practice test for personal finance
if a person receives a 3% salary raise and inflation is 5% the real raise was
-2%
how many days is the grace period for all credit cardholders
21
what is an advantage of buying municipal bonds
Interest received from this type of bond is exempt from federal income tax
what is the oldest financial market in the United States
New York stock exchange
Why does a corporation issue bonds?
To raise money for expansion or other company operations
which of the following is NOT true and bonds
a bond is guaranteed by sec
a person used a card to make a long distance phone call which type of card was used to make the call
a cash card
What is a Roth Individual Retirement Account
a financial product to help people save for retirement
which example is a lending situation
a lender who offers to refinance the loan at a higher interest rate when the person is unable to make payments
it is generally a good idea to borrow money and repay the amount borrowed with future income when
a person needs to by a car to get a better paying job
it is generally a good idea to borrow money and repay the amount borrowed
a person to buy a car to get a better paying job
a person has a car loan that she has to repay monthly over five years she has
a secured installment loan
whole life insurance is more expensive than term life insurance because in addition to death benefit, whole life insurance policies
accumulate cash value
a person has healthinsurance plan with a 50$ co-pay. this 50$ payment is the
amount paid to the doctor at each visit
to receive the benefits of overdraft protection a person must
apply for the service for his bank
to receive the benefits of overdraft protection a person must
apply for the service from his bank
a true statement about over the limit fees is that they
cannot be charged without the credit cardholders permission
a bank CD is a
certificate of deposit
what products has the highest growth and the highest risk
common stock
when deciding between two jobs, an individual considers the compensation packages offered by each company. Which compensation package is better
company b, because the total compensation includes health insurance and a retirement plan
a wise credit shopper is a person who
compares both interest rates and fees charged by a number of banks
if a persons company will match her retirement plan contributions, it is smart for her to
contribute to the retirement plan
one reason that term life insurance is usually less expensive than other types of life insurance is that it
covers the insured person for a limited time
the national credit union administration insures account at
credit unions
a true statement about online banking is that
current balance for account can be checked while on vacation
a person bought a 50,000 life insurance policy the 50,000 amount of coverage is called the
death benefit or face value
the major difference between a credit and a debit card is that
debit card charges are automatically withdrawn from a persons bank account
a person reconciling her checking account notices that the balance in her checkbook register does not match the balance on the bank statement. What action is appropriate for the person to take first
determine if all checks issued have cleared
an example of an electronic funds transfer is a
direct deposit of a pay check
money for saving and investing generally comes from
discretionary income after paying monthly expenses
all the following are good reasons to have a bank savings account EXCEPT that funds deposited in savings account
earn high dividends
tax refund loans are known for being
extremely expensive
which was the name of the original company that started the FICO credit scoring system
fair isaac corporation
on a budget necessary expenses that remain the same each month are called
fixed expenses
a credit card grace period is the period of time the credit card company gives to the cardholder
from the billing date to the payment due date to make a payment to avoid a late fee
the difference between a blue chip stock and a growth stock
generally pays little to no dividends
a person may be entitled to a tax refund if she
had more taxes deducted from her pay than necessary
before investing in stocks a person should
have a sufficient amount of money in an emergency fund
the consumer financial protection bureau was created to
help the public become informed consumers
A recession is characterized by
high unemployment
a recession is characterized by
high unemployment
a lender recommends that george buy a credit life insurance on his car loan .
