Personal Finance Final

An approach to finding out about job opportunities that consists of contact with friends and family members who might be able to connect to you to a potential employer is called: a. logrolling. b. recruiting. c. connecting. d. networking.

D.

Who generally benefits from a loan transaction? a. the lender only b. the borrower only c. both the borrower and the lender d. neither the borrower nor the lend

C.

Which is most likely to improve a person's chances of getting a job? a. supplying a neat and accurate application b. preparing a resume only if an employer requests one c. classified job advertisements in newspapers d. dressing for an interview in a manner that is provocative

A.

An employee works 40 hours per week at $10 per hour. The deductions per week are $50 in federal income taxes, $20 in state income taxes, and $30 in Social Security taxes. What is the net pay for the week? a. $300 b. $330 c. $350 d. $400

A.

Common Stock provides the shareholder with: a. ownership in a company. b. a set interest rate per year. c. guaranteed annual dividends. d. insured protection on investment.

A.

If Jessica chooses to buy more auto insurance this year than she bought last year then Jessica has probably decided that: a. the benefits of more auto insurance are greater than the cost. b. more auto insurance will reduce her risk of an accident. c. this added insurance will help her savings grow faster. d. she will drive more safely in the future.

A.

If a borrower chooses to pay back a loan over a longer period of time. the monthly payment is: a. lower and the interest paid is higher. b. higher and the interest paid is higher. c. lower and the interest paid is lower. d. higher and the interest paid is lower.

A.

Some people choose to stop attending high school before graduation. What is the opportunity cost to the individual of dropping out of high school? a. The lower income earned in the job market. b. The lower interest rates one is charged for credit. c. The higher taxes one pays for leaving school early. d. The payments made to companies hiring drop-outs.

A.

"Pay Yourself First" means that: a. All bills get paid before any saving. b. Money is set aside for saving before spending. c. Fixed expenses are paid before flexible expenses. d. Credit cards pay for what you don't have as income.

B.

True or False: If I needed money for an emergency, a pay day loan officer would be a good advisor for my credit needs.

False

True or False: At my bank, there are people willing to help me with my financial questions.

True

True or False: Investing in the stock market is a good idea if you are trying to save over a long period of time.

True

True or False: When I figure the amount of my next paycheck, I calculate the hours worked multiplied by the rate per hour. This tells me how much my check will be.

True

True or False: When I use my debit card, I should always enter the amount in my check register.

True

A typical characteristic of entrepreneurs is that they: a. like to work part-time. b. willing to take risks. c. would rather save than invest. d. enjoy working under supervision.

B.

Human capital consists of: a. stocks and bonds. b. knowledge and skills. c. plant and equipment. d. saving and investments.

B.

The best indicator of the cost of a loan is the: a. amount of down payment. b. annual percentage rate. c. number of payments. d. monthly payment.

B.

Using a debit card to purchase a good is most similar to using a: a. loan. b. check. c. credit card. d. money market account.

B.

What is the general relationship between risk and reward? a. the higher the risk, the lower the potential reward b. the higher the risk, the higher the potential reward c. the amount of risk does not influence potential reward d. there is a relationship, but it is uncertain

B.

When making an investment, "market price risk" refers to which possibility? a. the difficulty of converting one's investment into cash b. the value of the investment could decrease over time c. the inability to get any money back from the investment d. the interest earned might be greater than the rate of inflation

B.

Which three things do creditors consider to be most important when judging a person's creditworthiness to buy a house or car? a. marital status, gender, location b. character, collateral, capacity c. length of loan, credibility, commissions d. occupation, connections, income sources

B.

Which would be considered a human resource? a. office building b. factory worker c. phone book d. electricity

B.

Disposable income is the money that is: a. deducted from your paycheck. b. budgeted for variable expenses. c. spent or saved after deductions. d. saved and invested each month.

C.

Jamal values three goods in this order: (1) a CD player; (2) a computer game; and (3) a sweatshirt. Each item cost $50. Jamal bought the CD player, what he wanted most. His opportunity cost is the: a. sweatshirt. b. CD player. c. computer game. d. sweatshirt and the computer game.

C.

Liquidity risk is higher for which type of investment? a. real Estate b. mutual fund c. savings account d. individual stocks

C.

One consequence of scarcity is that: a. there is full employment of resources. b. the production of goods and services is constant. c. people have to make choices among alternatives. d. products which are plentiful have relatively high prices.

C.

Suzy backs her car into a metal fence, causing $500 of damage to her car. Suzy has an auto insurance policy with a $200 deductible. To get her car fixed, how much will her auto insurance company pay? a. $0 b. $200 c. $300 d. $500

C.

What are the three most important criteria to consider when investing? a. size, insurance, taxes b. leverage, margins, credit c. risk, rate of return, liquidity d. collateral, access to accounts, dividends

C.

What is the opportunity cost of letting your interest compound in your savings account instead of withdrawing the interest as it is earned? a. lower taxes in the current year b. increased risk of losing savings c. less money for current purchases d. more interest on the savings account

C.

Which strategy is most likely to improve most people's financial situation over a lifetime? a. using credit to spend more than a person earns. b. making financial decisions quickly based on intuition. c. saving early in life when a person begins earning an income. d. gaining work experience early instead of continuing school.

C.

A key advantage of getting credit is that it can help people: a. sell assets. b. increase their net worth. c. reduce rick when investing in stocks. d. buy a good or service today and pay for it later.

D.

Beginning to save while you are young is recommended by financial experts because it: a. is easier to save when you first begin earning income. b. is hard to save later in life when you have more income to spend. c. allows you to lock in higher interest rates when you buy on credit. d. lets compound interest work in your favor by earning interest on interest.

D.

Charlie opens a savings account and deposits $500. If the savings account has a fixed annual interest rate of 5 percent, and he makes no additional deposits or withdrawals, what amount will Charlie have in his savings account at the end of two years? a. exactly $505 b. exactly $550 c. less than $550 d. more than $550

D.

The first three steps of economic decision-making are to: a. draw a conclusion, construct a model, and make a generalization. b. identify assumptions, make a policy, evaluate the policy. c. gather facts, form a theory, and conduct a simulation. d. define the problem, list alternatives, and state criteria.

D.

What is the difference between gross and net pay? a. Net pay is gross pay minus saving. b. Gross pay is net pay minus saving. c. Gross pay is net pay minus deductions. d. Net pay is gross pay minus deductions.

D.

Which is the best description of collision coverage in an auto insurance policy? a. It provides in come when the policyholder is unable to work after and accident. b. It covers the cost of damage to an auto as a result of fire, theft or storms. c. It covers the cost of property damage or injuries to others caused by the policyholder. d. It provides for the repair and replacement of the policyholder's car if it is damaged in an accident.

D.

Which of the following is typically true? a. Correct choices have no costs. b. people do not respond to incentives. c. Voluntary trade causes winners and losers. d. People's choices have consequences for the future.

D.

Which type of financial institution typically charges the highest interest rates for loans? a. credit Unions b. commercial Banks c. savings and loans d. payday loan companies

D.

True or False: Sellers must legally tell a buyer if a good or service is not good quality.

False

True or False: When I consider a full-time job offer, the rate per hour or the salary is all that should influence my decision.

False