final exam

T-bills are offered in what monetary increment?

$1000

Colleen has kept $10,000 in an account all year. Her bank has paid her $1,000 in dividends on this account. What is her rate of return on this investment?

10%

You are trying to determine the unit price of a bag of potato chips. The bag costs $4 for 16 ounces of chips. What is the accurate unit price?

25 cents per ounce

Angel and Alessia calculate their assets to be valued at $150,000. They calculate their liabilities to be $125,000. What is their net worth?

25000

Cisco is a 16-year-old with a part-time job. He makes $100 per week and spends $50 on car insurance each week. This is his only income and his only expense. Which type of budget would be easiest for Cisco?

a mental budget

What can a credit freeze accomplish that a fraud alert cannot?

A credit freeze can prevent anyone from viewing your credit report.

Lena thinks someone has stolen her identity. She isn't sure if she should place a fraud alert on her credit report. She doesn't understand anything about fraud alerts. What true statement could you teach Lena to help her make a more informed decision?

A fraud alert can stop anyone from opening any new accounts in your name.

What is the name for an assessment of what you own and what you owe?

a personal balance sheet

Tina plans to buy her first car, but she has no credit history. The bank will give her a loan if she has a co-signer. How can Tina MOST accurately and efficiently meet their request?

Ask her mother to legally take responsibility for the debt.

Devon would like to invest in bonds but he is only familiar with investing in stocks. What is the biggest difference between the two?

Bonds have fixed maturity dates.

What do you call a person who calls your bank or other financial institution pretending to be you or someone else who is authorized on the account?

a pretexter

You have closed an account due to fraudulent activity. What else should you do to BEST protect yourself?

Change all of your passwords and PINs.

Erica recently bought a homeowner's policy that will cover the loss of jewelry, but only up to $20,000. What is this known as?

an exclusion

Devyn is deciding whether to apply for a loan at a credit union or at a bank. What would be MOST helpful for Devyn to know about credit unions to help inform his choice?

Credit unions tend to lend exclusively to their members

Dmitry is someone who invests by flipping houses. How is this BEST demonstrated?

Dmitry buys houses and then fixes them up and sells them.

You are teaching a lesson on how to stay informed about your finances and protect yourself from identity theft. What is the BEST piece of advice you would give?

Examine your financial accounts once a month for fraudulent activity.

Direct stock plans are only offered by brokerage firms.

False

When creating their will, Steph and Freida had a difficult time deciding who would carry out its instructions. What person were they struggling to designate?

an executor

Yusef's financial advisor tells him that he has made a great budget. Why was he MOST likely successful with his budget?

He chose realistic amounts for each category.

Ahmad recently was a victim of identity theft when someone opened multiple accounts in his name and bought numerous expensive items. What is one effect that he is MOST likely to have experienced due to this fraudulent act?

He lost out on job opportunities.

What is one type of closed-end credit?

an installment cash credit

Sabrina bought a new washing machine. She put $50 down and pays $50 per month for the next 10 months to be able to make the purchase. Which type of credit did she use?

an installment sales credit

What is TRUE about estate planning?

It helps ensure your possessions are distributed appropriately.

What is true about open-end credit?

It is not typically used for a single purchase but for many purchases over a period of time.

River bought a new washing machine that came with a warranty. How will this warranty be MOST helpful for River?

It will allow free repairs to the machine if needed.

Lida couldn't wait to tell her friend that she now owns a piece of Starbucks. Her friend asked how that could be possible? How could Lida BEST answer this question?

Lida could explain that she purchased stock in the company.

Eric needs help with his credit problems. Which organization is considered a good, reputable source of information on how to solve credit problems?

National Foundation for Consumer Credit (US)

You are creating an advertisement for a new product that you invented. What is one thing you will be sure to do when creating your advertisement to help it be successful?

Mention what the product is and why someone would want to buy it.

Tyson's financial planner asks him to raise the amount of his liquid assets. How can he BEST accomplish this?

Put money in his savings account.

Ira budgeted $1000 for his expenses this month, but he spent $1500. In order to be fiscally responsible, what does Ira need to do now?

Reexamine his budget; he had a $500 deficit this month.

Solo wants to store her tax returns, her will, and her budget in a location where she can quickly retrieve these records for review and revision. What is the MOST logical thing for Solo to do with these records?

Save them to a computer file.

Abigail buys cookies at a local gas station for $2.00 per pack. At the grocery store, she can get 10 packs for $20. Online, they will ship 15 packs to her house for $30. What is the BEST financial advice you can give Abigail about purchasing these cookies?

She can buy them at any of these merchants; the cost is the same.

Catalina has been offered a membership at a local warehouse store. What is the BEST reason for Catalina to join this warehouse club?

She can get larger discounts on things she buys in bulk.

Riviera is a 20-year-old who has a very low credit score. She asks her friend Li for advice on how she can increase her credit score. What is the BEST advice Li should give Riviera?

She should pay her bills on time.

Prashanthi doesn't keep good financial records. How will this likely affect her investment income?

She will not know if she needs to sell a stock or buy more stock.

What is the BEST way to protect your personal information?

Store your personal information in a safe place where you can access it if needed.

Harriet died before she had a chance to prepare a will. What will MOST likely happen to her estate?

