stud
bud
Sign up
Log in
Home
Library
Explore
SAT
More
2020 Personal Finance review Flashcards | StudBud
Explore
/
2020 Personal Finance review
2020 Personal Finance review
40 terms
·
StudBud Administration
·
278 plays
Imported from external platform
Flashcards
40 cards
F
Practice quiz
P
Host live
L
Questions
40
Answers
1
If you own shares of stock, what are the 2 ways you could potentially make $?
capital gains + mutual funds
dividends + capital gains
mutual funds + dividends
dividends + profits
2
Which stock market index tracks the 30 largest companies in the U.S.?
Nikkei
the Dow
NASDAQ
the S & P
3
What is the term for the time when a bond comes due for repayment?
maturity
capital gain
par value
coupon rate
4
Which of the following statements is TRUE about payday loans?
They are easier to pay back b/c of lower fees & lower rates
They are harder to pay back b/c of low fees & high rates
They are easier to pay back b/c of lower fees & higher rates
They are harder to pay back b/c of high fees & rates
5
Which of the following is true for someone with an 850 credit score?
They have a high interest rate on their loans
They have a diversified portfolio
They pay their bills on time
They maxed out their credit cards
6
Which of the following investments has the greatest potential for returns?
certificates of deposit
corporate bonds
stocks
savings accounts
7
Why would a person diversify their portfolio?
to eliminate their risk of losing everything
to reduce their risk of losing everything
to get the most dividends as possible
to maximize their profits
8
Which of the following investments is the least liquid?
corporate bonds
savings account
stocks
mutual funds
9
Which of the following is an example of a wealth creating asset?
computer
house
car
credit cards
10
What is the term for how easily you can turn your investment back into cash?
par value
maturity
liquidity
coupon rate
11
If you have a low credit score which of the following would most likely be true?
You will have an easier time getting a loan
You will live in the lap of luxury
You will have to pay higher interest rates
You will have to pay lower interest rates
12
What is a bond?
a loan
partial ownership in a company
profit shares
type of savings account
13
Which of the following investments is the riskiest?
corporate bonds
certificates of deposit
savings account
stocks
14
Fractional reserve banking refers to banks
only giving you a fraction of your money back
loaning only small fractions of money to most clients.
keeping a fraction of your money and loaning out the rest.
being only fractionally reliable in keeping your money safe.
15
What is Compound Interest?
Money you owe the bank
Interest paid on interest previously earned.
The rise in the price of goods and services over time
Saving money for a big purchase
16
What is the main difference between a credit card and debit card?
One charges high interest the other charges low interest rates
Only one has to be in your checking account
Only one is accepted by most businesses
Only one can be used as cash
17
What is the term for the fee we pay for using money now that we don't have?
interest
capital gains
maturity
dividends
18
Payday loans have very high interest.
True
False
19
A credit card represents _______________________.
Free money
Is the same things as a debit card
A line of credit
All of the above
20
Which of the following is an example of "wise" or good debt?
borrowing $ to buy stocks
borrowing $ to see a concert
credit card balances
student loan
21
What is the term for putting money aside today to make more in the future?
investing
savings account
capitalizing
deposits
22
Having a fractional reserve banking system means that:
No single loan can be larger than 20% of the bank's holdings
the central bank holds a certain fraction of GDP on reserve
a central bank must approve loans over $100,000
a bank cannot lend out all of its deposits
23
The 50/20/30 Rule is the preferred/recommended way to think about a monthly budget.
True
What's a budget?
False
24
Why is financial literacy important?
All of the above
to understand how to build wealth
to know the basics of personal fiance and money management
to better understand credit scores, risk, interest rates
25
If you have shares of stock and your company makes money, what do you receive as an owner?
interest
maturity
dividends
capital gains
26
When the stock market falls over a period of time, it is known as...
a bear market
a boom
a depression
a bull market
27
What is the term for investing in a variety of different companies and types of investments?
profit sharing
diversification
portfolios
liquidity
28
What is the term for all of a person's belongings that he/she may sell for money?
liabilities
stocks
capital gains
assets
29
Why is diversification of financial investments beneficial?
if one investments succeeds you must sell all the rest
provides a higher return on investment
allows you to invest all your $ in one stock
if one investment fails your other investments are safe
30
What does it mean to default on a loan?
You stop paying on your loan.
You borrow money from your parents.
You pay your loan off early.
You pay your loan a few days late.
31
Which of the following investments is the most liquid?
certificates of deposit
corporate bonds
savings account
stocks
32
Which investment tool gives you a high return, high liquidity and low risk?
both of them
savings acct
bonds
none of 'em
33
Wealth is
Assets + Liabilities = Net Worth
Liabilities -Assets = Net Worth
Assets - Liabilities = Net Worth
Liabilites X Assets = Net Worth
34
What is typically the 50% in the 50/20/30 budget?
needs/necessities
What's a budget?
wants/entertainment
savings/financial goals
35
What do the Dow and S&P do?
arrange the buying and selling of bonds
track the performance of a representative # of companies
track the performance of the Jonas Brothers
arrange the buying and selling of stocks
36
Which of the following is true considering the stock market?
It is too risky and should be avoided
Buy low and sell high
Only invest if you have a lot of money
Buy high and sell low
37
What is the FDIC?
A gov. agency created to provide jobs
Gov. agency insures the money people deposit in banks
A government agency created to build public works
A government agency created to regulate trade
38
Which of the following is likely to represent a fixed rate, secured debt?
A credit card
A loan from a friend
A dealer-financed auto loan.
A student loan
39
What is the name of the loan one gets to purchase a house?
default
mortgage
capital gains
dividend
40
What is the term if you sell your investment for less money than you originally paid for it?
credit risk
capital loss
capital gain
inflation risk
