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Financial Literacy Final Part 1 Review Flashcards | StudBud
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Financial Literacy Final Part 1 Review
Financial Literacy Final Part 1 Review
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Flashcards
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1
Which is a negative impact on your credit score?
decreasing your utilization of credit
paying down balances on credit card accounts
paying bills on time
applying for multiple credit cards in a short period of time
2
How do insurance companies make money?
collecting more in premiums than they need to pay out each year
refusing to pay our claims to policyholders
keeping costs low with minimal advertising
collecting money from the government
3
Which payment will decrease if you have roommates
groceries & eating out
cell phone bill
rent
bedroom furniture
4
Difference between saving and investing...
less than $10,000 is savings, more than $10,000 in account is investing
nothing - they are the same
saving is less risky than investing, therefore smaller return
investing is for short term and saving is long term
5
How can your credit score impact your financial situation?
determines if you are approved for a loan & what the rate will be
has no impact on your financial situation
those with low scores get lower interest rates than those with high scores
those with high scores can borrow; those with low scores cannot
6
Two important factors in calculating credit scores?
payment history & type of account
payment history & amounts owed
amount owed & length of credit history
length of credit history & new credit inquiries
7
A monthly payment to get liability insurance to cover your belongings in your apartment is...
homeowner's insurance
life insurance
renter's insurance
auto insurance
8
Why is compound interest better than simple interest?
benefits of compound are better in the early years and decreases over time
compound has fewer fees
not only earn interest on principal but also interest already earned
more difficult to calculate, so fewer people use it
9
Which is a consequence of not paying your credit card or loan debts?
lender filing for bankruptcy on your behalf
wages or tax refunds being garnished
lose your job
collection agencies visiting your friend & family to collect your debt
10
What does not appear on a credit report?
student loan activity
salary information
credit card payment history
payment history on car loan
11
What is an insurance premium?
monthly payment to the insurer
an added cost you pay to have higher quality services
amount paid out of pocket for specific services
list of procedures covered by insurance carrier
12
What is the single best way to improve your credit score?
make payments on time
check your credit score
cancel credit cards
get a car loan
13
Which auto policy will have the highest premium?
policy with $1,000 deductible
policy with $500 deductible
policy with $250 deductible
policy with $2,500 deductible
14
Who tracks your credit information?
Consumer Financial Protection Board
All of the above
Federal Government
Equifax, Experian, Transunion
15
Sam's passenger car window was knocked out by someone trying to break in. Which type of coverage will fix it?
comprehensive
collision
liability
none
16
How do you fix a deficit in your budget?
increase your income and expenses by same amount
increase your expenses
decrease spending on wants
cut fixed expenses
17
What does "withholding" mean in reference to your paycheck?
how much you are going to owe the government when you file your taxes
how much you earn
how much is being taken out of your paycheck in taxes
amount of your paycheck that you are NOT being taxed on
18
Your employer offers a matching to your 401k. You only have $150 available for retirement. What do you do?
contribute $150 to 401k because your employer will match
contribute $75 to 401k and $75 to IRA
opt out of the 401k plan
put the $150 into your savings account
19
Which government-run website allows you to download your credit report for free once per year?
getcreditreportshere.com
freecreditreport.com
creditkarma.com
annualcreditreport.com
20
When you have liability coverage on your auto insurance policy...
your medical bills will be covered if you're in an accident
your insurance will cover your neighbor's fence repairs if you crash into
won't get points on license if pulled over for speeding
cannot be found liable or guilty of causing an accident
21
Best description of why payday and auto title loans are referred to as predatory lending
lenders prey on low income borrowers who have no other options for loans
salespeople who work there are mean and unfriendly
term the government uses to describe particular loans
competition to qualify for these loans is fierce, like a predator
22
Which would be difficult to change if you need to reduce expenses?
expenses of new clothes
loan payment on a car
postponing purchase of new tv
dining out at restaurants
23
Which will not impact your monthly car ownership costs?
purchase price of the car
your age
length of car loan
cost of public transportation
24
You have been approved for an apartment. What will you need to provide the landlord when you sign the lease?
$1,000 security deposit
first month's rent
first and last month's rent and security deposit
first and last month's rent
25
Which type of insurance provides financial support if you pass away?
life
death
liability
health
