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Financial Literacy Flashcards | StudBud
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Financial Literacy
Financial Literacy
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Personal Financial Literacy
Flashcards
22 cards
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Questions
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Answers
1
If you have 3 credit cards with balances you can't afford to pay:
Call the IRS in order to avoid paying income tax this year
Notify credit reporting agency to avoid late fees
File for bankruptcy
Call credit card companies to negotiate a new plan
2
One of the reasons cigarettes are so expensive is:
the tobacco supply is controlled by the Federal Trade Com
most of the tobacco is imported
their cost is controlled by the FDA
the government imposes excise tax on them
3
When you file bankruptcy, it's on your credit report for:
3 years
Until you receive a new credit card
10 years
Until you repay the all debts
4
Which of the following does the Federal Reserve use to regulate the nation's money supply?
fiscal policy
proposing legislation
regulations
monetary policy
5
If a person makes a deposit of $10,000 or more into a bank account, the bank must notify the
US Treasury Department
Federal Reserve Board
Federal Deposit Insurance Corporation (FDIC)
State Banking Commission
6
When a person brings an item to a pawnshop for cash, it is called:
A sales agreement
An unsecured loan
A custodial payment
A collateralized loan
7
If your expenses exceed your income, you should:
apply for a loan
reduce or eliminate expense
ignore your budget
open an IRA account
8
If you want to store a valuable coin collection, you should:
Store them in a locked drawer
Store them in a cabinet at home
Rent a safe deposit box
Give them to an attorney
9
The best suggestion you gave a friend who is writing a check for the first time is:
Make check payable to cash
Use pencil for changes
Use the register to keep a record of the date you wrote it
Date the Check for proof of payment
10
Which is considered to be open-ended credit?
A mortgage
Installment loans
Department store charge cards
A car loan
11
Consumer finance companies, advertised on TV, are known as:
Savings & loans associations
Banks
Small loan companies
Purchase loan lenders
12
If you budget $200 per month for clothing but spend $150 this month
an outflow deficit
an income overage
a budget variance
a budget deficit
13
Which documents should be stored in a safe-deposit box?
Copies of current & past budgets
Checkbook statements
Current paycheck stubs
Mortgage loan papers
14
Debt ratio shows the relationship between debt & net worth. The lower the ratio the:
more liquid assets the person has
less liquid assets the person has
worse off financially the person is
better off financially the person is
15
What is meant by an uncollateralize loan?
A loan not backed by a co-signer
A personal loan without assets to cover the loan amount
A home equity loan
A loan taken on a life insurance policy
16
What is the benefit to holding an investment for more than a year?
brokers won't charge you a fee
capital gains taxed at lower rate
profits are averaged over the life of investment
money earned is tax-free
17
Who uses consumer credit reports in making decisions?
lenders
schools
brokers
churches
18
When selecting a PIN for your debit card you should
Use the name of a friend, family member or pet
Use your birth date
Use a random selection of letters and numbers
use your first initial and last name
19
Coin denominations in the US are:
.01, .05, .10, .25, .50, 1.00
.01, .10, .30, .75
.05, .10, .25, .50
they can be any denominations
20
To qualify for Federal Housing Admin (FHA) loan you must:
have 1/4 the cost for a down payment
fulfill income guidelines
have to people co-sign
Have a high school diploma
21
When Mary bought a DVD player with her credit card, her purchase created a(an):
reserve
savings
debt
investment
22
Which is typically true of people who are financially literate?
They achieve all their financial goals
They have high debt and low savings
They almost always choose stocks and bonds that
They know the basics of personal finance & money management
