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W!SE Financial Review Flashcards | StudBud
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W!SE Financial Review
W!SE Financial Review
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1
The Federal Reserve System (FED) stimulates the economy by
influencing the lowering of interest rates
giving high cost federal loans or grants
lowering federal taxes
increasing the number of bank branches
2
Families use this to help pay for college education expenses
401 k
529 Plan
home equity line
credit card
3
A person bought a $50K life ins policy. The $50k amount of coverage is called the
death benefit or face balue
premium value
annuity value or deductible
cash value
4
Credit Card Act of 2009
makes it easier for consumers to get a mortgage
encourage consumers to get bank loans
encourage consumers to borrow
make consumers aware of the costs of credit
5
When a person with life ins dies, how much money will beneficiary receive from $10k whole life w/$2k cash value
$10,000
$12,0000
$2,000
$8,000
6
How does a corporate bond differ from corporate stock
Bonds do not change in value after purchase; stocks typically do
Bondholders receives a share of the company's profits; stock does not
Bondholder lent the company money; stockholder bought part of the company
Bonds cannot be purchased from a broker; stocks can
7
On stock market tables Square Co is SC and Drexel Corp is DRE. What does this mean?
Internal Revenue Services' codes
SEC trading codes
US Treasury Departments identifiers
this is the companies' official stock symbols
8
What is capacity in terms of borrowing money
academic degrees
use of overdraft protection
health
current income
9
The cash value on a whole life ins policy is
equal to all the premiums paid
the death benefit minus the premiums paid
the savings portion of the policy
the face value of the policy
10
The Credit CARD Act of 2019 allows credit card companies to:
give credit only to people with low credit scores
raise or lower interest rates on new purchases with a 45 day notice
require cardholders to make online payments
increase the interest rate on the unpaid balance without notice
11
Which of the following represents the broadest indicator of stock market performance
The Dow Jones Industrial Average (DOW)
The Russell 2000 index
The Standard & Poor's (S&P) 500 index
The Nasdaq
12
Most financial advisors believe that a person's credit card bill should NOT exceed
10% of their monthly net income
the balance in your savings account
25% of their annual income
the balance in the checking account
13
A person borrowing money for a new car is likely to find the most favorable interest rate at
a credit union
a commercial bank
an investment firm
a credit card company
14
Which of the following is an investment product?
credit union savings account
Money Market mutual fund
bank savings account
a certificate of deposit
15
An umbrella policy covers
personal property when traveling away from home
major personal liability losses such as lawsuits for major property damage
food and storm damage
expensive personal property items such as jewelry
16
What type of investment should you use to save for a child's college education to a private school?
Blue chip stock
US Treasury
Bonds
Aggressive Growth Stocks
17
The difference between a blue chip stock and a growth stock is that a growth stock...
is exempt from taxes
generally pays little to no dividends
is guaranteed to increase in value
pays the highest dividends
18
What is cash value for a whole life insurance policy
a cash value policy is less expensive than others
If policy is cancelled, the owner is entitled to the cash value
when the person dies, the beneficiary receives only the cash value
cash value doubles every three years
19
Hospital bill is $10,500; deductible is $500; individual pays 20% -How much do you have to pay in total?
$500
$2,500
$2,000
$10,500
20
How can a person using credit learn about consumer credit rights?
Contact the Comptroller of the Currency
Contact the IRS
Read the US Dept of Treasury regulations
Read the Truth in Lending Act
21
A person overwhelmed with debt, goes to a responsible credit counseling service. How do they help them?
encouraging creditors to extend his payment schedule
cancelling his credit cards
getting the government to lower his income taxes
forcing lenders to forgive his debts
22
John causes an auto accident. What type of coverage pays for the medical expenses of the other person
uninsured motorist
medical coverage
collision physical damage
bodily injury liability
23
Which of the following is true
Payment for student loans must begin 6 months after graduation from college
A person's credit score will increase when the govt is the lender
student loans are cheapest way to pay for a college education
The max amount a person can borrow for a loan is $25k
24
The time value of money is defined as the
annual income after taxes paid to the government
difference between the amount of money a person saves and sends each year
benefit of receiving money today rather than in the future
additional money an employed person receives from yearly salary increases
25
When a person uses his credit card and does not pay his balance in full--the person will:
pay more for the items he buys as a result of monthly finance charges
have to pay a higher interest rate when he makes new purchases
see his credit score increase
qualify for extra bonus points
