POB Test Questions
List the steps of the financial planning process
1- Determine your financial situation 2- develop you financial goals 3- identify possible course of action 4- evaluate you plan 5- implement a financial plan of action 6- review and revise
What are the 7 steps to prepare a budget?
1- set financial goals 2- estimate income 3- budget for the unexpected 4- budget fixed expenses 5- budget variable expenses 6- record spending 7- review and revise
explain major functions of the federal reserve system in the US economy
Clearing checks, acting as the fed. gov. fiscal agent, supervising member banks, regulation the money supply, setting reserve requirements, supplying paper currency
How are fixed expenses and variable expenses different?
Fixed expenses occur regularly and are paid regularly, variable expenses are expenses that can be changed and can be controlled more easilyy then fixed expenses
What are some examples of long-range financial goals that consumers may have?
Getting a college education, buying a car, and starting a business
list 7 types of financial institutions
commercial banks, savings and loan associations, credit unions, mortgage companies, finance companies, insurance companies, and brokerage firms
compare and contrast three types of banks that are found in our economy
commercial banks- checking, saving, ect saving and loan associations- interest credit unions- not-for-profit
How are credit union different from a commercial bank?
credit union are not-for-profit banks set up by organizations fro their employees to use, in a commercial bank it is entire range
What is the difference between gross and net pay?
gross pay is he total amount of money you earned for a specific time, net pay is your gross pay minus deductions
Name some financial risk
inflation, interest rate, income, personal, and liquidity
Discribe he functions and characteristics of money
medium of exchange, standard value, store of value, and what money looks like
What are 4 types of loans that a bank makes?
mortgage, commercial, individual, line of credit
What are 5 characteristics that money must have?
stable, accepted, divisible, portable, and counterfeit
what are the three main functions of a bank?
storing money, transferring money, and lending money
What is the mission of the federal reserve?
to provide the US with a safe, flexible, and stabile monetary and financial systems
Disscuss sources of risk
trying to do things that may help you a lot but also hurt you a lot if you were to fail