Personal Finance Exam Review Part Two (Multiple Choice On Test)

Front 1

Home ownership would be considered a

Back 1

long-term need.

Front 2

A typical down payment for a loan is about

Back 2

10 to 20 percent of the purchase price.

Front 3

Government student loans

Back 3

usually do not require payments until after graduation.

Front 4

Work-study programs allow students to earn money by working

Back 4

on campus.

Front 5

Interest paid on the original principal plus accumulated interest is called

Back 5

compound interest.

Front 6

The widest variety of banking services is provided at a

Back 6

commercial bank.

Front 7

A savings and loan association

Back 7

is organized primarily to lend money for home mortgages.

Front 8

Savings and checking accounts at a credit union are called

Back 8

share accounts.

Front 9

Savings accounts protected by the FDIC are protected from loss up to

Back 9

$250,000.

Front 10

You can authorize your employer to make automatic deductions from your paycheck each period with a(n)

Back 10

payroll savings plan.

Front 11

The use of long-term savings to earn a financial reward is called

Back 11

investing.

Front 12

According to the Rule of 72, if an investment of $5,000 is yield an average of 6 percent, it will take

Back 12

12 years for that investment to be worth $10,000.

Front 13

A put-and-take account is

Back 13

typically the first stage of investing.

Front 14

Maximization of return in the next five to ten years is the goal of

Back 14

strategic investing.

Front 15

A type of risk that is caused by the business cycle is

Back 15

market risk.

Front 16

Making your decisions quickly to take advantage of the market

Back 16

is not a wise investment practice.

Front 17

A daily newspaper that provides detailed coverage of the business and financial world is

Back 17

The Wall Street Journal.

Front 18

Professional investment planners who are trained to give investment advice based on your goals, age, lifestyle, and other factors are called

Back 18

certified financial planners.

Front 19

A corporate bond

Back 19

would be considered the lowest risk investment.

Front 20

The right, but not the obligation, to buy or sell a commodity or stock for a specified price within a specified time period is called a(n)

Back 20

option.

Front 21

50 shares

Back 21

would be considered an odd lot of stocks.

Front 22

An increase in the value of a stock over time is called a(n)

Back 22

capital gain.

Front 23

A common stock

Back 23

allows stockholders to influence corporate policy.

Front 24

Stocks in young, often small corporations that have higher overall risk than stocks of successful, long-established companies are called

Back 24

emerging stocks.

Front 25

The price for which a stock is bought and sold in the marketplace is called the

Back 25

market value.

Front 26

Current Profit on Stock/Purchase Price + Commission =

Back 26

Return on Investment

Front 27

NASDAQ

Back 27

is not a securities exchange.

Front 28

Buying on margin is an investment technique

Back 28

that would more likely be used by a day trader.

Front 29

Using dividends previously earned on a stock to buy more shares is called

Back 29

dividend reinvestment.

Front 30

The price of a share of stock divided by the corporation's earnings over the past 12 months is the

Back 30

P/E ratio.

Front 31

The need for credit arose in the United States with the dawn of the

Back 31

Industrial Revolution.

Front 32

Reserving a hotel toom

Back 32

would most likely be difficult without a credit card.

Front 33

Tammi withdraws money from the bank to pay for a stereo. She obtains a loan. What is she?

Back 33

Tammi is a debtor.

Front 34

Your financial position is based on your

Back 34

capital.

Front 35

The total dollar amount of all interest and fees you pay for the use of credit is called the

Back 35

finance charge.

Front 36

A service available to charge customers whereby purchases are not billed until much later than the standard billing time is called

Back 36

deferred billing.

Front 37

One difference between a charge card and a credit card is that

Back 37

the full balance on a charge card must be paid each month.

Front 38

If you go over your credit limit or make your payment late, you will likely be charged a(n)

Back 38

penalty fee.

Front 39

A furniture store

Back 39

is least likely to offer service credit.

Front 40

A legal business that makes high-interest loans based on the value of personal possessions is called a

Back 40

pawnbroker.