Personal Finance: Credit and Insurance
What effects are Mary and Todd likely to face if they declare bankruptcy? Check all that apply
-They will find it hard to get new loans -They will have to pay higher interest rates on any new credit cards they obtain -They will have poor credit reports
What steps can Booker take to improve his credit score? Check all that apply
-make all of his loan and credit card payments on time -check his credit history for accuracy -find a second job to improve his income in order to pay off his debt more quickly
Why is it important to check your credit history? Check all that apply
-to track my current debt -to ensure that the information is correct -to monitor my credit score
People in financial trouble are advised to contact creditors to negotiate a _____ plan
Payment
Why does insurance often provide "peace of mind"
People are less worried when they know they have protection from risk
Bryan receives an e-mail from a group posing as a police officers association and asking for bank account information. This is an example of
Phishing
Daniel wants to buy a laptop computer, and he has $300 in savings. He can purchase a new computer for $279 or a refurbished [repaired or renovated] computer for $100. What should Daniel do next
Review the pros ad cons of the different available computers
Which describes the difference between secured and unsecured credit
Secured credit is backed by an asset equal to the value of a loan, while unsecured credit is not guaranteed by a material object
The Jones family would like to buy a home, but they have a large amount of debt that has led to a weak credit score. What step could the Jones family take to improve their credit
They could hire a financial adviser to figure out how to pay off their debt
Which questions about risk should someone ask before making economic choices? Check all that apply
What problems are most likely to happen? What could go wrong? What problems could be most damaging?
When can a credit agency release someone's credit information in Florida
When a consumer authorizes it
Insurance is a financial service that allows a
consumer to share liability with a company
In determining whether to issue a loan, banks are not allowed to ask about an applicant's
country of origin
Filing for bankruptcy can make it hard for a consumer to reestablish and obtain
credit
The type of credit people are most likely to use during their lifetimes is a
credit card
Most people prefer to pay health insurance premiums rather than pay out-of-pocket for medical expenses because
medical costs can be extremely high, and insurance is more affordable than paying out-of-pocket for a hospital stay
People who want to buy a house typically ask the bank for a _____ over a 10- to 30-year period
mortgage
Consumers who make higher payments on credit cards
pay less interest in the long run
How can Elizabeth most responsibly pay off her bill sooner
pay more than the minimum payment each month
A credit score is based in part on
payment history and total debt
Buying a new car can create a financial challenge because car
payments must become part of the budget
What is the $75 payment Nelson must make each month
premium
Which is always a cost when buying insurance
premium
Simple interest is paid only on the
principal borrowed
What is a main disadvantage of leasing a vehicle compared to buying a vehicle
the up-front cost
Which best describes a way people can use personal loans
to pay for college
To revise a monthly budget, changes in which categories need to be identified? Check all that apply
income amount budgeted expenses
A credit score is based in part on
income and total debt
What future opportunities will most likely be affected by Lesley's poor credit? Check all that apply
insurance jobs rentals
An entrepreneur keeps backup funds in a savings account so that if their business experiences a loss, they will be able to recuperate. What type of risk management is this an example of
reducing risk
Which of these would require a significant but temporary budget revision
replacing a broken dishwasher
Both mortgages and auto loans
require minimum payments
Insurance companies create a pool of funds to handle
risk
When revising a budget, it is important to make choices that allow you to continue _____ money
saving
If two people are invited to invest and become partners in a business, the business owners will then _____ the risk
share
What is the definition of premium
the amount paid for an insurance policy
When planning a budget, the biggest consideration should be the
total recurring monthly expenses
Zachary's student loans are an example of what type of loan
unsecured loan
Tom finds a second personal loan option. This loan would also require him to repay the principal in one lump sum after three years Remember, A refers to the total amount owed. Calculate the total amount that Tom would repay
$11,337
If Claire does not make any payments, how much will she owe after ten years
$12,136.67
Tom needs money to pay for education expenses, and he finds a personal loan. The loan would require him to repay the principal in one lump sum after three years Remember, A refers to the interest accrued. Calculate the total interest Tom would pay, in addition to paying back his $9,000 in principal
$2,970
The simple interest on a loan of $200 at 10 percent interest per year is
$20 per year until the loan is paid off
What is the compound interest on a three-year, $100.00 loan at a 10 percent annual interest rate
$33.10
