Economics Unit 5
Select THREE things to consider when supporting a charity.
Choose whether to volunteer, donate goods, or donate money. Keep track of all charitable donations. Investigate the trustworthiness of organizations or groups that claim to help your cause.
The ____ Industrial Average is an index tracking 30 of the most influential American companies.
Dow Jones
Select TWO facts about exchange-traded funds (ETFs).
ETFs can be traded in real time on a stock exchange. An ETF is a portfolio, or basket, of investments.
The ___ is determined by a formula and represents the amount of college costs for which a family is responsible.
Expected Family Contribution
_____ student loans do not have to be repaid until after a student finishes attending college.
Federal
What is a danger associated with using federal loans to pay for college?
Federal loans are easier to get than other types of aid. Since they are only taken out as needed and do not have to be repaid until a later date, many students find repayment to be a real burden after leaving school.
If you wish to pursue grants, work-study, or loans, the first step is to fill out the ___.
Free Application for Federal Student Aid
Select FOUR important steps to purchase a home.
Get pre-approved for a loan. Select a real estate agent. Hire an expert to do a home inspection. Make arrangements for utilities and insurance.
Select TWO reasons that investors should avoid too little risk.
Inflation might chip away at purchasing power more quickly than the investment will grow. Too little risk will not fully harness the power of compound interest.
What impact does a college education have on future earning potential?
It has been clearly demonstrated through historical data that workers with a college education usually earn much more than those without it.
Select THREE facts about an individual retirement account.
It is a retirement savings account to which individuals may make tax-deferred contributions. Only people who earned income may contribute to an IRA. As of 2015, the limit of annual contribution is $5,500.
Select FOUR reasons stocks tend to increase in value over time.
New ideas help make businesses more profitable. Businesses take advantage of trade to open new markets. Employees add value through their labor. Technology increases profits by allowing businesses to work more efficiently.
Select FOUR principles to follow when investing.
Pay attention to commissions and fees. Rebalance your investments every year. Evaluate your tolerance for risk. Diversify your investments.
Why should consumers avoid paycheck loans?
Paycheck loans involve high interest rates and fees.
Select TWO facts about 401(k)s.
They are retirement savings accounts to which employees and employers make tax-deferred contributions. Companies often match employee contributions.
Select THREE facts about mutual funds.
They encourage regular, small investments and may charge a load for each transaction. They were created with the goal of helping investors benefit from diversification and the skill of expert money managers. They are pools of funds collected from investors and are invested by a money manager.
The Fair Credit Reporting Act (FCRA) requires the three major credit tracking agencies to provide you with____ upon request.
a free credit report once every 12 months
Which answer is NOT an example of a commodity?
a television with new special features
The value of a home minus the amount still owed on the loan representing the worth of a home in real terms to the homeowner is called ___.
equity
If interest rates go up, bond fund prices ____ as investors will move to seek better returns from new bonds with higher rates.
fall
Concerning future earning potential, the college you choose to attend is more important than your chosen field of study.
false
The Free Application for Federal Student Aid is the best way to pursue _______ aid for college expenses.
federal
If a homeowner can no longer pay the home loan, the lender will likely _____ on the property.
foreclose
A(n) __________ is the taking over of a home once a homeowner can no longer pay for the home loan.
foreclosure
A(n) __________ loan offered by banks is used to pay for a house.
home
The performance of a segment of a market or even an entire market may be tracked by a(n) _____.
index
This type of account allows an individual who earns income to make tax-deferred investments for retirement.
individual retirement account
What a stock price really represents is ___.
its investor's expectations for the company's future profits and growth
Which type of automobile insurance is required by every state?
liability
A(n) ____ is a loan in which the property purchased secures the loan.
mortgage
A(n) ______ loan is one in which the property purchased secures the loan.
mortgage
This type of investment was created to help investors pool money and benefit from professional money managers.
mutual funds
Select FIVE sources of scholarships.
nonprofit organizations employers professional organizations colleges private companies
What does the blue shading signify?
occupied rental units
Select FIVE factors taken into consideration when a credit score is calculated.
opening and closing accounts length of credit history timeliness of payments past bankruptcies credit utilization
Multiple people share the profit, loss, risk, and work of ownership in a(n) _____ business structure.
partnership
Seeking a financial advisor is an especially good idea for _____ investors.
passive
________ loans are offered by independent businesses as an advance on the customer's paycheck.
paycheck
The ________ is the amount borrowed that is used to calculate interest payments.
principal
A(n) ____ tax is assessed against the value of the home and the land it sits on.
property
______ typically increase in value over time due to employee labor, new trade opportunities, new ideas, and technological advancements.
stocks
In which direction has the AAPL moved during the current trading day?
up
What does the red shading signify?
vacant rental units
Select THREE things covered by homeowners insurance.
valuable items stolen from the garage medical care for a guest who receives a burn from the grill on your back porch part of the home destroyed by a fire
Why might a homebuyer choose not to use all of the credit extended by a lender?
