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If asked the question, "What has been the most significant development in communication over the past decade?" who would not select the Internet? In only a few years, this new medium has revolutionized the way information is gathered and used, the way people communicate with each other, and how learning takes place. Practically every college and university is deeply involved in using the Internet in all conceivable applications, a trend we have followed carefully, and one that we aspire to be on the cutting edge. Equally important, virtually every student uses the Internet with as much ease as they use a telephone.
Unfortunately, to the uninformed the Internet seems a dense jungle of unidentified fruits. Whereas in the beginning there may have been too few Internet sites, now the problem is there are far too many. In any particular area, such as personal finance, students need something to organize these sites into a directed and cohesive learning machine. This is the critical role our textbook plays.
In the text's fourth edition, we incorporated the Internet primarily through the use of our Internet guide, Personal Finance on the Internet: An Interactive Guide. Adopters' and students' responses have been so overwhelming that we decided to not only continue to supplement the text with the Internet Guide but also to thoroughly integrate this fifth edition with the Internet. The "Net" is now a part of the text through our Topic Links, and what a part it is! With Topic Links, you, the instructor, can help design each topic in each chapter. Would you like your students to delve more deeply into common stock analysis? No problem, just direct them to the Winger/Frasca Web site, www.prenhall.com/winger, where they can easily access the chapter and the Web links that you select. The topics and the links are connected in every chapter. Equally important to you, these sites are reviewed and updated regularly by the authors, so your lesson plan is always current and always available. It really is difficult not to be overly excited about the expanded opportunities the Internet provides.
This fifth edition also reflects important changes in the financial environment. Many changes have been made to reflect the new mood of self-reliance, update the material, clarify explanations, and sharpen the decision-making focus. Moreover, the text's outline and topic development have been thoroughly revised to reflect important changes.
Part 1 presents a basic framework to help individuals plan their financial futures by focusing on organizing and managing personal financial resources. Part 2 covers insurance planning and stresses the importance of protecting financial resources. Part 3 explains the importance of effective investing to grow financial resources over time. And Part 4 covers the basic reason why financial planning is important to enjoy our financial resources, both currently and in the future.
We believe the text's current organization works best in most classroom situations; however, the major parts can certainly be rearranged to accommodate other teaching plans. Moreover, most chapters are self-contained and can easily be omitted. The text is very flexible, and instructors will have no difficulty in selecting material for their specific course developments.
Although coverage is flexible, we have continued the text's tradition of providing thorough topical discussions and analyses. It is our belief that a text in any discipline owes its adopters the type of coverage, allowing them the option to cover a topic in less depth if they so choose. Personal financial planning is not easy, and we do our students a disservice if we present it as such.
Distinguishing Features
Decision-Making Approach We continue using a four-part approach to decision making that involves setting goals, listing alternatives, measuring performance, and evaluating achievement. Important in this process are the concepts of opportunity costs and marginal analysis. These topics are introduced and explained in Chapter 1 and are used extensively throughout the text.
An Emphasis on Risk and Return At the core of financial decision making is the balancing of risk and return. This concept applies in particular to investments, but it is also useful in other decisions that involve uncertainty; thus, there is an expanded discussion of risk management in the insurance section. In the investment section, we treat risk in such a way that students can use the concept when making investment decisions. Readers thus gain a practical tool as well as an understanding of the basic principles.
Integration with the Internet As previously noted, the Internet is thoroughly integrated throughout the fifth edition text. Each book comes with Personal Finance on the Internet: An Interactive Guide. With these supplementary Internet exercises, students use their individual financial data to create a personal portfolio for their long-term financial planning. New to this edition are the Topic Links, which you will find identified in the margins throughout each chapter. Whenever you see the Topic Links icon go to the Winger/Frasca Web site, www.prenhall.com/winger for a wealth of related Web sites.
A Focus on the Time Value of Money The growing importance of achieving long-term goals through investing has increased the need for students to grasp the time value of money. New to this edition: An expanded coverage of the topic begins in Chapter 1 and appears in all later chapters where time-value-of-money techniques are needed in making important decisions. Our explanation and use of these techniques are simple and well within the grasp of most students.
The Use of Action Plans An action plan is a written, step-by-step approach to solving a financial problem. The use of action plans encourages students to think analytically about problems, rather than memorizing answers. New to this edition: All action plans developed in previous editions have been revised and updated to reflect changes in the financial environment.
An Illustrative Family As part of the decision-making approach, we continue to highlight a typical American family, the Steeles. Their financial situation is far from perfect, and, like most of us, they make mistakes. New to this edition: The Steeles' financial situation has been updated and revised. They still manage to live a reasonably comfortable and financially secure life, but they are encountering growing financial pressures as they consider their future needs to educate their children and to provide an income for themselves in retirement. The Steele family appears in nearly every chapter, where they encounter problems common to most families. As they deal with them and make decisions, so does the reader. In many cases, an action plan details a concrete approach to the problem, allowing the student to participate in solving it.
Boxed Features Each chapter contains featured items that have been selected specifically for this edition to add interest and to provide background. All boxes have been selected to fit into three themes: Saving Money, Simplifying Financial Planning, and Personal Finance News. These themes focus student attention and often include practical and useful information.
Marginal Notes The text is enhanced by marginal notes. All marginal notes provide key term definitions, which would benefit students in understanding concepts and preparing for exams.
The Use of Color, Graphics, and Other Visual Aids The sophisticated graphic treatment in this text is meant to heighten interest in the topic at hand and to illustrate the concept in a concrete and effective way. The illustrations are both analytical and inviting.
An Informal Writing Style To help the reader comprehend the many complex aspects of personal finance, we employ an informal writing style that brings the student into the discussion without simplifying the concepts involved. We have been careful to explain new or unfamiliar terms, to use examples where appropriate, and to speak engagingly to the student.
A Complete Complement of End-of-Chapter Learning Aids Each chapter concludes with the following aids:
Key Terms: A list of important concepts in each chapter, accompanied by the page number where each key term is introduced and defined. To help the reader locate them, the key terms appear in boldface type within the chapter.
Problems and Review Questions: A list of questions meant to provide the basis for a review of textual material and to stimulate thought and discussion on the chapter's content. New to this edition: The list of questions and problems has been expanded. Also, all items have been updated to reflect changes in the financial environment.
Cases in Personal Finance: Two cases that, when completed, provide additional insight into the topics covered. These study aids are more challenging than the problems and review questions, requiring a firm grasp of the fundamentals and more computation. New to this edition: All cases have also been revised to reflect changes in the financial environment.
Supplementary Materials: This text is accompanied by a complete list of supplementary teaching aids for both the instructor and the student. As with the fifth edition text, the Internet is a major component of this ancillary package.
Instructor's Manual. The Instructor's Manual, now written by the authors, includes extensive summaries that highlight essential points in each chapter. Also included are answers to the end-of-chapter questions and sample solutions for the cases. Further insights on using Internet sites are also provided.
Test Bank. The test bank includes over 1,400 questions, prepared by the authors. The questions vary in rigor and type, from term identification to problem solving, and they should provide adopters a wide array of choices in preparing tests. For those adopting this text, the test bank is also available on a computer disk, along with complementary software for generating examinations keyed to chapters in the text.
PowerPoint Lecture Notes. This electronic lecture
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