FAm251Final

High-balling is a sales tactic in which a ___ offers a ___ that is much ___ than the vehicle traded is worth. Dealer, trade-in allowance, lower Dealer, trade-in allowance, higher Customer, lump sum, higher Customer, lump sum, lower

Dealer, trade-in allowance, higher

_______________________ is not a sign of overindebtedness

Debt-consolidation to get rid of high interest debt in exchange of lower interest debt

True or False: HMO stands for Health Medicare Organization

False (Health Maintenance Organization)

____ means ____ a product while the ownership remains with the ____. Leasing, renting, lease grantor Leasing, borrowing, original owner Lessee, a consumer of, lessor Lessor, the owner of, lessee

Leasing, renting, lease grantor

Person who receives life insurance proceeds, as per the policy, is called___ Policy holder Beneficiary Cosigner Supervisor

Beneficiary

Employee ____ are forms of remunerations provided by employers to employees that result in the employee not having to ____. Benefits, pay out of pocket expenses Pay slips, pay out of pocked expenses Benefit, pay taxes Cuts, pay taxes

Benefits, pay out of pocket expenses

Use Positive "I" Statement is one of the ideas that will help discuss about money with more confidence. "I" Statements useful to communicate 3 messages. From the following list identify a message that is not communicated by a Positive "I" Statements: Behavior Blame Feelings Reason

Blame

The escrow account is used to accumulate funds for: The down payment Homeowner's insurance premiums Real estate property taxes Both homeowner's insurance premiums and real estate property taxes

Both homeowner's insurance premiums and real estate property taxes

Homeowner's insurance includes: Property coverage Liability coverage Life insurance coverage Both property coverage and liability coverage

Both property coverage and liability coverage

____ is a broad measure of changes in the prices of all goods and ____ purchased for ____ by urban households. Services, consumption, CPI CPI, services, consumption CPI, events, resale Resale, events CPI

CPI, services, consumption

___is when the home is financially and legally transferred to the new owner. Escrow Closing Home poor Appraisal

Closing

Interest earned on interest is: Future interest Inflation Simple Interest Compound Interest

Compound Interest

____ specify that certain conditions must be satisfied before a contract is ____. Contingency clauses, binding Purchase contract, binding Contingency clauses, drawn Purchase contract, drawn

Contingency clauses, binding

Which of the following requires you to pay a certain dollar amount each time you have a specific covered expenses item? Item limits Copayment Deductible Premium

Copayment

A letter of introduction sent to a prospective employer to express your interest in obtaining an interview is a(n): Waste of time Cover letter Application Resume

Cover Letter

____ is a statistical measure used to rate applicants based on various factors deemed relevant to ____ and the likelihood of ____. Credit report, credit, overpayment Credit report, installments, underpayment Creditworthiness, credit score, repayment Credit score, creditworthiness, repayment

Credit score, creditworthiness, repayment

Which financial institution is a non-for-profit organization: Credit union Commercial banks Community banks Savings and Loan associations

Credit unions

In general it is recommended that we need to buy term life insurance rather than whole life insurance for the purpose of protecting from "die to soon" risk.

True

True or False: A money market account is any of a variety of interest-earning accounts that pays slightly higher interest rates compared with regular savings accounts and can be used much like a checking account.

True

True or False: Credit is an arrangement in which goods, services, or money is received in exchange for a promise to repay at a future date.

True

True or False: During the comparison-shopping phase, you narrow the choices so you can begin negotiating for the best deal.

True

True or False: Foreclosure is the process in which the lender sues the borrower to prove default and asks the court to order the sale of the property to pay the debt.

True

True or False: Long-term goals are financial targets or ends that an individual or family wants to achieve more than 5 years in the future.

True

True or False: Needs-based approach is a superior method of calculating the amount of insurance needed that considers all of the factors that might potentially affect the level of need.

True

True or False: Preshopping research is gathering information before actually beginning to interact with sellers to avoid impulse purchase (an unplanned decision)

True

True or False: The interest rate risk is the risk that an investment's value will change due to change in the absolute level of interest rate

True

True or False: The interview is the single most important part of your search for employment

True

True or False: The standard deduction is $12,200 for a single person

True

True or False: When debts were accumulated in both names, a divorce decree has no legal effect on who technically owes which debts. Creditors can legally collect from either of the divorcing parties.

True

True or False: You should assess the risks of potential investments before investing.

True

True or false: A tax credit can be used to reduce your tax liability on a dollar-for-dollar basis.

True

Drawbacks of HMO include: Limited choice of physicians No coverage for preventive treatments Limited availability through group plans Higher deductibles and copayments compared to other plans.

