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Financial Literacy Flashcards | StudBud
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Financial Literacy
Financial Literacy
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Personal Financial Literacy
Flashcards
22 cards
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1
Which is typically true of people who are financially literate?
They achieve all their financial goals
They know the basics of personal finance & money management
They have high debt and low savings
They almost always choose stocks and bonds that
2
If your expenses exceed your income, you should:
apply for a loan
open an IRA account
ignore your budget
reduce or eliminate expense
3
The best suggestion you gave a friend who is writing a check for the first time is:
Date the Check for proof of payment
Use the register to keep a record of the date you wrote it
Use pencil for changes
Make check payable to cash
4
If you have 3 credit cards with balances you can't afford to pay:
Call the IRS in order to avoid paying income tax this year
File for bankruptcy
Call credit card companies to negotiate a new plan
Notify credit reporting agency to avoid late fees
5
When you file bankruptcy, it's on your credit report for:
10 years
Until you repay the all debts
Until you receive a new credit card
3 years
6
Debt ratio shows the relationship between debt & net worth. The lower the ratio the:
better off financially the person is
more liquid assets the person has
worse off financially the person is
less liquid assets the person has
7
When Mary bought a DVD player with her credit card, her purchase created a(an):
reserve
investment
debt
savings
8
If you budget $200 per month for clothing but spend $150 this month
an outflow deficit
a budget variance
an income overage
a budget deficit
9
Consumer finance companies, advertised on TV, are known as:
Purchase loan lenders
Banks
Savings & loans associations
Small loan companies
10
Coin denominations in the US are:
.01, .10, .30, .75
they can be any denominations
.05, .10, .25, .50
.01, .05, .10, .25, .50, 1.00
11
What is meant by an uncollateralize loan?
A home equity loan
A personal loan without assets to cover the loan amount
A loan not backed by a co-signer
A loan taken on a life insurance policy
12
When selecting a PIN for your debit card you should
use your first initial and last name
Use a random selection of letters and numbers
Use your birth date
Use the name of a friend, family member or pet
13
Which documents should be stored in a safe-deposit box?
Copies of current & past budgets
Current paycheck stubs
Mortgage loan papers
Checkbook statements
14
What is the benefit to holding an investment for more than a year?
capital gains taxed at lower rate
money earned is tax-free
profits are averaged over the life of investment
brokers won't charge you a fee
15
When a person brings an item to a pawnshop for cash, it is called:
A sales agreement
A custodial payment
An unsecured loan
A collateralized loan
16
Who uses consumer credit reports in making decisions?
brokers
lenders
churches
schools
17
Which is considered to be open-ended credit?
A mortgage
A car loan
Department store charge cards
Installment loans
18
One of the reasons cigarettes are so expensive is:
most of the tobacco is imported
the government imposes excise tax on them
their cost is controlled by the FDA
the tobacco supply is controlled by the Federal Trade Com
19
If a person makes a deposit of $10,000 or more into a bank account, the bank must notify the
Federal Reserve Board
Federal Deposit Insurance Corporation (FDIC)
State Banking Commission
US Treasury Department
20
Which of the following does the Federal Reserve use to regulate the nation's money supply?
regulations
proposing legislation
monetary policy
fiscal policy
21
To qualify for Federal Housing Admin (FHA) loan you must:
have to people co-sign
Have a high school diploma
fulfill income guidelines
have 1/4 the cost for a down payment
22
If you want to store a valuable coin collection, you should:
Rent a safe deposit box
Give them to an attorney
Store them in a locked drawer
Store them in a cabinet at home
