Personal Finance Sem 1

Individuals can deduct expenses only in excess of 7.5% of adjusted gross income for

medical and dental expenses

Kylie went to a post office to obtain a

money order

When Imogene brought a necklace to a ______, she received a loan based on its value

pawnshop

Wanda bought a certificate of deposit and automatically received a free bike. She purchased a

promotional CD

The tax that is a major source of revenue for local government is called a(n)

real estate tax

Income that is never subject to tax is called

tax-exempt income

All of the following are consumer credit protection laws except

the Credit Lawsuit Act

Who is responsible for a loan repayment

the cosigner

Opportunity cost refers to

the trade-off of a decision

If a $10,000 investment earns a 4% annual return, what should its value be after one year

$10,400

Shane borrowed $225. He paid $20 interest and a service charge of $30. What is his finance charge?

$23

In 2011, taxable income was reduced by ________ for each exemption claimed

$3,700

Rebecca Wilson budgeted $1,200 for housing and utilities in July. She actually spent $1,160. What is her budget variance?

$40 surplus

A family with $100,000 in assets and $60,000 of liabilities would have a net worth of

$40,000

Evan had three accounts as listed below. In 2014, how much was his total insurance coverage by the FDIC? Bank A: $150,000 Bank B: $50,000 Bank C: $350,000

$450,000

Susan Smith has a goal of "saving $25 per month for a TV". Considering the SMART approach, Susan's goal lacks

A time frame

If you think your identity has been stolen, which of the following actions does the Federal Trade Commission recommend you take immediately?

File a police report

Individuals can file their federal taxes using all of the following except

fax

Liquid assets refer to

items of value that are easily converted to cash

A credit card is a type of

loan/borrowing

Brenda last her debit card. When she realized it was gone, her account had $173 in unauthorized charges. She notified her financial institution within two days. How much is she potentially liable for?

$50

Janet is completing her federal income taxes for the year and has identified the amounts listed here. How much can she rightfully deduct? AGI: $42,000 Medical and dental expenses: $1,100 State income taxes: $1,000 Mortgage interest: $7,000 Charitable contributions: $1,250

$7,375

the main purposes of personal financial statement are to:

-Report you current financial position -Measure your progress toward financial goals -Maintain information about your financial activities -Provide data for preparing tax forms or applying for credit

Information about a personal banktrupcy may be reported in your credit file for

10 years

Which of the following a NOT a valid form for filing federal income taxes?

1040Z

Experts suggest that the debt payments-to-income ratio should be a maximum of

20%

FICO scores generally range from

350-850

If inflation is expected to be 8 percent, how long will it take for prices to double

9 years

Which of the following primarily provides loans for home purchases?

A mortgage company

Which of the following will likely provide the most expensive loans

A payday loan company

The major function of personal financial planning is to

Achieve personal economic satisfaction

Will wants to open an account with $500 that will allow him easy access to his funds (by checks, ATMs, or debit card usage) from many locations. He also wants to earn at least a low interest rate and have federal deposit insurance. What kind of account should he open?

An interst earning checking account

Which of the following can result from a failure to repay a loan?

Bankruptcy, loss of income, loss of a good reputation, damage to family relationships

Chloe signed the back of her check with just her signature. She used a(n)

Blank endorsement

A loan officer is examining whether or not to offer you a loan today. Specifically, she is examining your income and debts. Which of the five Cs is the loan officer reviewing?

Capacity

Which of the following ratios shows the relationship between debt and net worth?

Debt ratio

Which of the following is NOT a credit bureau

FICO

Nancy is married to Jerry and needs to complete her tax form. They both earn about the same amount of money each year. What filing status would be best for them?

Married, filing a joint return

a worker's primary goal should be to

Pay his or her fair share of taxes while taking advantage of appropriate tax benefits

Louise got caught in a cash flow trap and desperately needed money quickly. Unfortunately, she didn't shop around and she went to a _______. As a result, her annual percentage rate was higher than 780%!

Payday loan company

Which of the following would increase the interest rate for a loan?

Poor credit rating

Many Americans have money problems because of:

Poor planning and weak money management habits

A tax due on the purchase of gasoline is called a(n)

excise tax

Changes in personal, social, and economic factors may require you to

Review and revise your financial plan more frequently

Common payment choices for everyday activities include all of the following except

Short-term loan

If you want to buy a U.S. Savings bond, you may purchase them through

a TreasuryDirect account

a credit card holder who pays off his balances in full each month is known as

a convenience user

Which of the following is an example of open-end credit?

a department store credit card

Which of the following is NOT required when writing a check?

a driver's license number

A drawback of a regular savings account is

a low rate of return

how long should you keep documents relating to investments

as long as you own these items (investments)

Items with monetary value are referred to as

assets

ATM stands for

automatic teller machine

The document that would be most useful to plan spending and saving to achieve financial goals is the

budget

Earning interest on previously earned interest is called

compounding

Money management refers to

day-to-day financial activities

Fees, tips, and bonuses are forms of

earned income

A home file should be used to keep

financial records for current needs

Recent tax credits include all of the following except the

graduate learning tax credit

The loss of a job or encountering an illness results in ______ risk

income

A personal balance sheet reports

income and expenses for a period of time

An advantage of effective personal financial planning is:

increased control of financial affairs

Credit reports can be obtained for all of the following reasons except

inquiry by a neighbor

The periodic charge for the use of credit is

interest

Which of the following is the only online source authorized to provide a free credit report each year at your request?

www.annualcreditreport.com

All of the following are signs of financial trouble except

you pay your credit card bills in full each month

Which of the following is often the first sign of a stolen identity?

you receive bills for a credit card account you never opened