stud
bud
Sign up
Log in
Home
Library
Explore
SAT
More
Personal Finance Midterm Flashcards | StudBud
Explore
/
Personal Finance Midterm
Personal Finance Midterm
50 terms
·
StudBud Administration
·
104 plays
Imported from external platform
Flashcards
50 cards
F
Practice quiz
P
Host live
L
Questions
50
Answers
1
Why is having a fully funded emergency fund so important when it comes to your financial well-being?
The purpose is to have money set aside for large purchases like vacations
None of the above
As long as you have a good-paying job, you really don't need it
It covers unexpected financial emergencies & gives you financial security
2
Rent is a:
Intermittent expense
Discretionary expense
Fixed expense
Variable expense
3
A credit score is intended to measure:
The amount of money you have in the bank
Your income level
Your financial success
The risk of your not repaying debt
4
Which of the following is not a credit myth?
Borrowing money can have serious consequences and prevent you from building
Debt is a tool and should be used to create prosperity.
You have "arrived" financially once you get approved for a credit card.
The lottery and other forms of gambling will make you rich.
5
Which of the following is a reason that people don't save money?
They lack focus
They lack discipline
They do not live on a budget
All of the above
6
A wise college plan does not include:
Scoring well on the ACT or SAT
Finding the most expensive prestigious college so you can impress people
Creating a budget and starting to save now
Shopping around for the most appropriate, low-cost academic option for you
7
What is paycheck garnishment?
Process by which the holder of a mortgage sells the property of a homeowner
court-ordered that allows a lender to take $ owed directly from a paycheck
A legal procedure for dealing with debt problems of individuals & business
Process of taking something back for failure to make payments
8
Which of the following could be a negative consequence of taking out student loans?
All of the above
Having to delay investing & saving for your future because of student loans
Not having the freedom to be a stay-at-home parent because of student loan
Not having flexibility in your career options because of student loans
9
When it comes to managing money, success is about ________% knowledge and ________% behavior
20,80
50,50
60,40
80,20
10
Groceries are a:
Variable expense
Fixed expense
Discretionary expense
Intermittent expense
11
Personal financial success is primarily the result of:
Winning the lottery
Managing your money behavior
Inheriting money from your parents
Generous welfare and unemployment programs
12
Which of the following account records would have the most current balance?
All of these records will have accurate account balances
Your monthly bank statement
Account balance statement from the ATM
Your own account register
13
Why was the use of credit uncommon prior to 1917?
Borrowing money was generally not socially acceptable.
All of the above.
Lending money to others was not profitable.
Laws prevented lenders from charging high interest rates.
14
Which of the following best explains why students should learn about personal finance?
Personal finance is highly complex & require a great deal of time to learn
Learning to manage money will help you achieve a profitable career.
Learning to manage money early can eliminate mistakes and promote benefits
Personal finance skills are better learned through trial and error.
15
When it comes to personal finance, the math is easy. What's challenging is managing your ________.
Income
Friends
Behavior
Bank account
16
Key components of financial planning include all of the following except:
Allow your financial planner to make all of your major money decisions
Replace money myths with money truths
Regularly monitor and reassess your financial plan
Write out a detailed plan for accomplishing your goals
17
Which of the following is not one of the three basic reasons for saving money?
Build wealth
Large purchases
Have money available to lend to friends
Emergency fund
18
What factors affect a credit score?
Type of debt
Duration of debt
All of the above
New debt
19
Which of the following are ways that you can invest in yourself?
Find a mentor
Read books
Surround yourself with people who have similar goals and ambitions as you
All of the above
20
Which of the following is not one of the basics of budgeting?
Live on less than you make
Stick to your budget unless something unexpected happens
Pay yourself first by saving
Make it a priority to give
21
The zero-based budget is the best method of budgeting because:
Sticking to a zero-based budget requires less discipline
A zero-based budget allows less money for wants
This type of budget is less complicated than other types of budgets
The 0-based budget ensures that every $ is assigned a specific purpose
22
Which of the following statements best describes how Americans are being outsmarted by banks and other lenders?
We are driven by consumerism.
Buying things on credit has become acceptable in our culture.
Credit is marketed so well that we want it despite the negatives
We are taught that we can buy happiness.
23
Instead of borrowing money for large purchases, you should set money aside in a ________ over time and pay with cash.
Sinking fund
Mortgage Fund
Credit Card Fund
Emergency Fund
24
Which of the following statements about college financial aid is false?
Grants are free money.
