Personal Finance Final

Front 1

Your Credit Report includes information regarding your salary level and savings account balances

Back 1

False

Front 2

If you find an error in your credit file, there is little you can do about it since the information did not originate with you.

Back 2

False

Front 3

Information which will likely impact negatively on your credit report includes late payments, accounts turned over to collection, judgements, liens, and bankruptcies.

Back 3

True

Front 4

A credit score is a number that indicates how likely you are to pay on a loan or credit card as agreed.

Back 4

True

Front 5

In the article A Breadwinner's Tale, the author's father was not aware that he owed money on credit cards

Back 5

False

Front 6

In the article A Breadwinner's Tale, the author's father incurred debt to:

Back 6

Support a standard of living well above his income level.

Front 7

In the article A breadwinner's Tale, the author responded to his father's predicament by:

Back 7

Trying to get his dad to communicate the debt problem as the first step in possibly resolving it.

Front 8

The best FICO Score to have is:

Back 8

850

Front 9

The key determinate of your fico score, accounting for 35% of the total number is:

Back 9

Whether you've paid your bills on time.

Front 10

The air credit reporting act gives ________________ the authority to enforce its provisions.

Back 10

federal trade commission, federal reserve board, federal deposit insurance corporation.

Front 11

A major purpose of personal financial planning is future economic security.

Back 11

True

Front 12

Personal financial planning starts by creating a plan of action

Back 12

False

Front 13

Inflation reduces the buying power of a dollar.

Back 13

True

Front 14

Savings and investment programs are the main method for achieving financial goals.

Back 14

True

Front 15

A financial plan is a list of a family's spending for the next month.

Back 15

False

Front 16

Opportunity cost refers to

Back 16

trade-offs when a decision is made.

Front 17

The final step in the financial planning process is to

Back 17

evaluate and revise your actions

Front 18

Financial goals should

Back 18

be realistic, be stated in specific, measurable terms, have a time orientation.

Front 19

Career planning is the part of the ___________ component of financial planning.

Back 19

obtaining

Front 20

Financial strategies refer to

Back 20

courses of action to achieve financial goals

Front 21

Education level is a major influence on a person's potential earning power

Back 21

True

Front 22

Aptitude tests measure a person's interests related to different types of work.

Back 22

False

Front 23

An informational interview has the purpose of obtaining employment in a specific job position

Back 23

False

Front 24

A chronological resume is most appropriate for individuals with a continuous school and work record leading to a specific career area.

Back 24

True

Front 25

The purpose of a screening interview is to reduce the number of candidates for a job to a workable number

Back 25

True

Front 26

An interest inventory is designed to measure

Back 26

the most satisfying job activities

Front 27

An example of a social influence on career opportunities would be

Back 27

longer life expectancy

Front 28

Networking refers to

Back 28

the process of making and using contacts for career development

Front 29

Cafeteria-style employee benefits means

Back 29

allowing the employee flexible selection among a variety of potential employee benefits

Front 30

A ___________________ interview is designed to judge the potential of final candidates for a job position.

Back 30

selection

Front 31

Most financial records should be kept in a safe-deposit box.

Back 31

False

Front 32

A personal balance sheet reports the financial position of a person or family on a given date.

Back 32

True

Front 33

Assets represent amounts owed to others that must be paid within the next year

Back 33

False

Front 34

Spending less than your income will increase net worth

Back 34

True

Front 35

A budget deficit exists when actual spending exceeds projected spending

Back 35

True

Front 36

A __________ is a specific plan for spending

Back 36

budget

Front 37

An example of liquid asset would be

Back 37

a checking account

Front 38

_______________ represents amounts owed to others.

Back 38

Liabilities

Front 39

Definite financial obligations are referred to as

Back 39

fixed expenses

Front 40

Real estate property tax is based on the appraised value of the property

Back 40

True

Front 41

Taxable income refers to the amount deducted from a person's pay

Back 41

False

Front 42

A deduction is an amount subtracted from gross income to arrive at taxable income

Back 42

True

Front 43

Most people mail the full amount owed in federal income tax each April

Back 43

False

Front 44

Enrolled agents are IRS auditors who visit people's homes to verify deductions

Back 44

False

Front 45

________ is fully deductible as an itemized deduction

Back 45

Mortgage interest

Front 46

The difference between the standard deduction and itemized deduction is

Back 46

The standard deduction is a set amount which the taxpayer may deduct from adjusted gross income. Itemized deductions are specific expenses which the taxpayer may identify and deduct from adjusted gross income. The taxpayer may choose the standard deduction or to itemized deductions.

