Personal Finance Exam Review Part One (Fill-In-The-Blank On Test)

Front 1

A large sum of cash you pay up front when you purchase a home is called a(n)

Back 1

down payment.

Front 2

Cash allowances awarded to students to help pay education costs are called

Back 2

scholarships.

Front 3

Loan consoldiation

Back 3

means that all of an individual's student loans are combined into one large loan, resulting in monthly payment.

Front 4

Grants

Back 4

are forms of educational funding that do not have to be repaid and usually do not require students to maintain certain standards.

Front 5

The amount of money you deposit into a savings account is called the

Back 5

principal.

Front 6

Credit unions

Back 6

are not-for-profit organizations established by groups of people who pool their money.

Front 7

A(n) brokerage firm

Back 7

is a company that buys and sells different types of stocks and bonds.

Front 8

Liquidity

Back 8

is a measure of how quickly you can get your cash without loss of value.

Front 9

The date on which an investment becomes due for payment is the

Back 9

maturity date.

Front 10

Safety of principal

Back 10

means that you are guaranteed not to loose your savings deposit, even if the bank or other financial institution fails and goes out of business.

Front 11

The general rise of prices is called

Back 11

inflation.

Front 12

The Rule of 72 is a technique for estimating the number of years required to

Back 12

double your money at a given rate of return.

Front 13

A collection of investments is called a(n)

Back 13

portfolio.

Front 14

Speculative investing

Back 14

happens when you make bold and high-risk investment choices.

Front 15

The spreading of risk among many types of investment is called

Back 15

diversification.

Front 16

Property risk

Back 16

is associated with owning the stock of just one organization.

Front 17

The chance that inflation will rise faster than the return on your investment is called

Back 17

interest rate risk.

Front 18

A mutual fund

Back 18

is the pooling of money from many investors to buy a large selection of securities.

Front 19

Penny stocks

Back 19

are low-priced stocks of small companies that have no track record.

Front 20

Dividends

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are money paid to stockholders from the corporation's earnings.

Front 21

A type of stock that pays a fixed dividend but has no voting rights is a

Back 21

preferred stock.

Front 22

A proxy

Back 22

is a stockholder's written authorization to transfer his or her voting rights to someone else.

Front 23

Growth stocks

Back 23

are stocks in corporations that reinvest their profits into the business so it can grow.

Front 24

The par value

Back 24

of a stock is an assigned dollar value given to each share of stock.

Front 25

A stock index

Back 25

is a benchmark that investors use to judge the performances of their investments.

Front 26

When securities are bought and sold through brokers but not through a stock exchange, the transaction is

Back 26

over-the-counter (OTC)

Front 27

A bull market

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is a prolonged period of rising stock prices and a general feeling of investor optimism.

Front 28

Short selling

Back 28

is selling stock borrowed from a broker that must be replaced at a later time.

Front 29

A stock split

Back 29

is an increase in the number of outstanding shares of a company's stock.

Front 30

The use of someone else's money, borrowed now with the agreement to pay it back later, is called

Back 30

credit.

Front 31

A person who borrows money from another is called a(n)

Back 31

debtor.

Front 32

A creditor

Back 32

is a person or business that loans money to others.

Front 33

Capital

Back 33

is the value of property you possess after deducting your debts.

Front 34

Property pledged to assure repayment of a loan is called

Back 34

collateral.

Front 35

With a secured loan,

Back 35

the good you purchase with the loan serves as collateral for the money located.

Front 36

With open-end credit,

Back 36

a borrower can use credit up to a stated limit.

Front 37

The grace period

Back 37

is a timeframe within which you may pay your current credit balance in full and incur no credit charges.

Front 38

A finance company

Back 38

is an organization that makes high-risk consumer loans.

Front 39

A usury law

Back 39

is a state law that sets a maximum interest rate that may be charged for consumer loans.

Front 40

An annual report

Back 40

is a summary of a corporation's financial results for the year and its prospects for the future.