Scholarships are only for the highest academic achievers.
The FAFSA is the first step to receiving any kind of financial aid.
Many businesses have scholarships for employees' children.
25
Which of the following statements is false?
A budget summarizes the saving spending that has taken place over a year
The cash flow statement is reflective of what has already taken place.
A budget is a written plan for saving and spending.
A cash flow statement summarizes all of the income and outgo over time
26
Which of the following steps is the First Foundation?
Build wealth and give
Save a $500 emergency fund
Get out of debt
Pay cash for your car
27
The average repayment period for a student loan is:
15 years
10 years
20 years
5 years
28
At your age, a fully funded emergency fund should be:
$500
$5000
$1000
$100
29
Which of the following is something that a typical millionaire would do?
Replace things that are not broken
Carry debt
Spend less money than he or she makes
Lease a new car
30
This principle suggests that an amount of money today has different buying power than the same amount in the future
Interest rate
Time value of money
Inflation
Opportunity cost
31
Your monthly budget should include:
Fixed expenses
Variable expenses
All of the above
Discretionary expenses
32
A written budget, if followed, removes ________ from your finances.
Management by crisis
Guilt
Overspending
All of the above
33
Which of the following is a consequence of spending more than you make?
A cycle of debt
Stress
Missed opportunity to save and invest
All of the above
34
During the Great Depression, New Deal policymakers came up with mortgage & lending policies that convinced banks that:
Consumer credit could be profitable
They would not be able to compete with loan sharks
The middle class wouldnt be willing to use credit
Consumer credit was not a profitable industry
35
Doing a budget does not:
Remove guilt and shame sometimes associated with a purchase
Show if you are overspending in an area
Make overspending more likely
Make your money go further
36
You should visit your college's financial aid office if:
A medical situation has come up
All of the above
Your parents' financial situation has changed
You have any problems with the financial aid application process
37
Which of the following is not a good idea for getting out of debt?
Borrow money from your parents to pay for the debt
Sell something
Get a part-time job or work overtime
Quit borrowing money
38
Which of the following is not a good option when it comes to paying for your education?
Ask your parents to take out a loan
Plan ahead
Get a part-time job
Fill out the FAFSA
39
Which of these is not a key to saving money?
your income
Making saving a habit and a priority
Focus
Discipline
40
Which of the following is not a factor in determining a FICO score?
Using credit cards
Paying cash for all purchases
Getting a personal loan from a bank
Taking out a mortgage on a house
41
Which of the following statements is false?
Research shows that students who work up to 20hrs a week have higher grades
Research shows that working more than 20 hrs a week may drop your grade
Students rarely drop out of college due to financial trouble
On-campus jobs may pay you directly or pay toward your tuition bill.
42
For which of the following should you save?
Purchases
Wealth building
All of the above
Emergency fund
43
Which of the following things cannot be done with a debit card but can be done with a credit card?
Purchase something online
Rent a car
Go into debt
Purchase an airline ticket
44
Which of the following is not a recommended step in the Drive Free method of purchasing a car?
Plan your purchase in advance using the sinking fund method of saving.
Place your savings in a mutual fund so that your money can make more money.
Explore new car dealerships for the best interest rate.
Start with an inexpensive car & gradually move up in car value as you save
45
Which of the following statements best explains why income alone does not determine wealth?
How much $ a person makes doesnt dictate spending/saving behavior
Income alone does determine a person's wealth.
Investing is the only factor that contributes to wealth building.
Only people who are natural savers can become wealthy.
46
Which best summarizes how the use of a credit card for purchases instead of cash can change one's spending behavior?
Studies show that there is no change in spending behavior w/ credit vs cash
People typically spend less when they know that they are earning "rewards"
Behavior does not matter as long as you pay off the credit card
Studies show that consumers typically spend more when using credit vs cash
47
The total estimated student loan debt outstanding (unpaid) is over:
$10 thousand
$7 trillion
$1 billion
$1 trillion
48
Which of the following is a consequence of overdrawing your checking account?
Stress from money mismanagement
Bounced check fee from the store
All of the above
Overdraft fee from your bank
49
Which of the following is a sign that your identity may have been stolen?
All of the above
Your credit report shows accounts you didn't open
A call from a collection agency about a debt you didn't incur
Bank and billing statements don't arrive on time
50
Why should interest earned not be a factor with your emergency fund?
Inflation can eat up the interest earned.
Interest-bearing accounts at banks earn a high rate of interest
The emergency fund is not intended to grow wealth.
All of the above