What best determines whether a borrower's investment on an adjustable rate loan goes up or down
A market's condition
Under which circumstance would someone need disability insurance
A person was in a car accident and cannot work for several months
For which buyer would a lender most likely approve a $200,000 mortgage
A person with a credit score of 760 with a small amount of debt who has had steady employment for many years
The safest way for someone to make an online purchase is to
Buy from a reputable website
What is the most acceptable and easy way to revise a budget to allow for the purchase of a new couch
Cook dinners at home instead of going out to eat
It is important for victims of identity theft to contact the authorities
Quickly to protect themselves from financial losses
Joann has decided to purchase a new car. What should she do next according to the decision-making process
Research available cars for sale
Which person is a victim of identity theft
Thomas, whose credit card information was stolen and maxed out at a jewelry store
A good rule is to spend no more than 25-30% of your _____ income on housing
gross
Which expense category will most likely be changed to allow money for the purchase of a car
entertainment
A credit score between 500 and 600 means a consumer would most likely
find it hard to get a loan
When making a decision about housing, the first step should be
gathering information on available housing
What is a benefit of obtaining a personal loan
getting large amounts of money to use immediately
Which information is included on a person's credit report? Check all that apply
Credit cards and loans. Total amount of money owed. Whether bills are paid on time. How much money lenders will loan.
Which step in the decision-making process would most benefit Simon
Evaluating results
The chart shows a range of credit scores
Find it hard to get a loan
The best way a bank can protect a victim of identity theft is to ______ his or her account
Freeze
Which steps are involved in filing an insurance claim? Check all that apply
Get expenses covered. File a claim. Experience damages
A car dealership analyzing whether it will loan money to William to buy a new car finds that his credit score is in the "very good" range
He is a low-risk borrower who qualifies for lower interest rates
What is the first step in the decision-making process
Identify the decision
Checking a credit report is a good way to
Know whether credit is improving
If the loan company does approve Lesley's loan, what provision is likely to be part of the loan agreement
Lesley will have to pay a higher interest rate
Consumers who pay more than the minimum payment on credit cards
Pay less interest in the long run
Which describes the difference between simple and compound interest
Simple interest is paid on the principal, while compound interest is paid on the principal and interest accrued
Which describes an example of using unsecured credit
Someone buys new gutters for a home with a credit card
Marlene has decided to save $3,500 so that she can attend the nearby community college. Which step in the decision process should Marlene take
Take action
What must happen in order for an insurance company to make a payout? Check all that apply
The insurance company must verify the claim. The insured party must file a claim. The insurance policy must be in place. The insured party must experience a covered loss
How can an insurance company make a profit by taking in premiums and making payouts
The value of the premiums the company takes in is higher than the value of the payouts it makes
Which statement best describes how lenders determine borrowing conditions for a customer
They access the customer's credit reports
What is an appropriate budgeting question
What are my recurring expenses?
Which questions about risk should someone ask before making a big purchase
What problems are most likely to happen? What could go wrong? What problems could be most damaging?
Which questions about risk should someone ask before making a big purchase? Check all that apply
What problems are most likely to happen? What could go wrong? What problems could be most damaging?
The type of credit people are most likely to use for small purchases during their lifetime is
a credit card
When an insurance company needs to provide a payout, the money is removed from
a pool of funds
Which is the most important consideration when deciding to purchase or lease a vehicle
all current monthly expenditures
A similarity between mortgages and auto loans is that both
are less risky for lenders
Some major considerations when deciding on housing are needs and
budgeting
If Roland wants to invest money in his own business, how can he avoid risk
by deciding not to invest the money
Roland has purchased a new tablet. How he can avoid risk? Check all that apply
by using a screen protector by using an antivirus app by using a protective case
Buying a new car can create a financial challenge because
car payments must become part of the budget
What is the $25 fee Maria's mother paid when Maria visited the doctor
co-payment
Which type of insurance policy would someone get to protect others only
life insurance
What is an advantage of renting a place to live
lower up-front costs
What steps can an individual take to improve a credit score? Check all that apply
make all loan payments on time check credit reports for accuracy avoid opening credit accounts that are not needed keep balances low
An example of secured credit is a
mortgage
A way to build good credit is
paying bills when they are due
