Which of the following is a feature of a certificate of deposit (CD)? Funds deposited in a CD..

are held for a certain length of time.

Sylvester is taking out a loan and is confused by the jargon. Which of the following explanations might help him?

INTEREST is what the lender charges, and PRINCIPAL is money borrowed, PRINCIPAL is how much he owes per month, and TERM is how much he owes

You must, by law to have Automobile Liability Insurance. Which would protect the policyholder?

Caused an accident & $2000 damages to the other car

What is the difference between Property and Liability insurance?

P pays the insured for loss where L pays for loss to others

Rent is defined as the

cost of using someone else’s property

Which items should be recorded as expenses on an Income & Expense Statement?

Taxes from paycheck, money put in savings, & car insurance

What is the first step in creating a spending plan?

Track current income & expenses

To calculate her net worth, Jordan should use the following formula:

Assets - Liabilities = net worth

What is meant by leasing a vehicle?

You would be renting the car by making payments over time

The equity that you build by making mortgage payments is:

the value of the home after the mortgage debt is subtracted

If you have a net gain on your Income & Expense Statement, what should you do?

Place additional money in savings or other expenses

Why is a diversified portfolio desirable?

decreases risk by investing in a variety of tools

What is the security level of savings tools?

Savings tools are secure, they are protected by U.S. Govt.

If you are worried about your money begin safe, which type of depository institution is used?

Deposit is safe at either with insurance requirements

What does 'pay yourself first' mean? An individual should . . .

set aside an amount of money for saving before spending it

Which of the following statements is NOT TRUE about spending plans?

Spending plans include items NOT usually included on budget

In relation to the other options, how liquid is a savings account?

More liquid than a Certificate of Deposit

Which is true about saving and investing?

Saving helps build financial security, investing for old age

Which of the following best describes the benefits of having insurance?

Provides sense of financial security & peace of mind

Which is true about earning interest?

When earning interest, look for low rates.

What expenses are considered non-contractual?

Gasoline, food, and entertainment

Which of the following should NOT be listed as an asset?

Money in the paycheck he will receive next week

Which aspect of security at a depository institution is NOT TRUE?

Depositors accounts are insured at the same bank $125,000.

What is a Money Market Account that offers a tiered interest rates?

The amount of money earned depends on the balance

Which income source does NOT need to be included an Income and Expense Statement?

Taxes paid based the income last year.

