Personal Finance - Chapter 3

If your projected net cash flow is negative, which of the following should you do first?

Take steps to reduce your discretionary spending or increase your cash inflows.

Whether its charity, gift giving, or lavish birthday parties for your kids, it makes no sense to be generous with money you can't afford to give. Which is not a budget solution for this mistake?

Use a credit card to balance your budget

Which is not an appropriate transaction account?

Valley National 3% Certificate of Deposit

Ronnie received a suspicious email prompting her to enter her bank account number and password. Her financial institution has assured Ronnie that it will never request sensitive information via email. Ronnie appears to be the target of a ______ scheme.

phishing

The "Four Ps" to consider when choosing a financial institution include product, price, people, and

place.

An account that pays a nominal rate of 3% and compounds monthly will have an APY of

3.04%

Ryan has $5,000 to invest, and he wishes to double his money in 9 years to pay for a vacation to celebrate his 20th anniversary. Approximately what APY would he require to reach his goal?

8%

Calista has saved $20,000, which she plans to use for a down payment on a home within the next year. She would like to earn interest on her savings and she is concerned about the safety of her money. She is considering the following options. Which option would you recommend for Calista?

A money market deposit account earning 1.11%

Setting up automatic bill payment whenever possible will help ensure that

All of the above | \/ you avoid late payment fees, your bills are paid on time, your bills are paid on time.

Which of the following is (are) good reasons for tracking budget variances?

All of the choices are good reasons to track budget variances.

Which is not a recommended practice to avoid identify theft?

Carry extra credit cards and IDs for verification

Which of the following budget categories is a variable expense?

Food costs

Janice's monthly expenses are $6,000, and she has $10,000 in checking and savings. Which of the following is true about her financial situation?

Janice needs to increase her emergency fund.

Which of the following budget categories is a fixed expense?

Mortgage payment

Even though you can't necessarily anticipate unexpected events like layoffs and illness, you can lessen the impact by maintaining

an emergency fund.

Overdraft protection is an

automatic loan in the amount of the insufficient funds to cover an incoming check or debit.

In a committed relationship, when one partner hides purchases from the other partner, or makes a major purchase without consulting the partner, it is called

financial infidelity

Although an annual budget can help with the big picture, most people find it necessary to budget on a ______ basis covering the entire _____ to coincide with payment obligations.

monthly; year

If you write a check or use your debit card when there isn't enough money in your account to cover the payment, this is known as a(n)

overdraft.

The principle of paying yourself first means that you should

set aside the money necessary for achieving personal goals before you spend money on non-essentials during the month.