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T.S. Final '24-25
Transition Skills Final Semester 1 2024-25
Question | Answer |
---|---|
Which of the following steps in the First Foundation? | Pay off debt |
Why is compound interest more advantageous than simple interest? | In compound interest, you earn interest on not only your principal, but also on the interest you've already made. |
When it comes to personal finance, the math is easy. What’s challenging is managing your ______. | Behavior |
Why should interest earned not be a factor with your emergency fund? | The emergency fund is not intended to grow wealth. |
What is the single most important decision that investors make? | How to divide their assets between stocks and bonds |
How does investing in the stock market differ from putting money in a savings account at a bank? | If you need to access your money within the next few months, putting money in savings account is a better option |
Instead of borrowing money for large purchases, you should set money aside in a ______ over time and pay with cash. | Sinking fund |
Which of these is the MOST compelling reason for young adults to invest? | When you're young, you have more disposable income available for investments. |
Which of the following statements is true of online and mobile banking? | Online banking describes the use of the internet to conduct banking transactions, while mobile banking utilizes a portable device |
To ensure that some of your retirement savings will not be subject to income tax upon withdrawal, you would contribute to | Roth IRA |
Why is having a fully-funded emergency fund so important when it comes to your financial well-being? | The purpose of an emergency fund is to set money aside for unexpected financial emergencies and to provide a sense of financial security |
What is the largest and most common checking account fee? | Overdraft fees |
"N/A" means | Not applicable |
A retirement plan found in nonprofit organizations such as churches, hospitals, and schools. A retirement plan found in nonprofit organizations such as churches, hospitals, and schools. | 403b |
Which statement is true about liquidity? | The more liquid an investment, the less the return |
Which of the following statements is an advantage of online banking? | Using online banking, you can request transfers, pay bills, and automate your savings without visiting the bank branch |
You are at the checkout counter of Quik Trip and use your debit card to pay for your items. Where does this purchase come from? | It is deducted directly from your checking account |
Teddy's bank is FDIC Insured. What is the benefit to him? | If Teddy's bank goes out of business, he will receive all of his money from his account up to $250,000 |
Savings accounts and money market accounts are most appropriate for | Emergency funds and short term goals |
Quality of an asset that permits it to be converted quickly into cash without loss of value; availability of money. | Liquidity |
A list of your investments | Portfolio |
This term describes the amount of money the employee receives after all deductions are made | net pay |
A fee paid by a borrower to the lender for the use of borrowed money | interest |
Money set aside and left alone for a "rainy day." | emergency fund |
Interest paid on interest previously earned | compound interest |
If you use your debit card to pay for something, where does the money come from? | The money is taken out of your checking account |
Savings accounts and money market accounts are most appropriate for | emergency funds and short term goals |
What are the two most important factors in calculating your credit score? | payment history and accounts owed |
What is the best way to improve your credit score? | make all payments on time |
What is a good way to get started on establishing credit history so that you can have a good credit score? | ask your parents to co-sign a credit card or add you as an authorized user on their credit card |
If I did not make a payment on time, how long will that information stay on my credit report? | 7 years |
How much money should an adult have in an "emergency fund"? | $1,000 |
Why don't people save money more often? | They don't have the discipline or focus, and they don't set up a budget |
What is "gross pay"? | The amount of money you have earned before taxes are taken out |
What is an insurance premium? | The amount of money you pay the insurance company every month so that you can have insurance coverage |
A reference on a job application or resume should be | someone who has knowledge of your skills, work habits, and character (not a relative) |
What type of auto insurance are people required to have? | insurance for if you injure another person |
Why would someone choose to get long term disability insurance even if they already have health insurance? | Health insurance only covers medical bills, while long term disability will help compensate for lost work with 40-60% of their income. |
Why would investing in the S&P 500 index fund be an example of a diversified portfolio? | The S&P index fund has many companies from many different sectors. |
What is the Rule of 72? | It is the amount of time (in years) that it takes an investment to double |
What is an effective strategy for saving money? | Save a certain percentage of each paycheck and deposited into a savings account. You can have this automatically transferred every month. |
Refers to an arrangement where you are responsible for paying a percentage of covered medical expenses after your deductible is met? | co-insurance |
What type of insurance would cover if your car window had been smashed when someone tried to break into it at night? | comprehensive |
Who tracks all of your credit information? | Companies named Equifax, Experian, and TransUnion |
How can your credit score impact your financial situation? | Your credit score can determine whether you are approved for a loan and what the interest rate on that loan will be |
Soft skills can be described as... | Skills that highlight a person's ability to work effectively with others |
What is a deductible? | The amount you have to pay before the insurance company starts to pay. |
What type of insurance will cover damage to a car caused by a natural disaster such as a tornado or flood? | comprehensive |
What type of insurance will cover if someone runs into their neighbor's mailbox? | collision |