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Personal Finance F19

65 termsStudBud Administration363 plays

Managing your money test review

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Questions 65

Answers

1
If expenses exceed income on a spending plan, what would be a financially smart solution?
Decrease expenses
Increase purchases
Earn less income
Use a credit card more often
2
Which of the following is a feature of a certificate of deposit (CD)? Funds deposited in a CD..
are very liquid
can be accessed via check or debit card.
have tiered interest rates
are held for a certain length of time.
3
Sylvester is taking out a loan and is confused by the jargon. Which of the following explanations might help him?
INTEREST is what the lender charges, and PRINCIPAL is money borrowed
MONTHLY PAYMENT is how much interest costs, and TERM is lender
TERM is the length of the loan, and INTEREST RATE is the total money paid
PRINCIPAL is how much he owes per month, and TERM is how much he owes
4
You must, by law to have Automobile Liability Insurance. Which would protect the policyholder?
Hail storm caused $2000 in damage to your car
An uninsured driver ran into you causing $2000 damage
Caused an accident & $2000 damages to the other car
you hit a deer causing $2000 in damge to your car
5
You will receive the greatest gain on your principal if interest is compounded:
Annually
Daily
Semiannually
Quarterly
6
An investment of $86 earned $17 in a year. What is the rate of return?
18%
22%
17%
20%
7
Common fees that may be charged by a depository institution include all EXCEPT:
minimum balance fee
overdraft fee
ATM fee
late fee
8
What is the difference between Property and Liability insurance?
Difference between P & L depends on specific policy purchase
P pays for loss to others where L pays for loss to insured
P pays the insured for loss where L pays for loss to others
P & L depends on whether cars or home insurance is bought
9
Rent is defined as the
fee charged for performing property management tasks
purchase price of a housing unit
dvance payment for costs beyond normal wear and tear
cost of using someone else’s property
10
Which items should be recorded as expenses on an Income & Expense Statement?
Money put in savings, interest paid on car loan, tax refund
Clothes bought, tuition, & interest on savings
Scholarship money, car insurance, & stock dividends received
Taxes from paycheck, money put in savings, & car insurance
11
What is the most effective & efficient way to access checking account funds?
apply for a credit card
use cashier's checks from the bank
apply for a debit card
apply for mobile banking
12
What is the first step in creating a spending plan?
Decide on income & spending category related to needs/wants
Develop a control system that will work with his life style.
Decide the amount spent on each bills paid each month
Track current income & expenses
13
To calculate her net worth, Jordan should use the following formula:
Assets / Liabilities = net worth
Assets + Liabilities = net worth
Assets - Liabilities = net worth
Assets * Liabilities = net worth
14
What is meant by leasing a vehicle?
You pay a larger down payment to offset the lease agreement
You purchase the vehicle by making payments over time.
The depreciation costs will likely be higher
You would be renting the car by making payments over time
15
Eric has chosen Amanda as beneficiary of his life insurance policy, Amanda will receive. . .
any proceeds if the Eric dies
or is required to serve as the executor of Eric’s estate
a commission for selling Eric his life insurance policy
the insurance premiums to keep the policy in effect
16
You saved $500 in a CD & made $50. What is your rate of return?
20%
5%
10%
15%
17
The equity that you build by making mortgage payments is:
the value of the home after the mortgage debt is subtracted
purchasing a housing unit as rental property
a home loan where the real estate is collateral
the amount of money paid on the home at the time of purchase
18
If you have a net gain on your Income & Expense Statement, what should you do?
Place additional money in savings or other expenses
spending more money than you have,continue spending
spending more money than you have, get another job
You are spending more money than you have, balance expenses
19
You have a medical bill of $1000. Your deductible is $500 & 20% co-inurance. What will you pay?
$600
$700
$500
$0, Insurance covers everything
20
When you purchase a vehicle without making a down payment & now owe more than the car is worth.
leasing
depreciation
being upside down on the loan
a hidden cost
21
Money spent.
interest
Register
deposit
expense
22
Which of the following is a feature of a money market deposit account?
Money must remain in the account for a specific time period
Unlimited transactions every month
Tiered interest rates
No minimum balance requirements
23
What is the technique used to estimate the number of years needed to double your money?
Inflation
70-20-10 Rule
Risk
Rule of 72
24
Insurance can be purchased to protect one from which of the following losses?
Stock market losses
Maintaining the price of your hom
Health care expenses
Car maintenance
25
How easily an asset is turned to cash.
liquidity
interest
deposit
withdraw
26
Why is a diversified portfolio desirable?
limits investor choices
decreases risk by investing in a variety of tools
increases the risk/return ratio
inidcates an investor is a good predictor
27
You want to spend less money on food and buy a better car, what is your least concern?
The skills she has acquired for preparing meals
The nutritional value of the foods she purchases.
Her personal preferences
How much time she has available to prepare food.
28
What is included as a liability on the Statement of Financial Position?
The market value of his car
The combined total of his savings and checking accounts
The value of his retirement account
The balance on his credit card
29
What is the security level of savings tools?
None of the above is true. Keep your money in a shoe box.
Savings tools are not secure, they have high risk loose.
Savings tools are secure, they are protected by U.S. Govt.
Savings tools are very secure, there are not risks involved.
30
If you wanted to save for something and buy it in 2 years, what account would you use?
Checking Account
Safe Deposit Box
Share Draft Account
Savings Account
31
