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