Financial Literacy Exam Bundle Rated A+

5 steps of the financial planning process - Answer-1) evaluate your financial health- budgeting, financial statements, ratios- help you see where you are 2) define goals- should be specific, need for liquidity, protection (insurance), minimize taxes when possible 3) develop specific plan- set up 3...

Examples of short-term needs: - Answer--Emergencies -Vacation -Social Events -Major purchases Examples of long-term needs - Answer--Home Ownership -Education -Retirement -Investing Discretionary income - Answer-What you have left after you have paid your bills Principal - Answer-The a...

Sources of personal loans include - Answer-commercial banks, savings institutions, finance companies, and credit unions. Loan agreements with family and friends should - Answer-be in writing and signed by all parties. The personal loan process involves - Answer-submitting the application, nego...

investing - Answer-involves a reasonable amount of risk speculative risk - Answer-begins when an investor aims for returns well above market averages; refers to assets that have wildly unpredictable outcomes stocks and bonds commodities options precious metals collectibles - Answer-types o...

means having the knowledge and skills to manage your personal finances. - Answer-financially literate is a fee charged for using borrowed money for a purchase - Answer-interest relates to all of the different money decisions you make each day - Answer-personal finance Taxes and withholdings...

What was the median household income according to the 2015 U.S. Census? - Answer-$56,000 People who work hard, live below their means, and start saving early will likely become what? - Answer-Millionaires Walter Bagehot thought that it was whose job to hold the gold so that all the smaller ban...

Inflation can cause difficulty in many ways. Which group would have the greatest problem during periods of high inflation that last several years? - Answer-b.) Older people living on fixed retirement income Which of the following is true about sales taxes? - Answer-d.) It makes things more expens...

When is the best time to apply for a credit card? - Answer-when you have enough income to pay your debts How long will a chapter 7 bankruptcy usually remain on your credit report? - Answer-ten years Which of the following is the best key component of financial literacy? - Answer-being knowledg...

Economics is the study of how individuals and societies satisfy their unlimited wants with limited resources. a. True b. False - Answer-a. True When rising interest rates make borrowing more costly, how does it affect the business cycle? a. It causes consumers to consume more and increases...

The next best choice you could have made, but did not make. - Answer-Opportunity Cost Some opportunity costs for the Robinsons. - Answer-Having less time to relax, less time to go out to dinner, and less money to spend. Physical, intellectual, and creative talents of people. - Answer-Human res...

Credit Bureau - Answer-An organization that collects information about the financial and credit transactions of consumers. Annual Percentage Rate (APR) - Answer-cost of credit expressed as a yearly percentage Revolving Credit - Answer-credit that is automatically renewed as debts are paid of...

Which of the following is NOT a popular technique used in ads? a. repetition b. nostalgia c. fraud d. testimonial - Answer-c. fraud Which of the following is NOT a popular technique used in ads? a. emotion b. bandwagon c. statistics d. testimonial - Answer-d. alliteration Which of the ...

Consumer - Answer-A person or organization that uses a product or service Credit - Answer-The granting of a loan and the creation of debt; any form of deferred payment Debt - Answer-An obligation of repayment owed by one party (the debtor/borrower) to a second party (the creditor/lender); in m...

APR - Answer-Abbreviation for Annual Percentage Rate. The APR is basically the cost of credit, or how much you must pay to get a loan, on a yearly basis. The APR is expressed as a percentage, and it reflects the interest rate, as well other fees and charges. APRs can vary widely from one credit card...

What should you do with your bank statements? Select one or more: a. Keep them in a safe file for at least a year before shredding b. Review them to identify improvements you could make to your spending habits c. Throw them away as soon as you have examined them d. Shred them monthly e. R...

What is not the best way to solve your financial problems? spending less than you earn accumulating debt creating a budget earning money - Answer-Accumulating debt Understanding and implementing sound money-management principles contributes to which of the following? financial success stay...

Career Planning is done. - Answer-throughout a lifetime Who pays taxes? - Answer-Anyone who has property, buys goods, or has a job What are the three main types of taxes? - Answer-income, sales, property What is Social Security? - Answer-a federal insurance program that provides benefits to...

What are the three main credit reporting agencies? - Answer-Experian Transunion Equifax What is your credit score? - Answer-(Financial Grade): A calculated score that measures an individual's creditworthiness; two main types of credit scores are the FICO score and the Vantage score. ...

The process of determining a person's financial needs or goals for the future and how to achieve them and to pursue personal economic satisfaction. - Answer-Personal financial planning The final step of the financial planning process is to... - Answer-Evaluate and revise your actions This r...

Create a budget of current income and expenses. Money- Purpose of a budget. Rationale: When a person creates and follows a budget, it helps to control spending. - Answer-In order to get spending under control, a person should first. Of the power of compounding and appreciation Money- Compounding...

Which of the payment methods does NOT take money immediately from your checking account? A. Debit Card Purchase B. Overdraft fee C. ATM withdrawal D. Writing a check - Answer-D. Writing a check When you make a purchase with a credit card, you are ____ money from _____ . A. Taking; your savin...

