fin lit test 1

What is the total monthly payment for this mortgage? Principal Per Month: $1000 Interest Per Month: 13.5% Property Tax Per Year: $4,536 Home Insurance Per Year: $2,796

$1,746

Long-term goals should take around how many years to complete?

5 years

What is referred to as the amount of interest paid or earned in one year without compounding?

APR

Which of the following DOES NOT explain a reason why you should budget your money?

Budgeting helps you generate income.

Which one of the following statements is not a basic premise of investing and accumulating wealth?

Buy assets which depreciate in value

Each of the entrepreneurs persevered, what does it mean to persevere?

Continue with something despite difficulty or delay

Which American President signed the FAIR Act?

George W. Bush

Which of the following is an example of earning interest?

Jenna puts $100 in a savings account in 2016 and sees a 3% increase to her account without depositing additional money

Which of the below individuals has the best capacity to pay back a loan?

John, a 35-year-old public school teacher making $100,000 per year takes a $10,000 loan to buy a new vehicle.

An 11th-grader may begin his training with the local vocational school in heating ventilation and air conditioning (HVAC) while completing requirements for high school. However, a 23-year-old who holds a high school diploma may decide to pursue a career as a dental hygienist while working full-time in a dentist's office. Which of the following is a variable that can differ in when they begin their respective careers?

Length of training/time AND experience in liue of classroom training

Which of the following examples is NOT a great way to improve your credit score?

Taking out a massive loan on a luxury vehicle that is over budget

Which of the following would be a great example of a credit company implementing a grace period?

The IT Credit Card from Discover lends you credit for free for 30 days, before charging interest

Which of the following BEST describes why a lender might offer more money and lower interest rates to an individual with a high paying, full time job?

Their income makes the lender comfortable that they will be able to repay the loan

Which of the following is true of an unsecured loan?

They are exclusively for cars, houses, and other large purchases??

Which of the following are likely an example of "bad debt?"

Tom taking at a loan on the purchase of a new billiards table and misses the first two monthly payments.*

Most banks do not give borrowers a simple interest loan, unless a person is a veteran and thereby may qualify for THIS type of loan?

VA loan

An unrealized gain isn't taxed until the ___________________ is actually sold.

all of the above

Devising a plan, or course of action for setting goals, is pivotal to achieving one's success. Tony had a lifelong goal of becoming an attorney, which of the following could thwart this goal?

all of these

How do you avoid identity theft?

all of these

What are among the possible negative effects of having financial distress from outstanding debts?

all of these

Which do you have to remember when having a credit card?

all of these

Which of the following can help someone improve their credit score?

all of these

Which of the following examples can help a recent college graduate to begin a Master's in Business Administration?

all of these

Which of the following examples is an example of voluntary debt; these are debts a person or business creates in good faith and not under duress?

all of these

Why can it be financially risky to launch a new business?

all of these

Employers are expected to make reasonable accommodations in work procedures, facilities, and equipment as part of the __________________________.

americans with disabilities act

Income, expenses, and what is left over are all components of which of the following?

budget template??

What is a risk that has been given a great deal of consideration, and for which the possible benefits and costs have been determined?

calculated risk

Which of the following terms explain thoughtful consideration and illustrate that the potential cost and benefit have been analyzed?

calculated risk

When applying for a loan, the lending institution evaluates a potential borrower's ability to complete repayment on a loan, cash on hand, collateral, and job status, play critical factors at arriving on this decision.

capacity?

The savings, interests, and other assets a borrower has that can be used to pay back the loan are collectively known as:

capital

All of the following are financial institutions EXCEPT:

car dealerships

When John graduated from college he aspired to become a social studies teacher, fifteen years later he holds a Doctor of Philosophy and is looking to become superintendent of schools. What is this change mostly an example of?

career goals

Borrowing too heavily into this term can be devastating to a persons capacity to repay loans.

cash flow

Borrowing too much into your what can be devastating on your financial future?

cash flow

Which forms of bankruptcy most impact individuals with severe financial burdens?

chapters 7 &13

When a bank looks into if a potential borrower has a history of paying back loans, they are attempting to assess the borrower's:

character

A(n)________________ is a place in which you keep money that you want to spend on a day-to- day basis.

checking account

In a secured loan, you may pledge property of value like a car or boat. What is this called?

