Personal Finance - Unit 6
Convenience foods
When making food decisions, which is likely to be the least expensive?
a lease.
A rental agreement is often referred to as:
Depreciation
Alyssa is considering purchasing a car and wants to be sure she can afford to drive it during the school year when she does not have a job. Which expense would not be considered part of the total transportation expenses?
employee benefits.
As part of Nicholas' new job, his employer will provide health, life, and disability insurance. Access to this insurance is provided in addition to his regular salary. This is known as:
Use a credit card.
Ashley plans to do some of her Christmas shopping online. What is a safety tip to follow when she is shopping online?
Close the account by phone and in writing, then destroy the card.
Becky no longer wants to use her Clothes-R-Us store credit card. What is the best thing she could do with the credit card?
being upside down on the loan.
Brett borrowed money to purchase a vehicle without making a down payment and now he owes more on the vehicle than it is worth. This situation is referred to as:
Take a college admissions exam in Carson's name
Carson's wallet with his driver's license, a debit card, and his credit card has been stolen. Which is not something an identity thief might realistically do with this information?
security deposit.
Chad has decided to rent an apartment and is gathering information to be sure he has enough money saved for all the expenses when he moves in. His landlord explained to him that he would need to pay a refundable fee to cover any potential damages that might occur while Chad is living in the apartment. This fee is called the:
Signing the back of her card with her signature and "Please see picture ID"
Charis wants to decrease the risk of fraudulent use of her credit cards. Which strategy would be the most effective?
David's credit payments are within the safe range for someone with his income.
David earns $5,000 per month at his accounting job. He has a student loan payment of $120, a car loan of $300. Which statement is true?
Maintain reasonable amounts of available credit
Edward wants to develop a positive credit history. How should he do this?
Amanda will receive any proceeds when Eric dies.
Eric has chosen Amanda to be the beneficiary of his life insurance policy. What does this mean for Amanda?
When you are borrowing, you are spending future income.
Evan is writing a scholarship essay about the importance of responsible money management. He wants to explain the meaning of borrowing. Which would explain the importance of understanding the process of borrowing money?
James backed into a vehicle in the grocery store parking lot and caused $2,000 in damages to his own car and $3,000 in damages to the other vehicle.
If a person drives an automobile, they are required by law to have automobile liability insurance. In which situation would this type of policy protect the policyholder?
Zach and Leah have rented an apartment in an urban area.
In which scenario should renters insurance be considered?
Health care expenses
Insurance can be purchased to protect one from which losses?
individual has dependents.
It is recommended that life insurance be purchased when the:
$600
James received his first medical bill of the year. It was a total of $1,000. His health insurance policy has a $500 deductible and a 20% co‐insurance. How much of the medical bill will James be responsible to pay?
Jenny should obtain a secured credit card
Jenny is 18 years old and has applied for credit for the first time. Her credit application was declined because she has no credit history. What should be recommended in order for Jenny to build a positive credit history?
Equal payments are required on a regular basis until the loan is repaid.
Leah is trying to explain the difference between open-end and closed-end credit to her roommate. Which should she include in her description of closed-end credit?
premium.
Maggie will need to pay $120 per month in order to purchase a health insurance policy. This monthly payment is known as the:
Phone numbers
Matt wants to guard his personal information. Which personal information is least likely to be used by scammers?
Megan missed making her January and February credit card payments while she was participating in her college's Study Abroad program when the friend she left in charge of sending the payments in forgot.
Megan's credit card statement indicates that she is now paying a penalty APR. Which scenario best describes why?
she would be renting the vehicle by making payments over time, although the vehicle title would remain with the lease grantor.
Melissa needs a vehicle and is considering leasing one. This means:
Patty and Emma
Patty recently moved into a new apartment with her friend Emma. Who is responsible for purchasing renter's insurance?
Review shipping and return policies in advance
Paxten is purchasing a new phone online. What is the best tip he should consider to do so safely and maximize his satisfaction?
make the final amount paid substantially higher than the amount initially charged to the card.
Paying the minimum payment on a credit card every month will:
Evaluate the opportunity cost and trade-offs to purchasing the car
Perry would like to purchase a new car. What should he consider first in the planned buying process?
the cost of using someone else's property.
Rent is defined as:
A product review from an independent company
Sally is researching a new tablet and conducting research using a variety of sources. What is an example of an unbiased source?
Sarah can only obtain a credit card if she has a co‐signer or proof of sufficient income to make the required payments.
Sarah will turn 18 next month. She plans to apply for a credit card. Which statement is true?
Her personal preferences
Shelby is working on her spending plan and would like to spend less on her food for 6 months as she saves toward purchasing a more reliable vehicle. As she makes her plan, which factor would be least important to consider?
the value of the home after the mortgage debt is subtracted.
The equity that one builds by making mortgage payments is:
keep the total amount of money she has borrowed, not including her house, under 20% of her net income.
The financial counselor that Ariel consulted about her use of credit recommended that she keep her use of credit within safe boundaries. Ariel's financial counselor most likely told her to:
her policy's deductible is $500.
Tiffany was recently involved in a vehicle accident. In order to get her car fixed, her insurance company is requiring her to pay the first $500 of the repair bill because:
Credit is extended in advance so the borrower does not have to apply for credit each time credit is desired.
To answer the essay test question about the meaning of open‐end credit, Ryan should include which statement?
Tyler needs to pay the credit card balance in full every month before the due date listed on the credit card statement.
Tyler is trying to be responsible in using his new credit card and has heard there is a way to avoid paying interest on the things he charges. How can he legally avoid paying interest when using his credit card?
Food
What is not an example of a durable good?
Property insurance pays for loss to the insured person whereas liability insurance pays for loss to other people.
What is the difference between property and liability insurance?
The interest rates on his loan will be higher, since his credit score is low.
When Bryce attempted to borrow money at the bank, he learned that his credit score is low. Which best describes what this is likely to mean for Bryce?
Once a year, from each of the three main credit reporting agencies
When may a person view his/her credit report for free?
Paying cash for a movie ticket
Which action will not make an individual vulnerable to identity theft?
Insurance combined with emergency savings provides a sense of financial security and peace of mind.
Which best describes the benefits of having insurance?
Check each credit report at least once per year.
Which is a general rule when dealing with credit reports to minimize identity theft?
Wrongfully acquiring and using someone's personal identification
Which is an act of identity theft?
Credit card company
Which is not an example of a data furnisher?
Medical information
Which is not included in an individual's credit report?
Research enhances satisfaction.
Why is investing in product research an important part of the planned buying process?
Jake has applied for 4 credit cards and a car loan in the past 6 weeks.
ake's credit application has been declined because of his negative credit history. Which is most likely to be true?