Banks might agree to loan a homebuyer more than he or she can reasonably handle.
What was the price of BAC at the start of the trading day?
$17.62
How much would it cost to purchase 50 shares of AAPL, including a fee (commission) of $10.95?
$5,907.45
If you own 300 shares of a company that has 5,500 shares, what is your percent of ownership?
%5.45
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In___, the possibility exists for a person to achieve business success mostly free of government regulation or to fail miserably and spectacularly in the attempt.
America
Select THREE responsibilities businesses have to consumers.
A business must also comply with the Americans with Disabilities Act of 1990. A business cannot advertise a product or service as being able to do something that it cannot. A business cannot sell an item that is known to be defective.
Individuals will not owe tax on any earnings withdrawn after age 59 ½ from a ___ individual retirement account.
Roth
________ is an item of value promised to a lender if a loan is not repaid.
Security
a) Identify potential places to rent. b) Arrange for services such as electricity and cable. c) Meet with landlord or apartment manager to ask questions and tour the property. d) Submit an application and pay the security deposit. e) Complete a detailed inspection of the property to determine issues.
a) 1 b) 5 c) 2 d) 3 e) 4
a) a stock exchange noted for its trading of agricultural and livestock goods b) an electronic stock exchange that has historically emphasized technology companies c) this American stock exchange is the largest in the world d) a stock index that tracks hundreds of the largest publicly traded U.S. companies e) an index tracking the stock performance of 30 selected large companies
a) Chicago Mercantile Exchange b) NASDAQ c) New York Stock Exchange (NYSE) d) Standard & Poor's 500 Index e) Dow Jones Industrial Average
a) Renters are more likely to deal with a private individual as a landlord and not a company. b) Renters enjoy the convenience of not having to mow a yard or do their own maintenance. c) Renters can access amenities such as a pool, game room, or gym.
a) House b) Apartment c) Apartment
a) the process of a borrower giving up any valuable property in order to pay off lenders b) a bank account that allows customers to pay for items in stores or through the mail with paper "tickets" or electronic transfers that are drawn directly from the funds in said account c) resisting the temptation to receive an immediate reward, and waiting instead for a later, greater reward d) the income the lender receives from loaning money e) the length of time after which a loan or CD must be repaid f) a type of savings account that offers a higher interest rate but requires a higher balance and deposits g) an account that provides a means to hold money with a minimal interest rate h) a type of savings account that pays higher interest but does not allow the premature withdrawal of money without paying a penalty
a) bankruptcy b) checking account c) delayed gratification d) interest e) maturity f) money market account g) savings account h) time deposits
a) a debt investment in which an investor loans money to be repaid with interest b) a marketplace where stocks are bought and sold c) affected by fluctuations in the exchange rate of currencies, which can influence one's investments d) a basic good that is interchangeable with other commodities of the same type e) one who owns a stock (or a share) of a public company f) a bond issued by the government and backed by the country's credit g) an investment representing shares of ownership or value of a publicly traded company h) a short-term security sold by the Department of the Treasury that is generally considered very safe but offers a low yield in return i) a measurement of the performance of a particular stock market or a defined segment of a market
a) bond b) stock exchange c) foreign markets d) commodity e) stockholder f) government security g) stock h) treasury bill i) stock index
a) a person who serves as a middleman between the investor and the market b) a company that allows for shares of ownership to be publicly traded c) investment in an established company that maintains a growing or even stock performance d) a service charge for investment advice or transaction e) any multiple of 100 stock shares f) a portion of a company's profit distributed to shareholders g) a company that does not allow the trading of its ownership by stockholders; does not trade publicly h) a person who can help you come up with a sound plan for saving and investing i) handles investment transactions and keeps track of your investments in an account
a) broker b) public company c) safe stock d) commission e) round lot f) dividend g) private company h) financial advisor i) brokerage
a) designed to pay for repair or replacement of an automobile that is in an accident b) designed to protect against all types of damage or destruction to an automobile, including "acts of God" c) provides financial assistance for the cost of medical care d) designed to cover a house, the belongings within, or any accident that may occur on the property e) provides benefits if a worker is unable to work f) a policy that is designed to protect damages to other people or property in the event of an automobile accident g) pays out a specified amount if the insured person dies during a limited period of time h) an insurance product that has both insurance and investment components that pays out when the policy holder dies i) an organization established to help people in need j) a periodic payment for an insurance product
a) collision insurance b) comprehensive insurance c) health insurance d) homeowners insurance e) disability insurance f) liability insurance g) term life policy h) whole life policy i) charity j) premium
a) a legal entity combining aspects of corporations, partnerships, and sole proprietorships that protects owners from personal liability b) a legal entity distinct from its owners that is licensed by the government to conduct business c) rules set by regulatory agencies that a business must follow d) that legal responsibility of an individual regarding the actions of his or her business e) a company owned by a single individual f) a company owned by two or more people with no board or corporation in support g) a legal entity whose goal is to meet a need rather than earn a profit
a) limited liability company (LLC) b) corporation c) regulations d) personal liability e) sole proprietorship f) partnership g) nonprofit corporation
A(n) _______________ is a payment charged for processing an application.
