consumer chapter 1 notes

¡Supera tus tareas y exámenes ahora con Quizwiz!

what strategy should you use to pay off multiple sources of debt if you want to pay the lowest amount of interest over time

high rate method

a loan with a shorter term length will have_______ monthly payments, and you will pay _________ in total interest

higher, less

dex has a credit card with a $1000 credit limit. His outstanding balance is currently $800. What is the maximum amount he can now spend on this credit card

$200

you bought 10 shared of stock in Streaming video co for $40 per share. Two months later you sold the 10 shared of sock for $80 per share. What was your profit or loss on streaming video co stock. (assume that streamingvideoco didn't pay a dividend that you didn't incur any trading fees during that period)

$400 ($350 on test)

what is the current limit that can be contributed to an IRA in a year for someone under 50 years old?

$6500

what is the lowest and highest credit score you can have

300-850

which of the following does someone contribute directly from their paycheck

401K

what is one question an investor should ask when deciding whether or not they would like to open a Roth IRA or a Traditional IRA

Do I want to pay taxes now or later

what kinds of behaviors can prevent people from making smart investing decisions

exiting the market because that's what everyone else is doing

borrowers can reuse close end credit

false

the federal law that regulates credit reporting agencies is FCHA

false

what three things may a borrower need to prove in order to obtain credit

financial position, income, and collateral

what is the name for a time frame within which you may pay your current balance in full and incur no finance charge

grace period

how is a bond different from a stock

a bond is a loan you give to a organization while a stock is partial ownership in a company

trudy tells her mom that she wants to buy a house within two years of graduating college. Her mom says trudy will need a down payment first. What is a down payment

a large sum of money you pay when taking out a mortgage so that the principal of your loan is smaller

how do credit bureaus compute credit scores

a point system

what is our goal when it comes to investing

achieve financial stability

what is true about a debit card, prepaid debit card, and a credit card

all three are completely different

amy and chuck each buy a house in the same neighborhood for $250,000. Amy's monthly mortgage payment is $400 more per month than Chucks. Which of the following statements could explain this difference

amy chose a shorter term for her mortgage, so her monthly payments are higher

what represents a secured debt

an auto loan

heather realized she has taken out too much debt and it has started to negatively impact her ability to budget. she has decided to pay off this debt in full as soon as possible. all of the following would be beneficial strategies expect

applying for another credit card to use in case she runs out of cash paying off her debt

which of the following could have a negative impact on your credit score if done in a short period of time

applying for multiple credit cards

melvin is 19 years old and wants to begin establishing a credit history. Which action should he take to meet that goal

ask parents to cosign a credit card or add him as an authorized user on their credit card

which of the following statements is true about compound interest

compound interest allows you to earn interest not only on the amount you have saved, but also on the interest you've already earned

Katrina works for penny's pickles, which offers a 401(k) match for up to 3% of her salary, which is $65000 per year. in her budget, she only has $150 per month available to save for retirement. What should she do

contribute the full $150.mo to the 401(K) because her company will match that full amount, "doubling" her investment every month

what is the term for the use of someone else's money, borrowed now with the agreement to pay it back later?

credit

what is a detailed written report of your credit history, compiled by a credit bureau, and used to determine your future credit worthiness

credit report

who tracks all of your credit information

credit reporting agencies (equifax, experian and transunion)

you're paying your credit card bill and your student loan payment each month, but you're falling behind on your auto loan payment. Which friend's advice could have a negative impact on your credit score

debbie says "stop making the credit card payment for a few for a few months until you're caught up on the auto loan"

why is diversification a recommended investment strategy

diversifying your portfolio helps reduce risk

what are the three big reasons to save money

emergency fund, large purchases, and wealth building

daniel has saved $2000 in a savings account that earns 0.5% interest annually. What will most likely happen to the purchasing power of his savings over time

his purchasing power will decrease because the interest rate is lower than the historical rate of inflation

which of the following statements is correct about secured loans

if the borrower does not make payments, the lender can repossess the item

as diversification increases, what happens to risk

increases

what is a retirement savings plan that offers tax advantages and allows individuals to set aside a specified amount each year

individual retirement account

how does investing in the stock market differ from putting money in a savings account at a bank

investing allows you to accumulate wealth for retirement while saving is best for short term purchases or emergencies

which of the statements below best describes the relationship between risk and return when considering an investment

investors expect to earn a higher return when they invest in a high risk asset

an actively managed mutual fund

is a mix of two types of stocks and two types of bonds to diversify your portfolio

