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Semester Exam Review - Chapters 1-3 Flashcards | StudBud
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Semester Exam Review - Chapters 1-3
Semester Exam Review - Chapters 1-3
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Answers
1
Car repairs are a:
A) Fixed expense
C) Discretionary expense
B) Variable expense
D) Intermittent expense
2
What step in the 5 foundations is-get out of debt
step 2
step 4
step 1
step 3
3
What do you need to manage your money
value
debt
behavior
cost
4
What is the purpose of the Five Foundations?
to make sure you have money for friends
framework for financial success
to spend all your money
for banking information
5
At your age, a fully funded emergency fund should be?
500
1000
5000
100
6
Occurs when money is withdrawn from a bank account and the available balance goes below zero
carbon copy
Reconcile
zero-based
Overdraft
7
The following are guidelines for budgeting with an irregular income except:
B) Make a list of all of your expenses for the month ahead.
C) Budgeting with irregular income isn't any different
A) Prioritize the list in order of importance.
D) When your check comes in, spend your money down the list.
8
Writing and following a zero-based budget will help you avoid overspending/ impulse purchases
False
True
9
What are the 3 basic reasons to save money?
emergencies, large purchases, and wealth building
emergencies, money to lend friends, and wealth building
large purchases, going into debt, and wealth building
wealth building, money to lend friends, large purcahses
10
Which of the following account records would have the most current balance?
B) Your own account register
A) Account balance statement from the ATM
C) Your monthly bank statement
D) All of these records will have accurate account balances
11
Your own record of all your transactions
before you wreck yo self
check register
check yo self
check in to cash
12
You must write out a detailed ________?
Answer
Plan
Description
13
What does the (t) stand for in this equation? FV=PV(1+r/m) ^mt
the number of years you leave it invested
the future value
the number of times per year the interest is compounded
the annual rate of interest as a decimal
14
Instead of borrowing money for large purchases, your should set money aside in a __ over time.
Sinking Fund
Savings Account
Piggy Bank
Checking Account
15
What step in the 5 foundations is-save a $500 emergency fund?
step 4
step 2
step 1
step 3
16
Which of the following is NOT a reason credit is marketed so heavily to consumers in the US.
Strong consumer demand for big ticket items
The credit industry has become extremely profitable
The use of credit is not socially acceptable in the US.
17
Doing a budget does not:
C) Remove guilt/shame sometimes associated with a purchase
B) Make overspending more likely
D) Make your money go further
A) Show if you are overspending in an area
18
ʺPay yourself firstʺ means to assign a portion of your income to saving/investing every month.
True
False
19
Which of the following is a consequence of overdrawing your checking account?
D) All of the above
C) Overdraft fee from your bank
A) Bounced check fee from the store
B) Stress from money mismanagement
20
The granting of a loan and the creation of a debt is...
Normal
Credit
Payment plan
21
To match your bank statement with your checkbook
cash flow plan
budget
reconcile
carbon check
22
Was Dave Ramsey ever bankrupt?
no
yes
23
The knowledge & skill-set necessary to be an informed consumer and manage finances effectively.
Interest
Financial Literacy
Money Truth
Personal Finance
24
An obligation of repayment owed by one party to a second party.
Debt
Personal Finance
Debit
Credit
25
Average Credit Card debt is about
5k
50k
15k
20k
26
Online bill pay allows you to pay without having to write a check and send it in the mail.
False
True
27
A fee paid by a borrower to the lender for the use of borrowed money.
loan
credit
debt
interest
28
A written cash flow plan
personal finance
envelope system
sale item
budget
29
The granting of a loan and the creation of debt; any form of deferred payment.
Debt
Debit
Loan
Credit
30
Interest paid on interest previously earned is known as?
Compound Interest
Interest Rate
Emergency Fund
Sinking Fund
31
Which of the following is something that a typical millionaire would do?
D) Carry debt
A) Lease a new car
B) Spend less money than he or she makes
C) Replace things that are not broken
32
Interest paid on interest previously earned is known as?
Emergency Fund
Compound Interest
Interest Rate
Sinking Fund
33
The first thing you should save for is your retirement fund?
true
false
34
Automatic account transfers are the easiest way to save for emergency fund/large purchases.
True
False
35
Which of the following statements is false?
A) A cash flow statement has all income spending over time
B) A budget is a written plan for saving and spending.
C) A budget has what has already occured
D) A cash flow statement is has what has already occured
36
Groceries are a:
A) Fixed expense
B) Variable expense
D) Intermittent expense
C) Discretionary expense
37
Percentage of Americans living paycheck to paycheck:
A) 70
B) 25
C) 50
D) 40
38
Dining out is a:
A) Fixed expense
B) Variable expense
D) Intermittent expense
C) Discretionary expense
39
Managing money success is about ____% head knowledge
80
10
20
40
40
What does the FV stand for in this equation? FV=PV(1+r/m) ^mt
the number of years you leave it invested
the annual rate of interest as a decimal
the present value
the future value
41
If you write a zero-based budget every month, it is not necessary to reconcile your account.
True
False
42
A written budget, if followed, removes ________ from your finances.
A) Overspending
D) All of the above
C) Management by crisis
B) Guilt
43
Is a area of production, distribution, or trades of goods and services.
