Finance Final

How many free credit reports are you legally entitled to each year?

1 for each credit bureau, so 3 total

If you invest $200 and earned $5 on your investment, what would your Rate of return be?

2.5%

FDIC covers up to

250,000 dollars

What is the numerical range for credit scores that the three credit bureaus use?

300-850

Which percentage of your credit score is determined by your payment history

35%

What credit score is considered poor?

500-579

rule of 72 formula

72 divided by interest rate (not in decimal) equals number of years needed to double the principal investment

A budget is

A plan for making and spending money

The amount of money you gain from an investment

Capital gain

Your share of company profits when you invest in stocks.

Dividend

The US government agency that protects consumers against false advertising and other unfair business practice.

FTC (Federal Trade Commission)

Stealing somebody's personal info to do something is an example of what fraud

ID theft

Why is your credit score important

It can affect your ability to get a loan or have a credit card

A type of investment where you purchase a collection of stocks, bonds, and other investments.

Mutual funds

Worlds largest electronic stock market

NASDAQ

Largest stock exchange

New York Stock Exchange (NYSE)

If your roomate forgets to pay the electric bill every though it's his turn to pay, will it effect your credit score?

Only if my name is on the bill

How can you avoid paying interest when using a credit card?

Pay your entire balance at the end of each month.

The ratio of money you gain on an investment in relation to the amount of money that was invested.

Rate of Return

Most of the banks you see that offer banking options to individuals would be considered

Retail Banks

A nine digit number given to every US citizen for identification

Social Security Number

An individual who has a license to buy and sell stocks and other investments

Stock broker

What is a credit card balance

The amount of money you still owe to the credit card company

What is compound interest

When interest is added to the principle amount, so interest earns more interest

What's a money order?

When someone who does not have a checking account sends money to someone at a store like meijer

What's a credit score

a numerical rating that represents the perception of how likely you are to pay your debt

when you're 16 you don't need an adult, an ID, or an initial deposit to open your account

an adult

What type of economy would not have currency and would trade instead

barter economy

When the stock market is doing poorly it is called

bear market

To deposit half a check and keep the rest as spending money you use what endorsement

blank

A type of investment where you are basically lending money to an organization and they pay you interest

bond

When stock market is going good it's called what

bull market

Getting a check from the bank's account is known as a

cashier's check

What is a CD

certificate of deposit which is a savings vehicle

A personal check that has been stamped by a bank as paid

certified check

An order to the bank to send payment to somebody is known as

check

Any sort of fraud that involves drawing out money from a bank account that does not have sufficient funds to cover the check

check kiting

The practice of dipping a check in a chemical solution designed to take the ink away is called

check washing

What methods could people use to alter a check

check washing, disappearing ink, and changing the payee

Once a check reaches the bank and the money is taken out of your account the check is considered

cleared or cancelled

These banks specialize in giving loans to a business and investments

commercial bank

Payday Lenders

companies that make small short-term, high-interest loans to tide a person over "until payday"

Making a fake check with the purpose of fraud is

counterfeit check

When someone gives you a check for more than you owe them, and you must wire back the money

counterfeit check

Periodic interest payments on a savings bond are called

coupons

How can a scam artist perform phishing

creating a fake website

What offers most fraud protection on vacation

credit card

What payment method doesn't affect your checking account

credit card

Which type of the loan would have the highest interest rate: New car loan, mortgage, credit card, or used car loan

credit card

How can you help prevent becoming a victim of identity theft.

credit score, check your bank records daily, shred personal documents before you discard

a type of bank owned by its members

credit union

Which payment type can help you stick to a budget?

debit card

When you take a paycheck to the bank to deposit money you must

endorse it

Why might someone change the MICR number on a check

extend the time for the clearing process

What organization is responsible for monitoring banks and setting interest rates

federal reserve

Term used to describe the time it takes for a check to clear

float

If someone posted a fake job posting with the purpose of getting your personal information, what type of fraud are they most likely committing.

identity theft

Type of fraud committed by someone going through your mail giving them access to your personal info

identity theft

Has phishing been increasing or decreasing

increasing

The type of securities fraud that entails gaining inside information to either dump or purchase securities.

insider trading

What is a W-4 form?

it is used by your employer to withhold the proper amount of federal income tax from your paycheck.

Whats a check stub

it shows your gross income, hours worked, withholdings, and net pay for particular pay period

This type of scam is committed if you get an email claiming you have won a sum of money, all you have to do is pay the taxes, stamp duty, and insurance.

lottery scheme

Instead of mailing checks each month to his electric and gas companies, Keon decides to use the internet to make payments you can use

online bill pay

A check that has not been cleared are considered

outstanding

A person who engages in check kiting with no intention of ever depositing "real" money

paper hanger

a person a check is written to in known as the

payee

The most liquid bank account is a

personal checking account

The term used to describe the practice of searching for someone's personal information in hopes of using it for identity theft is?

phishing

Using a fake website to obtain someone's personal info is an example of what practice

phishing

The form of securities fraud that entails pushing up the price of a stock with false info then selling off your shares at a profit.

pump and dump

What's the best type of endorsement for wanting to mail a paycheck to a bank for deposit

restricted

Which investment has the lowest risk

savings account

Insider trading is an example of

securities fraud

A term referring to a category of investment

security

The best way to prevent someone from getting your personal info from your garbage is to

shred all personal info

Signing a check over to a friend using a ___________ endorsement

special

usually once a month you can expect to receive this from your bank detailing all of your account activity for the month

statement

The type of investment that is partial ownership of a company. You buy shares of a company

stocks

Which investment has the highest rate out of mutual funds, stocks, and savings bonds

stocks

a check is considered clear when

the money is taken from your account it's considered

A check with a special endorsement is also known as a

third party check

Why would a company issue stock

to raise money that can be used to grow company

When on vacation the best check to get from a cashier is a

traveler's check

One late payment can lower your credit score

true

The Fico score is the most commonly used credit score in the US

true

What is check bouncing, overdraw, and overdraft

when somebody accidentally withdraws more from their checking account than what they currently have in their balance

sending large amounts of money from one account to another via EFT is considered a

wire transfer

Can a missing payment increase your credit card's APR

yes

Whenever you make a transaction with your checking account you need to record the transaction in

your cash flow or check register