if george dies while he is paying the car loan, the insurance company will pay off the loan
mortgage insurance is often required by a leader in order to protect the lender
in the event the borrower defaults on the loan
a persons savings account earned interest. this person wants to know if he must pay taxes on the interest earned
interest earned that is more than 10$ is income and taxable
before using a credit card for a cash advance a person needs to know that the
interest rate on the cash advance beings to be charge immediately
Why might rising interest rates depress stock prices:
investors might move from stocks to invest bearing bonds
the main difference between a personal check and a cashiers check
is guaranteed to be paid by the issuing bank
how does having a savings account help a persons financial wellbeing
it can help a person achieve financial goals
when selecting a student loan, all of the following criteria should be considered except the
location of the lender
it is wise for a single , 65-year old person who is planning to retire in one year to have a
low debt
of the following the most liquid type of investment is a
money market account
john has a store charge credit card that is different then most credit cards because it
must be paid in full every month
the difference between buying 100 shares of one stock or 100 shares of a mutual fund is that
mutual funds are more diversified
one factor that could influence the salary givin for jobs in a specific profession is the
need for new employees in that field
when a person cancels a term life insurence policy,that person can expect to receive
no money from the insurance company
when a person cancels a term life insurance policy, that person can expect to receive
no money from them
a person was told by her insurance agent that she needs renters insurance to cover the potential loss
of personal items as a result of a fire
when a person uses a 50$ gift card to make a 75$ purchase this person must
pay an additional 25$ to make a purchase with the card
a person who signed up for overdraft protection ,has a checking account balance of 50$. he writes a check for 100$ the bank will
pay the 100$ check
why does person 1 have a higher net worth then person 2
person ones assets are greater than his liabilitys
Once a claim is paid by the insurance company for car damage due to an accident that was caused by the insured policyholder, the insured person can usually expect that
premiums will be increased
When a self-employed person decides to purchase disability insurance it is generally to
protect against the financial result of not being able to work
the main reason corporations issue stock is to
raise money for the corporation
financial planning is important because it helps a person to
reach financial goals and protect assets
the type of interest that would increase the persons net worth is interest on
savings account
the main purpose of requiring a cosigner on a loan is to
secure the loan if the lead borrower defaults
the main purpose of requiring a cosigner on a loan to
secure the loan if the lead borrower defaults
Buying a treasury bill (T-bill) is best for investors who are looking for
secure,low risk investment
if a person pays off her car loan today, how long will that loan appear on her credit report
seven years from when she last made her payment on the loan
Susan gives Marie her credit card union debit card and personal identification number so that Marie can withdraw 25$ Marie withdrew 100$ how can susan get her 75$ back
she cannot because Marie used Susans card and pin
a person has a checking account with overdraft protection. if this person writes a check for more then the balance in her checking account,what is likely to happen
she will be charged a fee in addition to paying interest on the amount of money the bank has loaned her to cover the check
Ava got a new credit card from american bank and wants to cancel her USA credit card. the best method to do this is
shred the USA credit card and instruct the credit card company in writing or by phone to close the account
why was barter started
so ppl could get what they want by trading something of value with each other
what has the highest potential risk for investors
speculative stock
dollar cost averaging is used for investing in
stocks
the dollar amount of a debit card purchase is usually
taken out of the persons checking account immediately
what is the negitive impact of cancelling a credit card
the amount of available credit will be lower
creditors are required to give the finance charge and
the annual percentage rate on the monthly statement
What is the main feature that describes an installment loan such as car loan or a furniture loan
the borrower has to make equal monthly payments over a period of time
there is a high risk that a stock will become worthless when
the company goes bankrupt
having a written will is necessary for
the distribution of a persons assets
most often the source used for a college student loan is
the federal government
a persons employer offers the opportunity for paychecks to be directly deposited into an employees check or saving account. Which of the following is NOT true about direct deposit
the money deposited accumulates a higher rate of interest
U.S. postie money orders are sometimes an unreliable payment because
they may be counterfeit
how do banks or credit unions use savings account deposits
to make customer and business loans
financial wellbeing means that a person has
total assets that are worth more then the amount he owes
a person who worked for 5 years has a 401 (k) retirement plan. What is the wise thing to do with his 401 (k) when he moves to another job at a different company
transfer (rollover) the account balance to an Individual Retirement Account (IRA)
a consumer is protected from credit card fraud or abuse through the
truth in Lending Act.
a consumer is a protected from credit card fraud or abuse through the
truth in lending act
which is a good example of being wise consumer
using discount coupons when shopping
if a person has to pay 30$a year in interest on each 100$ he borrows, the cost is considered
very high
which of the following statements is true and credit
when colleges and government agencies give student loans, they are providing students with credit
it is usually less expensive for a policy holder to pay insurance premium
yearly
taxes on a traditional idiviual retirement account are paid
yearly , on the amount of money withdrawnf from the account
