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FMGT 1101 Test 1 Review Flashcards | StudBud
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FMGT 1101 Test 1 Review
FMGT 1101 Test 1 Review
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1
If you think interest rates are rising, you should...
Lock in your interest rate on a bank CD
Lock in your interest rate on a long term loan
Buy a long term bond
Make a dad joke
2
Taxable income is the number used to calculate the amount of taxes you owe
True
False
3
What does the "M" stand for in SMART goal?
Measurable
More
Money
Movement
4
Once you make a financial plan, you should implement it and never review it
True
False
5
If Jonathan is earning 2% on an investment and inflation is increasing by 3%, what is happening to his purchasing power?
Inflation and purchasing power are not related
It's not changing
It's increasing
It's decreasing
6
If I earn $75,000 in June and spend $68,000
My net worth increases by $75,000
My net worth is only impacted if I spend more than $75,000
My net worth increases by $7,000
My net worth decreases by $7,000
7
A car loan is an example of open-end credit
True
False
8
Capital Gains Tax
A tax rate that increases as the taxable amount increases.
A tax on a sale of merchandise or services
A tax imposed on profits from the sale of a capital asset (often stock)
A tax rate that decreases as the taxable amount increases.
9
In the five C's of credit, Capacity is related to:
Do you have any assets to pledge for a loan?
Do you pay bills on time?
Do you have a high enough income vs expenses to repay the loan?
What are your assets?
10
Interest on personal loans is not deductable.
True
False
11
What are good reasons to learn about money?
All of the above
Avoiding debt
Obtaining and protecting assets
Controlling my financial activities
12
What is opportunity costs?
What you have to give up to get something else.
The demand for goods.
There is not enough for everyone.
When things are on sale.
13
When starting a career, you should assess personal goals, abilities, interests, etc. (T or F)
True
False
14
Short-term liabilities are
debts owed by company or person due in more than a year
When you give someone a new pair of socks
obligations a company or person is responsible to pay within a year
ALL debts and obligations owed by a business or person
15
What is a fixed expense?
money you save
expenses occur regularly and do not change month to month
expenses change based on need or wants
16
For a Roth IRA, you contribute to it..
with after-tax money
with coins only
up to $250 per year
with pre-tax money
17
Tax deductions and tax credits can __________________ tax liability
not affectd
none of the above
reduce
increase
18
Asset Management Accounts are
offered by all banks
Are federally insured
Not costly
Comprehensive Financial Services packages offerred by investment firms
19
What is the purpose of the FDIC?
Protects money given to workers
Protects the bank buildings
Protects home values
Protects money put in banks
20
Inflation is most likely to result from increased production costs, wages, prices, and/or a surge in demand
False
True
21
Itemized deductions (like business expenses and mortgage interest) are items
you subtract from your taxes
added to stimulus checks
the IRS refunds you
you can subtract from your taxable income
22
How would you differentiate a "job" vs. a "career"
A career is to earn money without thoughts of the long-term
A career is not a commitment
A career does not require continuous training
A job is to earn money without thoughts of the long-term
23
A credit card is an example of closed-end credit
False
True
24
Spend no more the ___% of your income on consumer credit payments, & most credit report info expires after ___ years
50, 100
20, 7
10, 10
7, 20
25
In the five C's of credit, Collateral related to:
Do you pay bills on time?
Do you have a high enough income vs expenses to repay the loan?
Do you have any assets to pledge for a loan?
What are the economic conditions that could impact your ability to pay
26
Cafeteria style benefits
allows workers to base their benefits on a credit system & personal needs
not relevant to businesses
like salaries, they're fixed pay over a period of time
can choose from different food items to quench your needs
27
Credit scores and credit reports are the identical same thing and don't need to be monitored.
True
False
28
People should never attempt to complete their own taxes even if they have a simple tax return.
False
True
29
An example of an industry trend would be that there are more service jobs (vs. manufacturing) in the last decades
False
True
30
Who must file taxes
Anyone over 18 years old
anyone who owes taxes or gets a refund
anyone with income over $12, 950
Everyone with a job
31
Certified Check
Check from the bank's own funds, and signed by a cashier or teller.
Personal check from an account that has been certified by a bank.
A printed form on which you write an amount and who it is to be paid to.
Check that your bank has processed and paid out.
32
What is an excise tax?
a tax on the production or sale of a specifc product or service like gas
a tax on property
a tax on income earned
a tax on money inherited or given as a gift
33
Fair Credit Billing Act ...
Debt collections can't harass you on Tuesdays
Protects you from errors on your bills and dispute unauthorized charges
Requires you to notify the lender about new sock buying
Protects you from unfair cheating by sports teams
34
The W4 form
Is filled out by a new employee, stating the # of withholdings
shows gross wages
Lists who can claim the worker as a dependent
Should be stapled to the tax return
35
The three elements to calculate simple interest are:
principal, rate, hours
percent, ratio, time
principal, rate, time
principal, ratio, time
36
If the FDIC covers $250,000 per person, a joint account covered up to $500,000.
True
False
37
Your net worth...
is what you owe minus what you own
is your liabilities minus your assets
is your assets minus your liabilities
is what you hear minus what you see
38
What does the Federal Reserve System do?
Regulate money supply (and the economy) by adjusting the fed funds rate
Pay for the laws
Provide a balanced budget
Provide loans to businesses
39
Interest rates driving job openings would be an example of economic conditions
True
False
40
Insurance helps us manage risk
False
True
41
The truth in saving law requires banks to disclose the APY on savings accounts
False
True
42
The five c's of credit are
character, conditions, capacity, credit, collateral
The addition or subtraction of credit on trade credit
capital, character, collateral, conditions, capacity
the five credit bureaus that calculate your FICO score
43
Financial goals
Should not consider time
Are only relevant to rich people
Should be specific and measureable
Are useless. We never know the future
44
Cover letters are a list of previous jobs and you should create one and not customize it
False
True
45
Jimmy has $100 in assets and $40 in liabilities
His debt ratio is 140%
His debt is $60
His debt ratio is 40%
His debt ratio is 60%
46
Which is true of an effective resume?
It works for every job application, so you don't need multiple resumes
It uses key words, has a simple design, and is usually sorted by date.
It features your photograph in a Buckeye jersey
It includes many details; the longer the resume, the better
47
If you deduct $100 from your income (with a deduction or an adjustment)
Your taxes go down by $25 if you have a 25% average tax rate
Your taxes go down by $100
Your taxes would not change
Your taxes go down by $25 if you have a 25% marginal tax rate