Limited choice of physicians

Dividing monetary assets by monthly expenses provides one's: Liquidity ration Debt-to-service-to-income ration Assets-to-debt ratio Solvency ratio

Liquidity ratio

A major advantage of variable-rate mortgage is (are): Longer repayment terms Stable monthly payments Lower initial APR All of these

Lower initial APR

The extra satisfaction derived from having one more incremental unit of a good or service obtained is called its: Trade-off Marginal Cost Marginal Utility Utility

Marginal Utility

The tax rate applied to a taxpayer's last dollar of income is called the: Average tax rate Composite tax rate Marginal tax rate Adjusted tax rate

Marginal tax rate

___ is a government health care program for low-income people funded jointly by the federal and state governments and ___ is a government's health care plan for the elderly. Medicare, Medicaid Medicaid, Medicare HMO, Medicare HMO, Medicaid

Medicaid, Medicare

The lowest payment dollar amount required by a credit card company in a given month is the: Interest for the month Periodic payment Minimum payment Finance charge

Minimum payment

____ account requires customers to keep a minimum amount for a specified time period to avoid fees and ____ account the average daily balance needs to stay above a certain level during a specified time: Average-balance, minimum-balance Minimum-balance, average-balance Checking, savings Savings, checking

Minimum-balance, average-balance

A bank account would be categorized as a(n): Net worth asset Investment asset Monetary asset Tangible asset

Monetary asset

Professional ____ is the process of making and using ____ with individuals, groups, and other firms to ___ career information. Benefits, communication, acquire Communication, benefits, acquire Exchange, networks, contact Networking, contacts, exchange

Networking, contacts, exchange

If you are likely to pay your balance in full each month, select a credit card with: No annual fee A low interest rate Credit life insurance Credit disability insurance

No annual fee

Shares of ownership in a corporation are ____ Portfolio Ownership Title Stocks

Stocks

___ is an illegal way of cheating government out of taxes whereas ___ is a legal way of reducing tax liability: Tax evasion, tax avoidance Tax avoidance, tax evasion Tax fraud, tax deduction Tax fraud, tax return

Tax evasion, tax avoidance

Income exempt from current taxation but for which taxes will likely be paid at a later date is said to be: Tax-exempt Tax-free Tax-sheltered After-tax income

Tax-sheltered

Which of the following is not a reason for investing? To achieve financial goals To meet retirement needs To maximize enjoyment of life To gain wealth in a risk-free way

To gain wealth in a risk-free way

The borrower will not receive the full amount of a loan when the ___ method is used to calculate interest: add-on simple-interest amortization discount

discount

With a cash-value life insurance policy, the value of the insurance_____ over time, and the value of the savings______ over time. Increases, increases Increases, decreases Decreases, decreases Decreases, increases

pg 368

If your credit card has an APR of 12% and you have an outstanding average daily balance of $2,000, your interest for the month is: $24 $10 $20 $240

$20

Jane has monetary assets of $5360, tangible assets of $135,700, and investment assets of $57,800. Her short-term liabilities are $24,200 and long-term liabilities are $94,000. What is her net worth? $111,500 $80,660 $198,860 $77,900

$80,660

In a Roth IRA, what percentage of tax penalty is charged on withdrawals made at age 59.5? 0% Variable depending on your income level 10% 3%

0%

People who start saving and investing for retirement during their twenties should aim to reserve___ percent of their pretax income every year. 9-11 12-15 15-18 19-22

12-15

As a result of the health care reform Patient Protection and Affordable Health Care Act, a child can stay on a parent's health care plan until age: 18 21 or graduating from college 26 or graduating from college 26 regardless of college student status

26 regardless of college student status

___ is a defined-contribution plan designed for ___ of ___ corporations. Roth IRA, employees, private IRA, employees, private 401K plan, employees, private 401K plan, employees, public

401K plan, employees, public

Employees' FICA tax rate contribution is ___ and Medicare tax contribution is ___. 6.2%, 1.45% 1.45%, 6.2% 12.4%, 2.90% 2.90%, 12.4%

6.2%, 1.45%

At what age can you become eligible for Medicare coverage based on the current rule? 59 60 62 65

65

___ is/are used by insurance companies to perform a certain number of such activities as a criterion for deciding when the insured becomes eligible for ____. Activities of daily living, around the clock nursing Activities of daily living, long-term care benefits The level of impairment, long-term care benefits The level of impairment, around the clock nursing

Activities of daily living, long-term care benefits

Which factor(s) influence the mortgage payment? Amount borrowed Interest rate Length of loan All of the above

All of the above

There are 3 methods to set your own debt limit. What is the method, in which your monthly debt repayments are divided by your gross monthly income and multiplied by 100? Debt-to-income method Debt payments-to-disposable income method Compare debt-to-equity Continuous-debt method

Debt-to-income method

Money left over after the necessities are paid for is: Net surplus Discretionary expenses Savings Disposable income

Discretionary expenses

Income from salaries, wages, fringe benefits, and sole proprietorship is called: Transfer payments Gross income Taxable income Earned income

Earned income

______ refers to any _____ such as the inflation rate, ____, or the unemployment rate that suggests how well the economy is doing now and how well it might be doing in the future. Economic indicator, economic statistic, GDP Economic statistic, GDP, economic indicator Countercyclic, economic statistic, GDP GDP, countercyclic, economic statistic

Economic indicator, economic statistic, GDP

True or False: It takes minimum of five years to qualify for Social Security Retirement Benefits.

