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Financial Literacy State Test Review
Financial Literacy State Test Review
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Financial Literacy
Flashcards
38 cards
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Answers
1
An entrepreneur is someone that
works at a small company or firm
takes the risk to start a business
invests in French companies
works at a big company or firm
2
The marshmallow test attempts to measure self-control, and immediate vs delayed gratification
False
True
3
Some of the better jobs/careers exist in what we labelled the "hidden job market".
iceberg
networking
True
False
4
Some pros or advantages of renting a house/apt over buying one are
Easier to move, no property taxes, no long commitment, no home maintenance
Lower net worth
long term commitment, pay property ownership taxes - maintain and fix up
not sure
5
What is a person's risk tolerance? (when it comes to investing)
leaving your money hidden in your home-you don't trust banks
higher risk - higher return
a measure of the degree of uncertainty & risk undertaken
higher the risk - lower the return
6
What economic system is characterized by both government ownership and private businesses and individuals-mixed?
Socialism
Traditional
Command
Capitalism
7
In a Harvard longitudinal study those that had specific written financial goals performed
much, much better than others that didn't write goals
Goals? - I plan on marrying rich and or winning the lotto
much lower financially than those that didn't
much the same as those that just had the goals in their head
8
We can't have it all - we make choices- the next best choice that we didn't choose is called
marginal benefit
Opportunity cost
sunk cost
proximate choice
9
A 30 year home loan - a mortgage - has a schedule that shows each payment and what $ goes to interest & principal
False - most home loans are revolving credit
True - this is known as an amortization schedule
10
A mutual fund-individuals that pool their $ together & give it to a professional $ manager to
a fund that only does bonds
put in all in only one sector or area of the market
invest it all in one company or firm
diversify it-by buying 100 +companies in different sectors
11
Some sales people only make money when they make sales, this is called __________ compensation.
salary
commission
piece rate
hourly
12
ETF is an acronym for
Net Asset Value
Electronic Funds transmitter
Electronic Trust Fund
Exchange Traded Fund a way to pool $ to invest
13
Most research points to gambling (even state lotteries) as being a tax on the poor, possibly leading to addiction
False
True
14
Which stock has voting rights but no preference on dividends?
class A shares
treasury
common
preferred
15
The money you get for college or university that does not have to be repaid or paid back is called......
FASFA
Grants - especially pell grants
Unsubsidized Student Loans
Subsidized Student Loans
16
Student loans -College or University debt school loans has reached over 1.6 trillion US dollars
True
False
17
The process of making contacts & exchanging info with other people to develop + relationships
promoting from outside
promoting from within
networking
hidden job market
18
The rule of 72 is that you divide 72 by return on investment or interest and it = the # of years it takes $ to double
False
True
19
90% of Americans are not saving/investing enough for retirement
False
True
20
The ability to buy now and pay later is called
Credit
Ration analysis
Accounting
dollar cost averaging
21
What is an income share arrangement or agreement? (pertaining to paying for college or university0
Assets, Liabilities, Owner's Equity
The university pays for your education - upon employment you pay it back
Work-Study is when the college or university provides you with a job
Things your business owns and owes
22
What is the FASFA online federal government application form used for?
to look for scholarships
to determine your federal college financial aid eligibility
to apply to colleges and universities online
unemployment insurance
23
Which stock has no voting rights but preference on dividends?
preferred
common
controlling interest shares
Class "B" Shares
24
A cell phone is a need - necessity for life
current assets/current liabilities
True
False
total assets/current liabilities
25
Gross pay is your hourly wage X hours worked - net pay is your take-home pay after all of the deductions
True
False
26
The study of how a society decides what and how much to make and who gets the products or services is called?
FASBE
Economics
GAAP
Finance
27
A bond is a corporate or government debt instrument or iou.
False
True
28
When a stock holder gains enough votes to control the votes at a shareholder meeting
shareholder activism
corporate raiding
controlling interest
proxy votiing
29
If you are young & saving specifically for retirement, this account lets you take $ out taxfree
401k
Smart Goals
Saving more for tomorrow, tomorrow
Roth IRA
30
What items below belong on a personal net worth statement?
depreciation and goodwill
Revenue, costs of goods sold, expenses
Cash in and out from financing, investing, operations
Assets, Liabilities, Net worth
31
A fee at the time the mutual fund is set up - often used to pay the salesperson is known as
comission
front load
back end declining load
no load
32
A fee if you move your $ out of a mutual fund that is lowered over time
back end declining load
no load
expense fee
front load
33
One way to get more people to save is to opt them into an automatic savings program at work
True
False
34
What economic system has the government control most all economic activity?
Traditional
Command - Cuba, North Korea, Venezuala
Capitalism
Socialism
35
If you are a w-2 employee taxes are withheld from your paycheck by your employer
a I-9 is the identification form that shows your eligibility to work
a w-4 is the form you fill out to tell your employer how much $ to withold
True. - if you overpaid you have to file a return to get the refund
False only for 1099 independent contractors
36
You invest some $ these funds earn a return or interest - you now earn on the new amount - this is called - ?
simple interest
a P/E ratio - the stock share price / earnings per share
Stock beta - or how much a stock trades relative to the market as a whole
compounding interest
37
A credit card is an example of revolving credit
True - the amount, the payment, the interest can all change
Installment credit - fixed amount, fixed rate, fixed payment
False
38
Which economic system is characterized by more individual choice and less government involvement?
Command Economies
Socialism
Free market/Private enterprise - capitalism
Traditional Economies