application fee
a) spreads the risk, work, and potential profit or loss between multiple owners b) gives the owner the greatest freedom, but subjects the owner to unlimited personal liability and is the business type that has the most difficulty securing a loan c) keeps individuals and stockholders who own the company from being directly held liable for the actions of the company d) protects small-business owners from personal liability
a) partnership b) sole proprietorship c) corporation d) limited liability company (LLC)
a) a home that is the most expensive and most difficult residence to maintain b) an apartment-like dwelling in which units are individually owned and costs of maintaining common grounds are shared c) an economical residence that does not always hold its value and is susceptible to storms d) a city-based residence with a porch that is less expensive than a single-family home
a) single-family home b) condominium c) manufactured home d) townhouse
a) Neither the rate nor mortgage payments change in these loans, which are available to all buyers. b) The rates and mortgage payment can change as the Federal Reserve changes interest rates. c) The federal government insures these loans, which are a legacy of President Roosevelt's New Deal. d) Members of the military and veterans may qualify for lower interest rates and no down payment.
a) standard fixed-rate loan b) flexible-rate loan c) FHA loan d) VA loan
a) This represents investors' expectations concerning the future profits and growth prospects of a publicly traded business. b) These short-term loans charge very high fees and interest rates. c) Every state requires drivers to have this insurance. d) This affects one's future earning potential more than anything else. e) This is a measure of the value of a house to a homeowner after subtracting any loan balance. f) Safe stock companies often make these regular payments to shareholders.
a) stock price b) paycheck loans c) liability insurance d) level of education e) equity f) dividends
a) an agreement between a buyer and seller to exchange goods or services b) a personal record that gives bank customers a way of keeping track of their checking balance c) report in which the bank informs its customers what account activity the bank has on record d) the total amount an employee is paid before any deductions e) comparing two sets of records to ensure accuracy
a) transaction b) check register c) bank statement d) gross wages e) reconciliation
a) a short-term payment plan with a college that avoids interest and high fees b) direct aid from the government, a school, or individuals based on eligibility c) programs such as the Montgomery G.I. Bill that cover many college expenses d) reduces one's tax burden dollar for dollar e) working part time while attending school to pay tuition f) a sum of money awarded to a student based on merit or need to pay educational expenses g) working an off-campus job related to one's field of study h) borrowing money that does not have to be repaid until after one leaves school
a) tuition payment plans b) grants c) military aid d) education tax credits e) work-study f) scholarships g) co-op programs h) federal loans
A(n) _____ must give up valuable assets to help pay debts when declaring bankruptcy.
borrower
Banks serve as centers where many individuals can combine their money to create a large pool of ___.
capital
A(n) __________ loan offered by banks is used to assist in the creation of a small business or to help in the advancement of that business.
commercial
A _____ is a charge for financial advice or a transaction.
commission
Banks offer ___________ loans to individuals to meet personal or household needs.
consumer
Making payments on time will boost one's ____ score.
credit
One's ________ cumulatively rates one's level of risk when borrowing money.
credit score
Your ability to buy certain big-ticket items depends on your ___.
credit score
Smart investors use _____ to spread their money among multiple investments.
diversification
Select FOUR types of information needed to fill out the FAFSA.
records of assets, including savings and checking accounts and investments tax records (If you are dependent, you will need your parent's or guardian's tax records.) records of untaxed income such as child support received, etc. your Social Security number or alien registration number
If interest rates fall, bond funds will ___ as investors are willing to pay a premium for older bonds that have higher interest rates.
rise
It is important to evaluate _____ before committing to an investment.
risk
A fee that is collected by a rental agency or individual to protect against any possible damage to the property is called a(n) ___________.
security deposit
For most consumers, a home loan represents the ___ transaction they will ever make.
single largest
One ideal of the American Dream is to own a(n) _____ home not connected to any other building.
single-family
This type of loan charges the same rate and payments for the life of the loan.
standard fixed-rate