False

True or False: Life insurance is the best way to address the "living-too-long" problem

False

True or False: Needs and wants should both be considered as necessities.

False

True or False: Peril is uncertainty about whether a financial loss will occur and how large the loss will be.

False

True or False: Risk is any event that can cause a financial loss.

False

True or False: Saving is an optimal way to put your money to work so that it makes you even more money.

False

True or False: Social Security is likely to provide the majority of your retirement income.

False

True or False: Unsecured loan is a loan that is backed by collateral or a cosigner.

False

True or False: Values have little impact on decisions made about life

False

"_____ is the dollar amount lenders charge for borrowing money" Finance Charge Annual percentage rate Interest The principal

Finance Charge

The feeling that your financial resources will be enough to fulfill any needs you have as well as most of your wants is called: Comfort Wealth Financial Security Standard of living

Financial Security

What is not a good use of credit? For emergencies Making reservations Going on a shopping spree To obtain education

Going on a shopping spree

Which of the following does not apply to monetary assets? Very safe High liquidity High return Low return

High return

The tax credit(s) for qualifying higher education expenses is: Hope scholarship credit Earned income credit Lifetime learning credit Hope scholarship and lifetime learning credit

Hope scholarship and lifetime learning credit

A cash-flow statement includes three sections: ____, ____, and ____ Cash, assets, liabilities Income, assets, liabilities Surplus, deficit, expenses Income, expenses, surplus/deficit

Income, expenses, surplus/deficit

Umbrella liability insurance covers costs that are: Over and above the limits covered by your other insurance liability policies Less than what your normal insurance would cover Detailed in your other insurance agreements All of the above

Over and above the limits covered by your other insurance liability policies

Writing a check for more than what is available in your account can result in a(n) ________ fee: Overdraft Late Overdue Penalty

Overdraft

____ describe the ___ dollar amounts that will be paid under the policy. Policy limits, minimum Policy limits, maximum Coinsurance, minimum Coinsurance, maximum

Policy limits, maximum

A collection of securities and other investments is called a: Salary reduction plan Diversification Portfolio Principal

Portfolio

The process of selecting groups of investments with dissimilar risk/return characteristics is called: Portfolio diversification Asset averaging Contrarianism Dollar-cost averaging

Portfolio diversification

What is not a possible format for your resume? Chronological format Skills format Professional format Functional format

Professional Format

____ protects individuals and organizations that provide ____ services when they are held liable for their client's ___ Professional liability insurance, professional, losses Professional integrity insurance, professional, injuries Homeowner's insurance, construction, losses Renter's insurance, rental property, property

Professional liability insurance, professional, losses

____ is a tax that ____ increases as a taxpayer's _____ increases. Progressive tax, progressively, taxable income Progressive tax, progressively, marginal tax Regressive tax, regressively, taxable income Regressive tax, regressively, marginal tax

Progressive tax, progressively, taxable income

____could not be covered under your bodily injury and property damage liability coverage. Damage to property of others Bodily injuries to passengers in your car Property damage to your car Bodily injuries of pedestrians hit by your car

Property damage to your car

Which of the following is a characteristic of term life insurance? Provides no investment features Costs more than other types of life insurance Has premiums that decrease over one's lifetime Pays benefits to the insured when the insured reaches age 65

Provides no investment features

Which is not a step in the planned buying process? Prioritizing wants Preshopping research Purchasing on credit Comparison shopping

Purchasing on credit

An automobile buyer can call the National Highway Traffic Safety Administration "auto hotline" or visit its website www.safecar.gov to get information on government safety test results, and _____ New car prices Used car prices Recalls Financing information

Recalls

A decline in business activity or downturn in the economy is called a(n) Recession Depression Inflation Deflation

Recession

A summary record of your education, training, experience and other qualifications is your: Interest inventory Cover letter Lifestyle inventory Resume

Resume

_____ is a variable ____ that places funds in savings to cover for ____. Cash-flow statement, budgeting tool, monthly expenses Budgeting tool, cash-flow statement, expenses Revolving savings fund, budgeting tool, emergencies Budgeting tool, revolving savings fund, emergencies

Revolving savings fund, budgeting tool, emergencies

When no employer-sponsored retirement plan is offered, you should contribute to a(n)__ 401(k) Roth IRA Traditional IRA Roth IRA and/or traditional IRA

Roth IRA and/or traditional IRA

The most commonly used method to calculate a prepayment penalty on installment loans is the: Deficiency balance Rule of 72 Account exception fee Rule of 78

Rule of 78

Loan paid in lump sum at a later date: Installment credit Close-end credit Single Payment loan Revolving credit

Single Payment loan

Which of the following is not characteristic of a cash-value life insurance policy? The annual premiums usually remain constant The beneficiary receives the sum of the face value and the cash value The policyholder can cancel the policy and receive the cash value The policyholder can borrow from the cash value

The beneficiary receives the sum of the face value and the cash value

A legal right of the ownership interest to a piece of real property is called a(n) Deed Certificate of transfer Abstract Title

Title