds were deposited into his savings account
earning interest of 4 percent per annum (interest will be paid twice a year in 6th and 12th
7. You plan to open a fast food shop after 3 years and $150,000 of capital is required. You
decide to deposit a lump sum of money into a time deposit with every 3-month's renewal.
The interest rate is 3.5%p.a. How much the lump sum of money does you need to deposit?