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Please refer to the graph.  If the isocost line to the left is before input cost changes, which of the following is true

The key to achieving financial success and financial peace of mind is establishing and living within a zero-based budget 

Calculating, Assessing Financial Standing Ratios Calculate the financial standing ratios using the following information:   Total Assets                                                                 $ 1,500,000 Total Liabilities                                                            $ 1,200,000 Cash/Savings (included in total assets)                 $       16,000   Gross Income                                                               $     15,000 Income Taxes                                                               $        3,000 Living Expenses                                                          $         4,000 Debt Payments:     Home                                                                        $         7,500   ($1,000,000 loan)     Credit Card                                                              $            700    ($60,000 balance)     Car                                                                             $            800    ($75,000 loan) Total Debt Payments                                                  $        9,000   Monthly savings                                                          $          300  Budget                                                                          Not currently budgeting   Financial Ratio                               Your Answer      Calculation     Net Worth                                                                    Total assets minus total liabilities                                                                                         Guideline = positive net worth; evaluate size, debt, liquidity   Net Cash Flow (NCF)                                                   Gross Income minus taxes, living expenses, debt payments = NCF                                                                                           Guideline = positive net cash flow for allocation to prioritized goals   Liquidity Ratio                                      months            Cash/savings divided by monthly expenses and debt payments                                                                                            Guideline = 6 months coverage                     Mortgage Debt Service Ratio               %                    Housing payment divided by monthly gross income                                                                                             Guideline = no > 28% debt ratio   Debt Service Payment Ratio                %                      Monthly total debt payments divided by monthly gross income                                                                                              Guideline: no > 36% debt ratio   Savings Ratio                                          %                       Monthly savings divided by monthly gross income                                                                                              Guideline 15%  Which FSR’s need improvement:                                                        Yes        No Net Worth/Liquidity Net Cash Flow Liquidity Ratio Mortgage Ratio Total Debt Ratio Savings Ratio  

Deregulated vs Regulated Financial Markets 4 Ideologies  1. Free market 2. Lowly regualted 3. Balanced 4. Highly regulated Questions (a) Which ideology do you believe in, explaining/defending your postion (b) Has your view changed as a result of knowing more about financial crises, explaining why or why not   

Which of the 5C’s is the most important directly impacting all the other C’s, explaining why? Character (FICO) Capacity (Debt Ratios) Capital (Net Worth) Collateral (Pledged) Condtions (Job, Economy)  

Trying to time the market is a recommended investment strategy?  Why or why not?

5C’s of Credit Underwriting Consumer Loans Instructions: evaluate the borrower profiles to approve or decline a loan request for buying a home Borrower Profile (1) Underwriting Factor 750 FICO 28% Home Debt Ratio 36% Total Debt Ratio High Net Worth 3 Mo. Cash Emergency Fund in Place Moderate Retirement Savings 20% Down Payment 80% Loan to Value Ratio Accountant 15 Years (H) Nurse 15 Year (W) Satisfactory Economic Conditions 2 Children saving for college Approve or Decline (Underline Your Answer)   Borrower Profile (2) Underwriting Factor 600 FICO 45% Home Debt Ratio 55% Total Debt Ratio Low Net Worth No Cash Emergency Fund in Place Low Retirement Savings 5% Down Payment 95% Loan to Value Ratio Accountant 3Years (H) Nurse 2 Year (W) Satisfactory Economic Conditions 1 Child not saving for college Approve or Decline (Underline Your Answer)   Borrower Profile (3) Underwriting Factor 700 FICO 32% Home Debt Ratio 40% Total Debt Ratio Moderate Net Worth 2 Mo. Cash Emergency Fund in Place Low Retirement Savings 20% Down Payment 80% Loan to Value Ratio Accountant 10 Years (H) Nurse 8 Years (W) Satisfactory Economic Conditions 3 Children limited college savings  Approve or Decline (Underline Your Answer)  

Monetary and interest rate policy is monitored, managed, and implemented by the FED to achieve it’s Congress aproved dual mandate of maintaining price stability and full employment 

Corporate ESG (Environmental, Social, Governance) (1) Do you believe it should be a choice or responsibility, explaining your postion (2) Do you believe the Fermainan Business School curriculum aligns with ESG, explaining why or why not?

401(k) plans allow withdrawals for buying a home, medica, and education.  Should withdrawals be taken these purposes?  Why or why not?