Personal finance end test
Fair Credit Reporting Act
Ensures that the information in consumer reporting files is fair, private and accurate.
Credit Card Act of 2009
Establishes fair credit card practices and requires credit card companies to report certain information about credit card rates and fees to the consumer.
Which are the 3 retirement plan options?
IRA savings 401K bonds mutual funds 403B
How are balloon payment mortgages different from traditional mortgages? Check all that apply.
The term is shorter than for traditional mortgages. A large payment is due at the end of the term.
Which is NOT true about stocks?
They are shares of ownership in a company. The value grows as the company grows. THEY ARE GUARANTEED BY THE US TREASURY some companies pay dividends to stockholders
Why are mutual funds a wise investment?
They reduce an investor's risk by diversifying the investments
A mortgage loan is a loan you would take out to buy a _________________.
house
(parts of credit card) fees
include annual, late and balance transfer
The cost of a decision is also known as a(n)
opportunity cost
Because many business owners fail at their first attempts and later form successful businesses, one should assume that
they learned from their mistakes.
What is one purpose of writing a business plan before entering the market?
to differentiate the new company from the competition
Which is a reason that a county may issue a bond?
to repair a bridge
Sales tax is calculated
using a percentage of the price of an item.
_______ of all new businesses fail within the first 5 years.
50%
What is the lowest credit score possible?
500 400 300 (correct) 200
Which of the following credit scores would qualify an applicant for the best loan terms and interest rates?
650 810 (Correct) 700 925
Which is not a situation where one's credit score may be used?
A SOFTBALL COACH DETERMINING IF A PLAYER WILL HELP THE TEAM TO WIN. A car dealer determining the interest rate for a car loan. An employer determining the if the applicant is responsible. A landlord determining if a potential tenant will pay regularly
(credit bureau reports) Soft Inquiry
Background check - does not affect credit score
When a new product is introduced by a business, other companies may also experience growth if the new product is successful. Which is NOT an example of a company that could benefit from another company's new product?
Businesses that provide materials, supplies and resources to create the new product. BUSINESSES ACROSS TOWN FROM THE NEW BUSINESS Business that provide services that relate to the new product. Businesses that create companion products for the new product.
Which item does not contain personal information criminals can use?
CASH RECEIPT bank statement paystub credit card bill
What are the 4 main types of personal deposit accounts available at banks?
CHECKING credit cards SAVINGS debit cards MONEY MARKET CD'S
(credit bureau reports) Hard Inquiry
Check credit history to make a lending decision - affects credit score
Which actions will lower your credit score? Check all that apply.
DON"T PAY BILL FOR 2 MONTHS pay the minimum payment on credit card. PAY CAR LOAN 1 DAY LATE Only charge a small amount on credit card compared to credit limit IGNORE A DOCTOR BILL
If a representative from your bank or credit card company emails you for information, what should you do?
Do not respond to the email. Initiate contact with the bank or credit card company via phone or their official website.
Which actions will raise your credit score? Check all that apply.
Don't pay last months rent on a lease HAVE TWO CREDIT CARDS< ONE CAR LOAN AND A MORTGAGE IN GOOD STANDING PAY DOWN MORE THAN HALF OF STUDENT LOANS CHARGE $500 ON A CREDIT CARD WITH A $5,000 LIMIT. Forget to pay student loan because statement was lost in mail
Jerome likes to take stuff apart and then rebuild it. He is also good at math but is rather shy. Which career choices might he enjoy? Check all that apply.
Engineer: design, plan, or manage a system such as machines, computers, or roads., Aircraft inspector: inspect, plan, and oversee repairs on aircraft; may also need to design parts as repair methods that meet standards., Factory reproduction manager: check that products meet specifications.
Which results are more likely for someone without personal finance skills? Check all that apply.
HIGHER TAX RATES LESS PREPARATION FOR EMERGENCIES fewer utility expenses simple long-term investment strategies INCREASED LONG TERM CHALLENGES
Put the following steps to starting an entrepreneurship in the correct order.