what is the term for how quickly an asset can be converted to physical cash without the loss of value

liquidity

your friend confides in you that he has a low credit score. What is the single best way for him to improve his score

make on time payments

which best describes the debt snowball method for paying off debt

make the monthlty minimum payments on all your debts, and then put any extra cash toward the debt with the lowest balance

select the statement below that accurately describes a characteristic of a credit card

making full payments on- time every month is the only way to avoid interest charges

which of these credit payback strategies would lead to the highest overall cost

making the minimum payment (3% of your credit card balance) every month with an occasional late payment

as a young adult, all of the following are good strategies for building credit, except:

open two credit cards and hide them from your parents or guardians

what are the two most important factors in calculating your credit score

payment history and total debt

which retirement plan is where you are promised a fixed benefit each month

pension

nancy is new to investing and is eager to get started. All of the following are things she should do except

pick individual stocks to see if she can beat the market

taylor is about to go car shopping and she has $5000 saved that she can use for a down payment while still having extra cash in her emergency fund. She expects the exact model car she's looking for to cost $35,000. If her top priority is having the lowest monthly payments possible, which advice should she follow?

put in $5000 for your down payment, and choose a loan with a long term length

an excellent credit score will help which aspect of car financing

qualifying for a low interest rate

what investment product are you able to influence its value

real estate

what is the least liquid of all consumer investments

real estate

all of the following would show up on a credit report except

salary of your current job

which strategy should you use to pay off multiple sources of debt if you want to maintain your motivation to continue paying off debt

snowball method

sarah is explaining what social security is to her younger brother. Which of the following descriptions should she use

social security is a government program that pools contributions from current workers to fund retirement support benefits to those who are eligible

which of the following individuals or groups would be the least likely to look at your credit score

someone interviewing you for a job

if you are having trouble making auto loan payments and are really following a tight budget, which recommendation represents the worst advice?

stop making payments on some of your debts so you can focus on getting the most expensive or largest debts under control

credit card disclosure: "your due date is at least 25 days after the end of the billing cycle. we will not charge you interest on new purchases provided that you have paid your previous balance in full by the due date each month." identify the true statement.

the 25 days after the end of billing cycle is referred to as the grace period

why it's often a good idea to pay more than the monthly amount due on an amortized loan

the extra payment will be applied to the principal amount you owe, which will pay down your debt more quickly

why are index funds (mutual funds) such a popular investing option

they are a mix of 2-3 individual stocks that can help you diversify your portfolio

how can someone make money from investing in a stock

they receive dividends or they sell the stock at a higher price than what they bought it for

why would credit card companies prefer that their cardholders make the minimum monthly payment every month rather than paying their total balance in full

this enables the credit card company to make more money

timmy has applied for three credit cards in the last year. Two of which were accepted. What does this say about his creditworthiness

timmy's creditworthiness is weak since he applied for 3 credit cards in one year

you have a credit card that you use regularly for small purchases with the goal of improving your credit score. Which strategy would have the greatest positive impact

use less than 30% of the credit limit and pay it off in full every month by the due date

what is the investment product where you buy the beneficiary position on a life insurance policy of someone who is dying

viaticals

what is true about debit cards and credit cards

with debit cards, you're spending your own money at point of sale, but with credit cards, you're getting a loan that you need to pay back later

what is an advantage of using a credit card

you can make an emergency purchase that you otherwise don't have the money to pay for right now

what benefits do you receive by taking our a loan with a cosigner

you have a better chance of getting approved and getting a lower interest rate is the cosigner has good credit

as a shareholder in a public company, what are the benefits available to you

you may receive dividends from the company, if the company pays them, and you have ownership of a portion of the company

why is it important for you to understand your risk tolerence before you start investing

you should tailor your investment portfolio so that is assumes an amount of risk you are comfortable with

which response best completes the sentence. "it's best to begin establishing credit when you're young because _____"

you will likely need a credit history to rent your first apartment, finance your first car, or open an unsecured credit card

reading through a credit card's schumer box, you see the APR for a specific card is set at 9.99%-23.99%. which statement is true?

your apr will be within that range, depending on the strength of your credit history

How can your credit score impact your financial well being?

your credit score can determine whether you are approved for a loan and what the interest rate on that loan will be


Conjuntos de estudio relacionados

Clinical Chapter 23: Oxygen Therapy

View Set

Week 03 - C++ Operators: Relational, Logical, and Ternary

View Set

AP English Language + Composition - MCQ

View Set