LS Personal Finance Final Review
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each of the black spaces below before clicking
on it to display the answer.
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| What do Financial advisors say will give you a 90% better chance of reaching goals? | Write goals down
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| A well written financial goal includes what elements? | Specific, measureable, attainable, realistic, time-bound
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| What protects a customer against loss at a financial institution? | FDIC insurance
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| What has Check 21 done for electronic banking? | Instantaneous electronic banking
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| What medical information is found on a consumer's credit report? | Information regarding late medical payments
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| On average, what is the largest major expenditure? | Housing
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| What financial tool assists the individual with reaching financial goals and helps track where their money is going? | Spending plan
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| What is the least secure method for an employer to pay the employee? | Mailing printed paychecks
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| Does the government provide to health insurance for most American workers? | The American government does not provide health insurance to employed people.
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| What 2 types of insurance are included in a homeowner's policy? | Property and liability
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| What do goals help people focus on? | Important things keeping the end in mind
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| What is the relationship between values and financial decisions? | Because values are influenced by family, friends, and experiences, they affect a person's financial decisions.
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| How do financial decisions influence a person's interpretation of needs and wants? | By recognizing needs and wants, they guide a person's decisions
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| Identify a non-contractual (flexible) expense? | Eating out
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| What is the function of the Federal Deposit Insurance Corporation? |
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| What is the best way to handle job interview questions about your weaknesses? | Discuss a weakness you had, but have now overcome
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| What category of expenses does food fit in? | Cost of living expenses
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| What are some specific deductions taken from a person's paycheck? | Federal withholding tax, state withholding tax, and FICA
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| Is developing a spending plan a one time process? | Developing a spending plan is a continual process because it will change with an individual's or family's financial situation
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| According to the time value of money, how does the power of time benefit an individual? | Money paid out or received in the future is not equivalent to money paid out or received today.
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| What does "pay yourself first" mean? | An individual should consider savings to be a fixed expense
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| How does electronic banking benefit customers? | Electronic banking allows customers to perform transactions via electronic funds transfers 24 hours a day.
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| What accounts are unique to a credit union? | Share accounts and share draft accounts
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| Name an ATM safety tip. | Shield the screen from on lookers
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| What is the primary purpose of a checking account? | Help manage money and make paying bills more convenient
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| Why is Regulation E implemented by the Federal Reserve? | Combat the security issues of online banking
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| What is an advantage of using credit? | Not having to carry large amounts of cash
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| Name an example of identity theft. | An individual who uses another's personal information to opne an account.
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| What should a consumer do if they are a victim of identity theft? | Call all majoy credeit bureaus to request a "fraud alert" be put on file.
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| How can an individual protect their social security number which is the key number to their identity? | Obtain alternate numbers on driver's licenses, insurance cards or other financial materials.
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| What are two out-of-pocket costs of being insured? | Deductible and premium
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| What do people transfer when they buy insurance? | Part of the risk of financial loss to the insurance company
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| What does disability insurance replace? | A portion of one's income if they become unable to work due to illness or injury.
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| If a person plans to put a purchase on a credit card that will take them five months to repay, what is it important for them to consider when choosing a credit card? | Low annual percentage rate for purchases
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| If a person needs to borrow cash from a credit card, what is it important for them to consider when choosing a credit card? | Low percentage rate with a low minimum fee
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| What is the relationship between risk and return? | The higher the possible return, the higher the risk
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| What does an individual have to accept to increase the potential rate of a higher rate of return on their investments? | A growing risk to their capital invested
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| How should a person work toward a goal of buying a home? | Create a financial plan to save up for the down payment and other housing costs which may mean cutting current expenses to save money.
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| What is most important to remember about a housing lease? | The terms of a lease agreement are legally binding.
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| What is a security deposit? | Money paid prior to moving into a living space to the landlord or the property manager to be used for repairs or damage to the space beyond wear and tear expected.
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| What is the maximum amount an individual should pay for a home? | Two and one half times his/her annual household income
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| If a driver has liabilbity insurance on their vehicle and were involved in accident that was their fault, what would their insurance cover? | Injuries to the other driver and damages to the other driver's vehicle
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| What makes a new vehicle considered a "lemon"? | Remains unfixed after four repair attempts
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| If exspenses exceed income on a spending plan, what would be a financially smart solution? | Decrease expenses
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| Explain the liquidity of saving and/or investing? | Savings are generally considered more liquid and easily accessible
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| What form(s)must be completed when and employee starts a new job in order to receive a paycheck? | W-4 and I-9
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| What is the approximate amount deducted from the paycheck for taxes? | 31%
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| At which stage of the Personal Financial Management Pyramid is the process of writing SMART goals coarried out? | Every stage
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| What are the three stages of the financial life cycle? | Basic wealth protection, wealth accumulation, and wealth distribution
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| What is the purpose of a cover letter? | Get an interview
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| Why is investing in human capital for career development important? | An investment in one's human capital lasts a lifetime.