Identify an opportunity. Create a business plan. Finance the business. File the necessary paperwork with the local and state governments. Open the business.
The chart shows taxable income. Which explains a difference between income and taxable income?
Income is what a person earns, while taxable income reflects deductions for various expenses.
Which is a long-term consequence of making late payments on your bills?
It will be harder to secure a new loan at a low rate.
Liam is a computer systems analyst and is looking to change to a company that offers more opportunities for advancement. He has job offers from two companies that look promising. Which company is a better choice based on annual income after housing and utility costs?
Job 1 is a better choice because the annual income after housing is $65,800 but that of job 2 is $64,700.
(credit bureau reports) Personal Information
Name, address & Social Security number.
(credit bureau reports) Payment History
On-time and late payments of debt.
Which of the following is the strongest password?
Oo+mspoiyhiySS# password MyDogEddie Feb14MyLove
(credit bureau reports) Accounts in Good Standing
Paid on time and in full.
Fair Debt Collection Practice Act
Protects against abusive and deceptive debt collection practices.
Federal Trade Commission
Protects consumers from unfair or deceptive business practices.
Which financial institutions offer checking and savings accounts? Check all that apply.
RETAIL BANKS CREDIT UNIONS payday lenders ONLINE BANKS
For which IRA requires you to pay taxes when you invest the funds but also allows you to withdraw funds after 5 years for certain uses?
ROTH Traditional
Which is not a way that consumers may learn their identity has been stolen?
Receiving a call from their credit card company or bank about suspicious charges. Receiving a letter from a company saying there has been a data breach. RECEIVING A NEW CREDIT CARD IN THE MAIL TO REPLACE THE ONE THAT EXPIRED Finding new accounts on a credit report that they didn't open
Anastasia makes a good salary but wants to be sure she has good credit so she can buy a condominium when she has saved enough money for a down payment on a mortgage. What is the best thing she can do to improve her creditworthiness?
She should pay down her student loan and credit card debt.
Shona is buying a rug for her room. Store A has the rug for $45 with a 10% discount. Store B has the same rug for $46 and is offering a $10 rebate. The sales tax is 6% on either purchase. If Shona only has $40 to spend, which store will she purchase the rug from, and how much will she have left over?
Shona can afford the rug in store B. She will have $1.84 left over.
How can you prevent thieves from obtaining personal information from your trash?
Shred personal documents before putting them in the trash
Which did Henry Ford NOT do?
Streamlined factory production lines. Mass produced the first affordable cars. Created new standards for higher wages and less working hours. ESTABLISHED CHARITIES DEDICATED TO WORLD HEALTH
All of the following can determine the amount of the down payment that is required for a mortgage loan, except ...
THE SIZE OF THE HOUSE the type of the loan the borrowers credit score loan amount
Which statements are true about bonds? Check all that apply.
THEY ARE LOANS TO COMPANIES They pay dividends THEY ARE DUE ON SPECIFIC DATES AND MUST BE PAID BACK WITH INTEREST They are a type of mutual fund THEY MAY BE GUARANTEED BY THE U.S. TREASURY, CITIES, COUNTRIES or STATE
Which of the following is not a benefit of a fixed rate mortgage?
The interest rate stays the same over the entire term Monthly payments are predictable If interst rates rise on the market a borrower could benefit by keeping a lower rate. IF INTEREST RATES FALL ON THE MARKET, A BORROWER COULD BE STUCK PAYING A HIGHER RATE
Jaina and Tomas are being considered as new tenants in an apartment. The landlord looks at their creditworthiness because he wants to be sure his new tenant pays the rent on time and in full. The table below summarizes the information that was on their applications. Who will the landlord decide to be more creditworthy and why?
Tomas because the ratio of his debt to income is less.
Which of the following affects credit scores the most?
Types of Credit Used Length of Credit History Amounts owed PAYMENT HISTORY New credit
(credit bureau reports) derogatory or negative information
Unpaid accounts and late payments.