Interest-Bearing Account
Recession
Inflation
Economy
44
What does the (m) stand for in this equation? FV=PV(1+r/m) ^mt
the number of years you leave it invested
the future value
the number of times per year the interest is compounded
the annual rate of interest as a decimal
45
Having more than one bank account is never a good idea since it can complicate money management
True
False
46
About how much money do Americans charge on their credit cards each year
thousands
billions
hundreds
millions
47
People buy things they cannot afford to look rich or cool
True
False
48
What % of American families have no savings at all?
35%
25%
15%
40%
49
Why is credit so popular now?
It is normal to have credit debt
All the above
Because people buy things they cannot afford
It is easy to get credit
50
Rent is a:
C) Discretionary expense
A) Fixed expense
B) Variable expense
D) Intermittent expense
51
What does the PV stand for in this equation? FV=PV(1+r/m) ^mt
the number of years you leave it invested
the annual rate of interest as a decimal
the present value
the future value
52
Non-essential expenses
variable
discretionary
intermittent
fixed
53
The five steps to financial success are known as?
Five Foundations
Five Successes
Five Financial
Five Funds
54
Most American families live paycheck to paycheck...
True
False
55
A temporary decline during which trade & industrial activity are reduced/drop in spending.
Interest-Bearing Account
Inflation
Recession
Economy
56
An item that is bought without previous planning or consideration of the long-term effects
envelope system
reconcile
sale item
impulse purchase
57
Why didn't people loan money prior to credit taking root?
There were too many laws, and no money to be made
It was embarassing
People did not need it
58
What % of American are not saving for retirement?
40%
35%
15%
25%
59
What does the (r) stand for in this equation? FV=PV(1+r/m) ^mt
the number of years you leave it invested
the annual rate of interest as a decimal
the present value
the future value
60
Expenses that remain the same from month to month
intermittent
fixed
discretionary
variable
61
Assigns an expense to every dollar of your income, the income minus the expenses equals zero
zero-based budget
zero-spending plan
reconcile
overdraft
62
Learning the language of money is not that important
False
True
63
Managing money success is about _____% behavior
80
20
90
60
64
Series of envelopes that are divided into categories and are used for cash for expenses
reconcile
overdraft
check carbon
envelope system
65
What year did credit take root in America?
1977
1920
1995
66
A person or organization that buys/uses goods or services is...
Consumer
Person
Creditor
67
A debit card cannot be used for online purchases.
True
False
68
All of the decisions and activities of an individual or family regarding money
Financial Literacy
Consumer
Money Knowledge
Personal Finance
69
What step in the 5 foundations is-pay cash for college?
step 2
step 1
step 3
step 4
70
What is personal finance?
The banks way of holding my money
My checkbook
decisions I make regarding earning, saving, spending $
71
Percentage paid to a lender for the use of borrowed money (in debt) is known as?
Emergency Fund
Compound Interest
Sinking Fund
Interest Rate
72
Dave Ramsey has always had great spending habits
True
False
73
The zero-based budget is the best method of budgeting because:
A) It is less complicated
D) It ensures that every dollar you make has a purpose
B) A zero-based budget allows less money for wants
C) Sticking to a zero-based budget requires less discipline
74
Knowing the ____ of money allows you to tell your money what to do
Language
Economy
Personality
Status
75
The average amount of credit card debt in an American family is...
$10,799
$25,799
$15,799
76
A person or business that offers loans at extremely high interest rates
financer
creditor
bank
loan shark
77
The envelope system works great for managing spending on things that are variable expenses
False
True
78
A system by which goods and services are produced and distributed.
Personal Finance
Economy
Inflation
Exchange
79
Budgeting is crucial to your financial success.
False
True
80
Debt evidenced by a note which specifies the principal amount interest rate & date of repayment
Loan
Credit
Debt
Interest
81
Which of the following is not a record-keeping feature you could expect from your bank?
C) Customer service reconciles your account for you
D) A monthly account statement
B) An account register
A) A reconciliation sheet
82
The number-one cause of divorce in North America today is stress and disagreements over money.
False
True
83
What step in the 5 foundations is-pay cash for your car?
step 4
step 3
step 2
step 1
84
Saving money over time for a large purchase is known as?
Compound Interest
Interest Rate
Sinking Fund
Emergency Fund
85
You need to set money ______?
down
Due date
Goals
aside
86
A summary of all the income and outgo over a certain time period
transaction
budget
cash flow statement
discretionary
87
The amount you save is determined by how much money you have left at the end of the month?
true
false
88
The "normal" American family is broke
False
True
89
You should keep your emergency fund in the same account as your spending money?
false
true
90
We are told that debt is _____
Good
Normal
Alright
91
Your income level greatly affects your saving habits?
false
true
92
Your monthly budget should include:
C) Fixed expenses
D) All of the above
B) Discretionary expenses
A) Variable expenses
93
What step in the 5 foundations is-build wealth and give?
step 3
step 5
step 4
step 2
94
An account that generates interest income on the available balance in the account.
Economy
Recession
Inflation
Interest-Bearing Account
95
$500 in readily available cash to be used only in the event of an emergency is known as?
Interest Rate
Emergency Fund
Compound Interest
Sinking Fund
96
Which of the following is
not
one of the three basic reasons for saving money?
Large purchases
Having money to lend friends
Build Wealth
Emergency Fund
97
Once you have a money plan you need to _____?
share it
execute it
forget it
98
T or F It is ok to use your emergency fund to pay cash for big purchases such as a tv?
True
False
99
The persistent increase in the cost of goods & services or the persistent decline is purchases.
Interest-Bearing Account
Recession
Economy
Inflation
