Question

here are four steps in solving one’s personal financial challenges:

1. considering opportunity costs
2. assessing risks and returns
3. setting short- and long-term goals
4. assessing needs and wants

Which of these is the correct order of these steps?

2, 1, 3, 4
1, 2, 3, 4
4, 1, 2, 3
4, 2, 3, 1

Answer 1

4, 1, 2, 3

First assess your needs and wants (define the problem), then consider the opportunity costs of possible choices, evaluate those choices' risks and returns, and finally set your short- and long-term goals based on that analysis.