MCS 2100 Study Guide - Final Guide: Money Market Account, Financial Plan, Savings Account

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Document Summary

Personal financial planning: the process of managing your money to achieve personal economic satisfaction. Increased effectiveness in obtaining, using, and protecting your financial resources throughout your lifetime. Increased control of your financial affairs by avoiding excessive debt, bankruptcy, and dependence on others for economic security. Improved personal relationships resulting from well-planned and effectively communicated financial decisions: a sense of freedom from financial worries obtained by looking into the future, anticipating expenses, and achieving your personal economic goals. Interest rate risk: changing interest rates affect your cots when you borrow, and your benefits when you invest. Inflation risk: rising prices cause lost buying power. Liquidity risk: some investments may be more difficult to convert to cash or to sell without significant loss in value. Product risk: products may be flawed or services may not meet your expectations. Risk of death: premature death may cause financial hardship to family members left behind.

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