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| What does a person lose if they receive their pay for their job in the form of a payroll card, and the card is lost or stolen? | The individual may lose only $50 because of the Regulation E or Electronic Funds Tranfer Act
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| If no payment is made on a debt with an interest rate of 8%, according to the Rule of 72 when will the debt double? | 9 years
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| If you suddenly acquired $500 and wanted to save the money to be used for a specific purpose in five years, what type of cash management tool would be the best option? | A certificate of deposit because it would be for a specified time length
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| Beau discovered charges that he did not make while reviewing his credit card statement. What is the first thing he should do to resolve the theft? . | Contact the credit card company immediately
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| At 18 years old you applied for credit for the first time. Your credit application was declined because you had no credit history. What could you do to begin to build a positive credit history? | Obtain a secured credit card
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| Define deductible. | Amount paid by the policy holder for an agreed upon pportion of loss
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| Define stock. | A share of ownership of the assets and earnings of a company.
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| Define credit report. | A record of an individual's credit history.
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| Define net worth. | Amount of money left when liabilities are subtracted from assets.
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| Define phishing. | When internet scam artists use either pop-up messages or emails to lure people into giving personal information.
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| Define inflation. | Steady rise in the general level of prices
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| Define collateral. | An item promised to the lender if the borrower does not pay back the loan
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| Define broker. | A person licensed to buy and sell stocks and provide investrment advice.
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| Define premium. | Discounted savings tool purchased for 50% of the face value from the US government
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| Define mutual fund. | A company combines the funds of many different investors and then invests that money in a diversified portfolio of stocks and bonds
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| Define savings bond. | A type of debt that a company issues to investors for a specific amount of time.
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| Define generic brand. | Items that have less fancy packaging and are cheaper because they are not advertised.
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| Define diversified portfolio. | Spreading investment money among a wide array of investment tools that will provide an acceptable return with an acceptable exposure of riswk
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| Define tiered interest rate. | The amount of interest earned depends on the account balance
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| Tom is working for a grocer. He earns $8.00 an hour, works 40 hours a week, and gets paid every 2 weeks. He pays $63.08 into federal withholdings, $33.21 into state withholdings, and $42.05 into FICA withholding. | Tom's gross pay on his paycheck is $640.00.
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| Tom is working for a grocer. He earns $8.00 an hour, works 40 hours a week, and gets paid every 2 weeks. He pays $63.08 into federal withholdings, $33.21 into state withholdings, and $42.05 into FICA withholding. | Tom’s net pay on his paycheck is $363.32.
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| You made a mistake on your checking account recordkeeping and spent $10 more than you had deposited in this account. As a result, you can expect to be charged an: | Overdraft Fee
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| Tessa's net income is $1500 per month and her total expenses equal $1200. What is the minimum amount of money she should keep in a liquid asset emergency fund? | $9,000
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| What is the component that determines the majority of your credit score? | Outstanding debt
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| Define savings tools. | Secure and liquid accounts offered by depository institutions assisting in the management of a savings fund
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| Define withholding allowance. | Determines the percentage of gross pay which will be withheld for taxes
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| Define APR. | Annual Percentage Rate
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| Define financial goal. | Specific objectives that are accomplished through financial planning.
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| If you are going to the beach in one year and need to save $1,000, what would be the best savings or investment tool for you to use? | CD
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| The terms of your automobile insurance policy are 20/50/10. If you were in an accident involving 3 people having bodily injuries, what is the maximum the policy would pay per person for bodily injury | $20,000 per person with a maximum of $50,000
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| Define iability insurance. | The minimum amount of automobile insurance required by law
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| What does the spending plan encompass? | Future money management plan
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| What occurs as you move up the investment pyramid? | Risk increases
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| If you are going snow skiing in six months and need to save for the trip, what would be the best savings or investment tool for you to use? | Savings account
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| What formula is used to calculate net worth? | Total Assets - Total Liabilities = Net Worth
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| Differentiate between assets and liabilities. | Assets are everything owned of value and liabilities are everything owed to others.
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