An employment position obtained to earn money

Purpose of Truth In Lending Act

gives consumers the right to know the total cost of credit

If a consumer is a victim of identity theft, what should they do?

Call all major credit bureaus to request a “fraud alert”

What does the 70-20-10 rule represent?

70% of income is spent, 20% is saved, and 10% is invested.

Comparison shopping for a vehicle is necessary because

The vehicle price is not the only cost involved

Which of the following statements does NOT describe a housing lease?

terms of the lease agreement are not legally binding.

When referring to investments what is the relationship between risk and return?

Higher risk takers expect to receive higher returns

A credit report could be characterized as:

A record of a consumer’s credit history.

What does a checking account provide to the consumer

Paper checks or debit cards used to withdraw money deposited

What services are available at a credit union?

Share accounts and share draft accounts

Which of the following statements is NOT true about direct deposits & payments

No authorization is required by account holder

How does inflation affect the rate of return of investments?

Rate must be deducted from investment rate of return

What is one major difference between installment credit and non-installment credit?

installment requires payments be the same amount each month

Which would yield a higher rate of return on $5000 investment @ 5% interest for 10 yrs.

Compound interest compounded quarterly

What is the purpose of Form W-4?

allow the employer to withhold federal income taxes

Which of the following statements about the Federal Reserve is not true?

Does not process commercial checks

An advantage of using credit is:

Not having to carry large amounts of cash.

A well written financial goal includes the following elements:

Specific, measurable, attainable, realistic, and time bound.

A career is defined as

A commitment to a profession which requires training.

What is the purpose of form W-2?

itemizes how much money was earned & taxes paid by employee

Electronic banking allows customers to:

Perform transactions 24 hours a day.

What is the purpose of the Federal Deposit Insurance Corporation (FDIC)?

Insure federally chartered commercial banks against loss

What is the purpose of the Truth in Lending Act?

Gives consumers the right to know the total cost and terms

A person would choose to take an interest inventory test to:

learn about possible careers related

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Personal Finance Final Exam Review