The government may step in to handle the distribution of her possessions.

What is MOST likely to happen once someone purchases stock?

The stockholder is guaranteed to receive dividends quarterly from the company.

Tracy has heard about government bonds before, but she isn't sure what they are. She is very conservative by nature and is really hesitant about trying new things. What can you tell her about government bonds that might actually convince her to invest?

They are relatively risk-free.

Melanie is having a lot of financial problems. She is drowning in debt and needs help. She is looking for an organization to help her. What is a sign of a reputable organization?

They disclose your rights clearly and share with you free services that may be helpful to you.

Carlos and Keisha have a monthly income of $25,000. They have monthly expenditures that total $30,000. What is TRUE about their cash flow?

They have a $5,000 deficit.

After Joe and Stephanie placed an offer on a house, the realtor came back to tell them they had Consensus ad idem. What does this MOST likely mean for Joe and Stephanie?

They have an accepted offer.

Smart cards are also known as gift cards.

false

Daven, age 20, visits his 80-year-old grandma, Vivian. Daven warns Vivian that he worries she could fall victim to "phishing." Vivian has no idea what this means. How can Daven BEST explain this to Vivian?

This is when someone calls or emails you and asks you for personal information that can help them steal your identity.

It is possible to insure a pet, a body part, and jewelry.

True

Someone who lives near a river or in an area prone to flooding may have a different classification on the risk of home water damage than someone who lives in a drier region.

True

Speculative investments are high-risk investments with the possibility of high returns in a short period of time.

True

The advantage of using a safe deposit box at a financial institution is that it is protected by the financial institution's security system, which usually provides greater protection than the security systems of a private home.

True

The interest rates for treasury notes are greater than for T-bills because of the longer maturity dates.

True

Which of the main components of money management provides the basis of money management?

financial records

Sofia wants to purchase new patio furniture for her backyard. She doesn't have a lot of extra money to spend on the furniture. What is the BEST financial advice for Sofia regarding this purchase?

Wait until there is a sale and then make the purchase.

Sofia bought a couch that required a $60 down payment and $60 per month for the next eight months. Which type of liability does this describe?

a current liability

José wants to have money available for any future purchase he desires. What is his BEST choice to assure that he has open-ended credit?

a bank line of credit

Trevor is trying to apply for consumer credit. What purchase is he MOST likely planning to make?

car

Which technique advertises all of the good things about a product while ignoring the negative aspects of the product?

card stacking

Tammy has had a lot of success investing in preferred stocks. She wants to invest in other assets that are very similar to preferred stocks. What options would BEST match her investment preferences?

common stocks and corporate bonds

What is the term for an arrangement between you and another party where you receive goods or services now and arrange to pay later?

credit

If Damien loses his job due to injury, he worries that his family won't be able to survive without his income. He decides to purchase disability insurance that will provide money for him and his family if he should ever become physically unable to work. By purchasing this type of insurance, from which type of risk is Damien trying to protect himself?

personal risk

When buying groceries, Suki swipes a card to electronically subtract money from her checking account to pay. She is essentially using cash, as the amount is immediately removed from her account. Which type of card is Suki using?

debit card

Tatiana works for a company that allows her to deduct money from her paycheck to buy her own company's stock. What is this called?

direct stock plan

Latoya has a lot of doctor's visits coming up, and her children all need vaccinations for the upcoming school year. Which type of insurance would be MOST helpful to her in this situation?

health insurance

Cali wants to work on improving her money management skills. To start, she needs to gather financial records. What type of financial record would MOST help her begin this process?

her yearly tax forms

Rinaldo's dad left a handwritten will that he had prepared by himself in his own handwriting. He left everything to his dog Rusty. Which type of will is this?

holographic will

Malik's father recently died. His dad had an insurance policy, so Malik received $20,000 from this policy. Which type of insurance does this MOST likely represent?

life insurance

What is the legal document detailing the type of medical care a person wishes to receive in the event they become incapacitated due to a physical or mental illness?

living will

When Christopher dies, he wants to leave one half of his adjusted gross estate to his spouse and the other half of the estate to the American Cancer Society. What type of will does he need to create?

marital share will

Alicia accidentally hit the bumper of her car by driving into a tree. She has a car insurance policy with $1000 deductible. The total damage to the car is $500. How much will the car insurance company pay in this scenario?

nothing

Felix was recently arrested for identity theft. He was going through his neighbor's trash to get bank documents, calling the bank pretending to be his neighbor to get more information, and then using his new information to steal from various accounts. What is the name that BEST describes the tactic Felix was using?

pretexting

Telma bought a house for $100,000. She plans to invest $50,000 in the home and then sell it for $200,000. Which type of investment this considered?

real estate

Nelson's motto is "Go big, or go home." Which type of investment would Nelson prefer?

speculative investment

Which type of life insurance, which has no value to the insurance above the death benefits, pays a specific amount of money to beneficiaries if the insured individual dies during the specific period of coverage?

term life insurance

Rebecca has started to use a secured credit card. What is Rebecca MOST likely attempting to do?

to overcome a bad credit history

What is NOT one of the main components of money management?

tracking interest rates

George wants to buy a government bond that will mature in four years. Which type of bond will BEST meet his needs?

treasury notes

Credit tends to cost individuals more than paying in cash.

true