Which is not one of the four stock exchanges
nasdaq CITIBANK nyse s&p 500
_____________ are items such as utilities, rent and food - items that one can't do without.
needs
(parts of check) routing number
number that identifies the bank where the account is from
Which of the following could be required with a mortgage loan?
origination fee
Which is not one of the three major payment types?
paper SAVINGS plastic electronic
An entrepreneur would most likely be a
person who works well alone.
Which of the following types of paper payment could cause you unexpected fees after the payment is made?
personal check
Which is always a cost when buying insurance?
premium
Which of the following is not considered a banking institution?
retail bank PAYDAY LENDER credit union online bank
A federal payroll tax that supports retired workers is
social security tax
define asset
something that has monetary value
An entrepreneur is someone who
starts and runs a business.
What are steps to take to manage existing debt?
stop increasing debt. pay at least minimum payment on time. use non profit debt counseling service. ALL OF THE ABOVE
(bank workers) Branch Manager
supervises personnel at the site
Which of the following does not affect a monthly mortgage payment?
taxes
(parts of check) signature
the account holder's agreement that "seals the contract"
define risk
the chance of loss
define differentiate
the difference or differences between two or more things
(parts of check) amount
the dollar amount (both numerical and in words) to pay the holder
(parts of credit card) credit limit
the maximum amount you can charge on the account
what is required balance
the minimum balance you must maintain to avoid fees
(parts of check) account number
the number that identifies the account from which the check is written
(parts of check) Check Number
the order in which a check falls in the account holder's register
(parts of check) payee
the person to whom the check is made payable
A balloon mortgage requires a large payment after a few years of payments. (T F)
true
Compounding returns enable you to earn more money by re-investing your earnings. (TF)
true
Credit cards are safer to use than debit cards when you are traveling because they offer better fraud protection. (T F)
true
Debit cards are also sometimes called check cards. (T F)
true
You should never use public Wi-Fi to do online shopping. (T F)
true
Which is not a type of mortgage loan?
fixed rate adjustable rate FLEXIBLE RATE balloon
(parts of credit card) balance transfer
moving funds from one credit card account to another
This graph compares the total cost of attending educational institutions in Texas. The graph demonstrates that the cost at private and public
four-year universities greatly varies.
Successfully starting and running a business requires drive, talent, and clear vision of a long-range ________.
goal
(bank workers) Customer Service Representative
helps customers with any questions
(bank workers) Bank Teller
helps with account transactions
(parts of credit card) APR
interest rate
How do criminals obtain your personal information that they use to commit identity theft or fraud?
internet, phone, mail, trash ALL OF THE OBOVE
(parts of credit card) rewards
may be cash or points
When you are investing money, you are always guaranteed to earn interest/dividends and grow your investment. (T F)
false
(credit bureau reports) Public Records
Court judgments and bankruptcy filings.
Your Social Security number does not hold much importance so you can give it to anyone who asks. (T F)
false
Which of the following is a form of electronic payment?
apple pay from an iphone
Enzo's balance sheet for the month of July is shown. Which expression finds Enzo's net worth?
assets - liabilites
(parts of check) date
complete date the check was written
define innovate
create a new product or way of doing things
Which would be most helpful when considering a large expenditure that might require repeating payments?
creating a budget to consider future income and spending
After he bought a new car, Nelson purchased car insurance. He must pay $75 each month for the plan.Later that month, Nelson caused a car accident when he lost control of his vehicle. He was required to pay the first $500 of his repair costs, and then the insurance company covered the rest. What is the $500 payment Nelson must make?
deductible
(parts of check) memo
description of the check's purpose
As a young investor, there is no advantage to starting to save for retirement now. (T F)
false
Because the minimum payment due on a credit card is usually 75% of the balance, you can pay off a credit card balance in a short period of time by only making the minimum payments. (T F)
false
If someone wants to avoid paying interest charges, she should use her credit card rather than her debit card. (T F)
false
Payday lenders are a good resource when you need a loan because they charge low rates and fees. (T F)
false
The principal of a mortgage loan is the amount of interest paid. (T F)
false
Your cell phone is of no use to criminals. (T F)
false