48 termsStudBud Administration226 plays

Final Review

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Questions 48

Answers

1
What are the 2 types (categories) of taxes?
Progressive & Regressive
Sales & Property
Social Security & Medicare
State & Federal Income
2
If Sam makes $2000 per month, based on experts advice, how much should he keep in savings for emergencies?
$12,000 - $24,000
$6,000 - $12,000
$48,000 - $72,000
$2,000 - $4,000
3
Stock term when market is doing poorly.
bear
bull
depression
recession
4
What type of information is not found on a consumer’s credit report?
medical diagnosis
criminal record
current and past addresses
employment history
5
A job is defined as
A commitment to a profession which requires training
An employment position obtained to earn money
A degree obtained from an accredited institution.
An evaluation of one’s aptitudes and interest
6
Purpose of Truth In Lending Act
allows consumers to know friends credit score
all of these
gives consumers the right to know the total cost of credit
allows consumers to change their credit reports
7
Which of the following would you buy using your discretionary income?
socks and garments
magazines and books
water and electric utilities
milk and bread
8
If a consumer is a victim of identity theft, what should they do?
Do not call the police; only the credit bureaus
Leave all fraudulent accounts open as proof
Call all major credit bureaus to request a “fraud alert”
Wait at least two weeks before taking action
9
What differentiates credit unions from other financial institutions?
they offer the widest variety of services
all of the above
they specialize in savings and mortgages
members share a common bond and they are not for profit
10
What does the 70-20-10 rule represent?
70% of income is spent 20% invested 10% saved
70% of income is spent, 20% is saved, and 10% is invested.
70% spent on fixed expenses 20% spend on variable 10% saved
70% is saved 20% income is spent & 10% is used to buy assets
11
Comparison shopping for a vehicle is necessary because
The price does not matter
Different dealers offer the same prices
The vehicle price is not the only cost involved
Large purchases do not need to be planned.
12
Which of the following statements does NOT describe a housing lease?
specifies the responsibilities and rights of both parties
It is a legal contract between the tenant and the landlord
terms of the lease agreement are not legally binding.
should not be signed until the tenant understands
13
When referring to investments what is the relationship between risk and return?
Lower risk takers expect to receive higher returns.
Higher risk takers expect to receive higher returns
Higher risk takers expect to receive lower returns
No relationship exists between risk and return
14
Which of the following is a characteristic of electronic banking?
24 hour access
variety of methods available
fast and paperless
all of the above
15
What's the purpose of a diversified portfolio?
it increase the risk
allows you to focus on one stock
it reduces the risk
indicates a bad decision
16
A credit report could be characterized as:
A report including personal medical information
A record of a consumer’s credit history.
A record of reports the consumer has written
A report not used by lenders to determine credit ability
17
What does a checking account provide to the consumer
Real estate purchased as an investment
Lending money to an organization
Plans to set aside money for tax-deferred retirement
Paper checks or debit cards used to withdraw money deposited
18
Mouthwash is 10 oz for $2.29, 12 oz for $2.89 and 16 oz for $3.39. Which is better buy?
16 oz for $3.39
10 oz for 2.29
They have equal value
12 oz for $2.89
19
What services are available at a credit union?
Share accounts and share draft accounts
All of the above
FDIC protection
Real estate investments and stocks
20
Which type of account offers tiered interest rates based on the amount in the account?
interest earning checking acct
stocks
money market
certificate of deposit
21
What rate of return is needed for a person to double an investment in 6 yrs?
8.3%
6%
12%
10%
22
Who could help analyze the stock market and develop an investment plan?
employer
real estate agent
landlord
broker
23
Stock analysts use what term for a market which is doing well?
bear market
impressed market
increased market
bull market
24
What factors can affect your beginning salary?
the size of the company
the average salary for the job you are considering
All of the above
your education and experience
25
Which of the following statements is NOT true about direct deposits & payments
Direct payment authorizes bills to be paid
allows pay and benefit checks to be directly deposited
Direct deposit can help to prevent check fraud
No authorization is required by account holder
26
How does inflation affect the rate of return of investments?
Rate must be deducted from investment rate of return
Decreased rate of return occurs if lower than inflation rate
Increased rate of return occurs if less than inflation rate
Has no impact on rate of return
27
Which of the following would be considered an advantage to renting versus owning?
tax deductions
equity
less maintenance and repair
more privacy
28
What is one major difference between installment credit and non-installment credit?
installment allows you to pay different amounts each month
an example of installment credit is a retail credit card
installment requires payments be the same amount each month
none of the above
29
What would be an example of an opportunity cost of investing in the stock market?
all of the above
buying a new car
putting money into savings
going on a vacation
30
What is a way for consumers to save money when purchasing automobile insurance?
Take advantage of discounts
All of the above
Shop around
Buy appropriate coverage
31
Which would yield a higher rate of return on $5000 investment @ 5% interest for 10 yrs.
Compound interest compounded annually
Simple interest calculated at the end of 10 years
Compound interest compounded semi-annually
Compound interest compounded quarterly
32
What is the purpose of Form W-4?
document a refund or figure a balance due to the IRS
itemizes how much money was earned & taxed paid by employee
allow the employer to withhold federal income taxes
allow the employees to participate in a tax-deferred savings
33
An payment to landlord covering anything beyond normal wear on a rental unit prior to moving in
security deposit
rental fee
maintenance fee
down payment
34
Which of the following statements about the Federal Reserve is not true?
Vaults store currency
Ensures demand for currency doesn't disrupt banking system
Does not process commercial checks
Responsible for meeting public demand for currency
35
An advantage of using credit is:
Not having to carry large amounts of cash.
The many forms of hidden fees on the credit card bill
The increase of being a victim of fraud or rip-offs.
The increased cost of purchase because of interest charges
36
Which of the following is NOT considered part of a lease?
eviction terms
rent amount
property tax fees
late payment penalties
37
A well written financial goal includes the following elements:
Specific, measurable, action, realistic, and time bound.
Personal values, financial planning, direction, and action
Specific, measurable, attainable, realistic, and time bound.
Specific, money, action, result, and time bound.
38
A career is defined as
A degree obtained from an accredited institution
An employment position obtained to earn money
An evaluation of one’s aptitudes and interest
A commitment to a profession which requires training.
39
A landlord may evict a tenant
if tenant isn't staying on premises
if tenant fails to make minor repairs
if landlord gets better offer
if tenant fails to pay rent
40
What is the purpose of form W-2?
itemizes how much money was earned & taxes paid by employee
allow the employees to participate in a tax-deferred savings
to document a refund or figure a balance due to the IRS
allow the employer to withhold federal income taxes
41
Which are characteristics of electronic banking?
24 hour access
fast and paperless
all of these
variety of methods available
42
Electronic banking allows customers to:
Stop reconciling accounts because of the electronic tracking
Access accounts only during business hours 9 hours a day.
Perform transactions via a teller during business hours
Perform transactions 24 hours a day.
43
What is an example of an opportunity cost of investing in stocks?
buying a car
all of these
going on vacation
putting money into savings
44
What is the purpose of the Federal Deposit Insurance Corporation (FDIC)?
Provide insurance protection for credit unions
Insure federally chartered commercial banks against loss
Protect stock market investors from possible loss
Distribute interest earnings to depositors
45
Which of the following could be an impact of a poor credit score?
may jeopardize future employment opportunities
all of the above
higher interest rates on credit cards and loans
may cause denial of future loans
46
What is the purpose of the Truth in Lending Act?
Gives consumers the right to know the total cost and terms
allows consumers to know their neighbor’s credit score
allows consumers to make any changes they wish to credit
provide lower interest rates on loans
47
A person would choose to take an interest inventory test to:
learn about available jobs in areas
build personal inventory of goods
learn about possible careers related
develop personal values and goals
48
Which is a necessary step in making an informed career decision?
Research of future career opportunities
Development of personal goals
All of the above.
Self-evaluation of aptitudes and interests

Personal Finance Final Exam Review Flashcards | StudBud