collateral

Which of the 5's of Credit does owning a fishing boat best line-up with?

collateral

Which of the following terms is NOT considered a characteristic of an entrepreneur?

confrontational

Which of the following can be devastating when people borrow too much into this?

consolidated loans

Which of the following is a person that purchases and uses goods or services?

consumer

If you suspect your credit card is being used fraudulently or is lost, what should your first action be?

contact the credit card company

A legally binding agreement between an employer and employee?

contract

Which of the following is NOT a financial institution?

corner store

Which of the following monetary transaction tools are the most likely to cause debt problems for individuals?

credit card

Which form of payment allows you to pay for goods/services where the money is taken directly from your bank account?

debit card

What basically compares what an individual owes compared with how much they earn monthly?

debt to income ratio

Chris is about $200,000 in credit card debt, but tells his credit counseling he can keep spending money because "more is coming." The emotional side of debt is clearly impacting Chris. What state of mind is Chris in?

denial

Which government agency enforces workplace laws and regulations?

department of labor

Which of the following is a NOT a primary source of investment funds?

depreciation on investments

This is the best way you can protect yourself from identity theft.

do not write down your PIN

What term defines enterprising people who identify good opportunities and undertake new business ventures?

entrepreneur

This act prohibits unequal pay for men and women doing substantially the same work?

equal pay act

What term best explains the money that you need to spend during a week or a month?

expense

What should one reduce their fear of if they're looking to become more enterprising?

failure

When an individual deposits cash into a savings account, it is imperative that the financial institutions offers ____ interest rates, but when borrowing money, it is more desired to find the financial institution that offers ____ interest rates.

high/low

When someone steals your credentials and pretends to be you in order to steal your money, it's referred to as ______________________.

identity theft

If you lose your credit card, typically there is __________ liability on any purchases made fraudulently.

immediate??

Terms of a contract which are not written down but are expected because they are obvious.

implied terms

Thomas Edison invented which of the following in 1879?

incandescent light bulb

Which of the following is NOT provided protection from employment discrimination by federal law?

income or age??

Michael Jordan, retired NBA superstar, used his successes as an athlete to become a billionaire. What gains are entrepreneurs looking to make with each venture?

increased cash flow

Someone that is a self-starter or going above and beyond tasks at hand without being directed by a superior refers to which of the following traits?

initiative

What is the money called that the bank adds on to saving and loans so that you end up earning or paying more in the long run?

interest

Which of the following is not one of the three functions of money?

medium of account

Psychologists argue that folks living in excessive debt may lead to _________?

mental/physical distress

What is a loan that is used to finance the purchase of a home?

mortgage

The analogy between the wild animal and domesticated pet can best apply to which of the following personal finance ideas?

nature of debt

If a potential borrower has an 801 credit score, which of the following are they considered to have?

nearly perfect credit

What is the personal finance measure that compares the debt one owes to overall income?

personal debt ratio

If you keep an asset for longer than 12 months the government will ________________your tax when you sell that item.

reduce

Hal charges Jim to operate his business within the office building he owns. Identify Hal's source of income:

rent

Which of the following is NOT a building block of basic investing?

renting assets

What is the process of a lender taking back a product when the borrower stops making payments?

repossession

What is one thing successful entrepreneurs do before going ahead with a new business?

research

What term best explains a plan for the amount of return compared with an investment's cost?

return on investment

Which rule is a reliable way to estimate the number of years it will to double the value of investment?

rule 72

Attaining an A in history class is an example of this type of goal?

short term goal

What does it mean to have your identity stolen?

someone else is pretending to be you

One important thing that a budget helps to capture, which can help project future months cash flow, is called...

spending history

What is an important part of being an entrepreneur?

taking risks

Asking about various components of a loan agreement such as the interest rate and penalties for late fees are components for which of the following?

terms & conditions

When looking at the compound interest formula, A = P(1+r/n)nt, what does the r represent?

the annual interest rate in decimal form

Giving up of one thing in return for another is considered this?

trade off

Many economists have argued that these adjustable-rate mortgages greatly contributed to the 2007-2008 financial collapse because these are mortgages that have what kind of interest rate?

variable

Richard Branson is a famous entrepreneur of Britain, which company did he create and at one point owned a great deal of shares in?

virgin

What would Bill fall under, he applied and acquired for a new credit card and uses it regularly?

voluntary