FAFSA - Answer-Free Application for Federal Student Aid is the application used by the US Department of Education to determine a student's financial aid eligibility, and its known acronym is: Federal Unsubsidized Stafford Loan - Answer-Which federal loan type is not based on need and students ...

Amortization - Answer-Payment of a portion of the principle of a mortgage loan, reducing or amortizing the mortgage amount. Annual Percentage Rate - Answer-The total annual percentage amount it will cost a person to use credit. Asset - Answer-Any items of value that people own, including cash,...

Personal Finance - Answer-refers to all the financial decisions an individual or family must make in order to earn, budget, save and spend money. 6 Key Components of Financial Planning - Answer-1. Asses your FINANCIAL situation 2. Set money GOALS 3. Write a detailed PLAN 4. EXECUTE your plan ...

Financial Literacy - Answer-Basic financial knowledge, including an understanding of banks and the banking system, financial markets, credit and credit cards, and tax laws, as well as the ability to apply this knowledge in making decisions about how to spend, earn, or save money today to build wealt...

Applying skills related to money describes which of the following? - Answer-financial literacy Which of the following is NOT an example of being financially literate? - Answer-creating a budget Self-acceptance is an element of which level of Maslow's Hierarchy of needs? - Answer-self-actual...

Income - Answer-Any money that you receive Sources of income - Answer-Salary Allowance Money from your birthday Money from selling things Interest earned from a savings account Budget - Answer-A plan for managing your money during a given period of time. Expense - Answer-What you spend ...

Net income equals gross income minus - Answer-All payroll deductions including taxes withheld If you spend more than the net income you make in a month, you will have to - Answer-Any of the above Your financial institutions may already offer some budgeting tools. - Answer-My quarterly per capi...

statistically, what is the number one reason for declaring bankruptcy? - Answer-an uninsured catastrophic healthy program which items can help you when you categorize your expenses? - Answer--checkbook register -store receipts -monthly credit card statement -online checking account statement ...

What is the term of the loan? - Answer-How long you have to repay your loan. What is interest? - Answer-The fee you pay for borrowing money What is Principal? - Answer-The amount of money being borrowed What is the difference between a fixed and variable rate? - Answer-A fixed interest rate...

W-4 - Answer-A federal tax form filled out by an employee to indicate the amount that should be withheld from his/her paycheck for taxes. W-2 - Answer-A statement of an individual's annual wages and taxes provided by an employer that must be included with the employee's federal, state, and ...

60, 20, 10, 10 Rule - Answer-60% for Spending, 20% for Savings, 10% for Investing, 10% Charitable Contributions $1,000 - Answer-Minimum amount for an emergency/opportunity fund. First Priority of a Budget. 401K - Answer-Employers can allow employees to contribute from their salary on a post-ta...

True - Answer-True or False: True financial security is achieved when your money begins to generate an income- your money starts working for you False - Answer-True or False: The amount of money a profession brings should be your first priority in selection your career path True - Answer-True ...

A financial plan is created like a - Answer-blueprint for building a house A person increases his net worth by - Answer-increasing assets and decreasing liabilities A person has a house worth $100,000, a mortgage of $90,000, savings of %5,000, a car valued at $10,000, a $7,000 car loan, and $3...

What two factors count for 65% of your FICO score? a) Income and payment history b) Employment history and outstanding debts c) Payment history and outstanding debts d) Income and outstanding debts - Answer-c) Payment history and outstanding debts Which company has developed the MOST common...

What two factors count for 65% of your FICO score? - Answer-Payment history and outstanding debts Which company has developed the MOST commonly used credit score to evaluate an individual's credit? - Answer-Fair Isaac Corporation You should try to achieve a FICO score of at least ________ i...

401K - Answer-A qualified plan established by employers to which eligible employees may make salary deferral (salary reduction) contributions on a post-tax and/or pretax basis. Employers offering a 401(k) plan may make matching or non-elective contributions to the plan on behalf of eligible employee...

Values - Answer-Personal and based on a person's beliefs, they also influence spending habits SMART goals - Answer-Specific, Measurable, Attainable, Realistic, Timely Short Term Goals - Answer-Less than one year (grades, save money for a small item) Long Term Goals - Answer-More than one...

The current value in today's money is called a? - Answer-Present value calculation By the rule of 72, how much would I be required to invest in now to have $2,000 in 28 years if I earn 8%? - Answer-72/8 = 9 years; half is to $1,000, then half $1,000 to get $500. (It doubles twice: 500 x 2 = 1,...

William carefully looked over a _____ before he signed it, and then moved into his new apartment. - Answer-lease Doug's printing business had a revenue of $6,000 and operating costs of $4,000. How much profit did his business make? - Answer-$6,000 - $4,000 = $2,000 What is FALSE about finan...

Randy earns $22 per hour. This is an example of: - Answer-Wages What is a credit score? - Answer-A number that represents the risk a lender takes on a borrower. Phil Reagan has written a check to USA Electronics for $152.65. Is this check filled out correctly? - Answer-No An account that al...

When calculating the cost of fuel per month, what factors are used? - Answer-Miles Driven, Miles per Gallon, Cost of Fuel Repairs and upkeep on a home usually range from _____________ per year in costs? - Answer-1%-3% The material basis of well-being is called what? - Answer-Standard of Living...