Front 47

A significant tax strategy to reduce current Federal income taxes include

Back 47

contributing to a retirement plan IRA

Front 48

When an IRS agent visits your home or office to verify tax records, this is referred to as an

Back 48

Field audit

Front 49

An example of tax-exempt income is

Back 49

interest from municipal bonds

Front 50

A quick source of cash is to liquidate savings

Back 50

True

Front 51

Demand deposits refer to money deposited in savings accounts

Back 51

False

Front 52

A credit union usually offers a wider range of financial services than a commercial bank

Back 52

False

Front 53

A savings account with daily compounding will have higher earnings than an account with quarterly compounding

Back 53

True

Front 54

A CD account is a checking account that earns interest

Back 54

False

Front 55

The fewest financial services would probably be offered by an

Back 55

investment company

Front 56

The rate of return on a savings account may also be referred to as

Back 56

yield

Front 57

the savings plan that is likely to have a set rate of return is a

Back 57

certificate of deposit

Front 58

A personal check with guaranteed payment is a

Back 58

certified check

Front 59

A ___________ endorsement is most useful when depositing checks by mail

Back 59

restrictive

Front 60

Credit encourages overspending and ties up future income

Back 60

True

Front 61

With open-end credit, the borrower pays back a onetime loan in a specified period of time and with a specified number of payments

Back 61

False

Front 62

With closed-end credit, the borrower is permitted to take loans on a continuous basis and is billed for partial payments

Back 62

False

Front 63

Two general rules of thumb for measuring credit capacity are the debt payments-to-income ratio and debt-to-equity ratio.

Back 63

True

Front 64

Creditors determine credit worthiness on the basis of character, capacity, capital, collateral, and conditions.

Back 64

True

Front 65

An example of closed-end credit is

Back 65

installment sales credit

Front 66

An example of open-end credit is

Back 66

revolving check credit

Front 67

Which one of the following is not one of the five C's of credit

Back 67

Climate (conditions, character, capacity)

Front 68

Most of the information in your credit file may be reported for only ____________ years.

Back 68

7

Front 69

If you are asked to cosign on a loan, be aware that

Back 69

as many as 3 out of 4 cosigners are asked to repay the loan, your liability for this loan may keep you from getting other credit, you could lose any property you have pledged

Front 70

Parents or family members are often the source of the least expensive loans

Back 70

True

Front 71

The consumer finance companies specialize in personal installment loans and second mortgages

Back 71

True

Front 72

The finance charge is the total dollar amount paid to use credit

Back 72

True

Front 73

The most basic method of calculating interest is the simple interest formula. It is the interest computed on principal only and without compounding

Back 73

True

Front 74

The federal trade commission enforces the fair debt collection practices act.

Back 74

True

Front 75

The best method of comparing credit cost is the

Back 75

finance charge and the APR

Front 76

Which consumer credit source has been viewed historically as a lender of last resort

Back 76

finance company

Front 77

You can obtain medium-priced loans from

Back 77

commercial banks and credit unions

Front 78

Some creditors add finance charges after subtracting payments made during the billing period, this is called the

Back 78

Adjusted balance method

Front 79

A consumer credit counseling service is a

Back 79

Local, nonprofit organization affiliated with the National Foundation for Consumer Credit

Front 80

The first phase in a purchasing decision is preshopping activities, which include defining shopping problem and planning your course of action

Back 80

True

Front 81

Consumer information from businesses is usually the most objective type of data available to help in a buying decision

Back 81

False

Front 82

Brand name products usually cost more than store brands or generics

Back 82

True

Front 83

An express warranty is usually in a written form

Back 83

True

Front 84

Most consumer complaints are resolved with the use of a government agency

Back 84

False

Front 85

_______ would be an example of a social buying influence

Back 85

Lifestyle

Front 86

The least objective type of consumer information is likely to be from a

Back 86

sales brochure

Front 87

The widest variety of products is usually available at a

Back 87

department store

Front 88

A nonprofit organization created to save money for its members-owners when buying certain products or services is a

Back 88

cooperative

Front 89

_____________ are publicly supported community law offices that provide legal assistance to consumers who cannot afford their own attorney

Back 89

legal aid societies

Front 90

The ground rules for retirement planning are rapidly changing

Back 90

True

Front 91

Due to pension and social security , most people do not suffer any decline in income after retirement

Back 91

FALSE

Front 92

Social security is the most widely used source of retirement income

Back 92

True

Front 93

At age 65 what is an average life expectancy of a woman

Back 93

19 years

Front 94

what is considered the "point of no return" in preparing a comprehensive retirement plan

Back 94

45

Front 95

The first step in retirement planning is to

Back 95

analyze your assets and liabilities

Front 96

Under what retirement plan does your employer make nontaxable contributions to the plan for your benefit and reduce your salary by the same amount

Back 96

401(K)

Front 97

In what type of annuity is the money you pay invested in common stocks or other equities, and the income you receive dependent on the investment results

Back 97

variable annuity

Front 98

which of the following investments have the greatest potential for risk

Back 98

options

Front 99

the holding period for short term capital gain is 12 months or less

Back 99

true