If you are worried about your money begin safe, which type of depository institution is used?
Banks are insured by FDIC
Deposit is safe at either with insurance requirements
Credit unions are insured by NCUA
Keep your money at home
32
What does 'pay yourself first' mean? An individual should . . .
spend money on the items enjoyed in life before paying bills
pay all fixed expenses before paying fl
set aside an amount of money for saving before spending it
save whatever money is left over after
33
What savings tool would be good for managing everyday purchases?
Money market deposit account
Certificate of Deposit
Any of the above savings tools would help
Checking account
34
Which of the following statements is NOT TRUE about spending plans?
Spending plans are use to record planned expenses
Spending plans include items NOT usually included on budget
Spending plans are used to record planned income
examine your trade-offs and opportunity costs
35
Which expense WOULD NOT be considered part of the total transportation expenses?
depreciation
automobile payment
fuel
parking
36
A fee paid for potential damages to an apartment is known as. . .
rental agreement
security deposit
amenities
down payment
37
In relation to the other options, how liquid is a savings account?
More liquid than a checking account
More liquid than a Certificate of Deposit
Less liquid than mutual funds
More liquid than cash
38
Your income is $1,500 & expenses are $1,200. What is the least you should have for emergencies?
$4,500
$7,200
$1,800
$14,400
39
Which is true about saving and investing?
Savings is less liquid than investing
Saving & investing helps stay a current level of living
Saving helps build financial security, investing for old age
Savings is for long-term goals, investing is for short-term
40
Which of the following best describes the benefits of having insurance?
Required by law to purchase insurance,benefits don't matter
Provides sense of financial security & peace of mind
all risk of financial loss is transferred to insurance co.
Policyholder may become better off financially
41
Which is true about earning interest?
When earning interest, look for low rates.
When paying interest, look for low rates.
Amount of interest earned or paid is found by interest rate.
Interest is the price paid for using someone else’s money.
42
A rental agreement is often referred to as:
renters insurance
a mortgage
an amenity
a lease
43
Patty moved into an apartment with her friend Emma. Who should buy renter’s insurance?
Renter’s insurance is not necessary
Patty and Emma
Patty and Emma’s parents
The property manager
44
A not-for-profit depository insitution.
Credit Union
Savings and Loan
Mortgage Firm
Commercial Bank
45
If you spend more money than you have in your checking account, you can expect _____ charge.
Safe Deposit Fee
Overdraft Fee
ATM fee
Contact Fee
46
What expenses are considered non-contractual?
Motorcycle payment, food, and cell phone bill
Internet bill, entertainment, and clothing
Cell phone bill, gasoline, and car payment
Gasoline, food, and entertainment
47
Which of the following should NOT be listed as an asset?
Money in the paycheck he will receive next week
The market value of his car
Money in his checking account
His hockey equipment
48
Which aspect of security at a depository institution is NOT TRUE?
All money stored at a bank is kept safe at all times
Information about depositors is kept in secure data storage
Banks have insurance protection up to $250,000 per account
Depositors accounts are insured at the same bank $125,000.
49
If you have an accident, the insurance company may have you pay some up-front cost known as a
overcompensation
premium
reimbursement
deductible
50
What is a Money Market Account that offers a tiered interest rates?
The amount of money earned depends on the number of accounts
The rate of interest earned increases over time
This is illegal.
The amount of money earned depends on the balance
51
Which income source does NOT need to be included an Income and Expense Statement?
Interest earned on her savings account.
Taxes paid based the income last year.
Social Security income being received
Money she received from her grandparents for her birthday.
52
Which of the following would most likely be considered a contractual expense?
Cell phone
Clothing
Food
Entertainment
53
The most common relationship between risk and return in investing can be stated as
higher risk indicates higher return
higher risk indicates lower return
no relationship exists between risk and return
lower risk indicates higher return
54
Monthly insurance payment is known as
co-insurance
premium
moral hazard
deductible
55
Maggie has a net worth of $20,000. Samantha net worth of $15,000. Who's wealthier?
Samantha
Maggie
56
Price of money
deposit
interest
income
withdreaw
57
It is recommended that life insurance be purchased when the:
individual has dependents
individual reaches the age of 50
individual flies on an airplane
individual gets their first job
58
To increase his net worth, Jackson could:
Increase his assets
Increase his market value
Increase his liabilities
Decrease his assets
59
When is your spending plan complete?
Spending plans are complete each December 31st
Spending plans are always under revision & never complete
When you have all of your current income & expenses recorded
When you allocate all your income to categories for a month
60
A place to record transactions.
check
deposit
endorsement
register
61
A key difference between commercial banks and credit unions is that:
banks pay higher interest rates than credit unions
Banks have more services like debit cards than credit union
credit unions are located in rural areas & banks in the city
banks are for profit, credit unions are not-for-profit
62
Which statement is TRUE of a mutual fund?
Mutual funds are speculative investments.
Mutual funds are diversified investments.
Mutual funds are a form of real estate investments.
Mutual funds are superior purchasing to a single stock.
63
When an employer provides health, live & disability insurance it is known as
coverage
household production
government programs
employee benefits
64
In which scenario below should renters insurance be considered?
You purchase a home in the country
You are landlords of several properties
Rent an apartment in Sioux Falls
Living with your parents
65
Put money into an account
endorsement
withdraw
deposit
register

Personal Finance F19 Flashcards | StudBud