Personal Finance Fundamentals, Exams of Nursing

Download Personal Finance Fundamentals and more Exams Nursing in PDF only on Docsity! THE ULTIMATE WISE TEST REVIEW The cost of borrowing money is referred to as - correct answer ✔✔interest The maximum amount you are allowed to carry as a balance on the card - correct answer ✔✔credit limit This is a fee that some, but not all, credit card issuers charge to use their credit card. - correct answer ✔✔Annual Fee The amount you must pay on a credit card, based on a percentage of the outstanding balance. - correct answer ✔✔Minimum payment A danger of using a credit card - correct answer ✔✔leads to overspending To build a good credit history, you should - correct answer ✔✔pay on time and as much of your balance as possible What does APR stand for? - correct answer ✔✔Annual Percentage Rate What financial habits determine your credit score? - correct answer ✔✔All of these are correct 1) Payment History & Amount you owe 2) Length of credit history & Amount of new credit applied for recently 3) Types of credit open What are the three major Credit Reporting Agencies (CRAs)? - correct answer ✔✔Equifax, TransUnion, and Experian What debt cannot be removed by declaring bankruptcy? - correct answer ✔✔child support Which category makes up the largest percentage of your credit score? - correct answer ✔✔Payment history This account allows you to deposit money at a bank for safekeeping. - correct answer ✔✔savings account This account allows you to withdraw money, pay a bill, or make purchases easily. - correct answer ✔✔Checking account This allows you to withdraw cash from your account or make payments electronically. - correct answer ✔✔Debit card The action enters money into an account. - correct answer ✔✔deposit What is not a reason to SAVE money. - correct answer ✔✔So you can loan it to your friends If you lose a check and want to prevent someone else from using it, you can issue this type of order to the bank. - correct answer ✔✔stop payment A line of credit for checks your account can't cover. - correct answer ✔✔overdraft protection Money taken out of your checking account. - correct answer ✔✔withdrawal What does it mean to reconcile your checkbook? - correct answer ✔✔At the end of the month you check to see if your check register matches your bank statement. An asset that can be easily converted to cash is - correct answer ✔✔liquid assets A man budgeted $200 a month for clothing. This month the man spent $150 on clothing therefore that budget item is considered to have - correct answer ✔✔a budget variance. Which of the following should you take into consideration when deciding to buy or lease a car? - correct answer ✔✔1) Cost of the car 2) Monthly loan payment 3) Your monthly budget 4) Down payment 5) Your current savings Central Bank of the U.S.; regulates Monetary Policy - correct answer ✔✔Federal Reserve Insurance coverage that would cover claims unrelated to an accident (you hit a deer, bad weather damages your car, your car is stolen, etc) - correct answer ✔✔comprehensive A type of insurance policy that covers property that is easily movable and provides additional coverage over what normal insurance policies do not. This can cover anything from jewelry to expensive stereo equipment - correct answer ✔✔floater insurance Using someone else's money, promising to repay at a future date, and paying a fee for use of the money, is the definition for: - correct answer ✔✔credit When a self-employed person decides to purchase disability insurance it is generally to protect against the - correct answer ✔✔financial effects of not being able to work. ________ is a tax used to fund the Social Security system - correct answer ✔✔FICA Tax Pat has a savings account and a car loan from a not-for-profit financial institution owned by its members. She is probably a member of what type of financial institution? - correct answer ✔✔Credit Union The ________ is designed to make sure you have all of the information you need to make a healthy decision about borrowing money. - correct answer ✔✔Truth In Lending Act Troy has $50 a month transferred electronically from his checking account to his savings account. This is an example of: - correct answer ✔✔Savings plan What form do you complete upon being hired - correct answer ✔✔W-4 Property Tax is tax paid on? - correct answer ✔✔Building, Land, Vehicles The form given to you from your employer to help you fill out your taxes? - correct answer ✔✔W-2 The tax form that for those that make less than $100,000 and claim no deductions. - correct answer ✔✔1040EZ Employment Eligibility Verification Form required by the Immigration and Naturalization Services (INS) to verify your identity and your eligibility to work; filled out before you begin working - correct answer ✔✔i-9 What are the two types of depository institutions? - correct answer ✔✔Credit Unions and Banks Why is it important to create a budget? - correct answer ✔✔Helps you plan how you are going to spend your money Credit scores can range from: - correct answer ✔✔300-850 Amount of money originally borrowed - correct answer ✔✔principal This type of interest "creates a mathematical explosion," and it can make you wealthy over time, or keep you in debt for a long time. - correct answer ✔✔compound interest 401(k), IRA, and Roth IRA are all examples of a __________ account. - correct answer ✔✔Retirement account Because mutual funds spread your investment around in multiple stocks and bonds, they are a great example of this term - correct answer ✔✔diversification The basic concept of credit is: - correct answer ✔✔Buy now, pay later Which financial product can you buy for $25, is safe, and will be worth $50 at a future date? - correct answer ✔✔Series EE savings bond Example of a secured loan - correct answer ✔✔car loan Example of unsecured loan - correct answer ✔✔credit card A person has three credit cards with very large outstanding balances and is unable to make payments on any of them. Which action should the person take? - correct answer ✔✔Notify the credit card companies in order to negotiate a new payment plan. A person buys a flat screen, plasma, theater-like television. The person has homeowner's insurance. Why would it be appropriate to add a personal property floater to that insurance? - correct answer ✔✔To cover the cost of replacement should the television get damaged or stolen. A woman has just received a very expensive piece of jewelry. The woman has homeowner's insurance. Which statement would it be most appropriate for her to make to her insurance agent? 1) "I think I need a personal property floater." 2) "I need a liability claim" 3) "I need a high deductible" 4) "I need to determine my net worth" - correct answer ✔✔"I think I need a personal property floater." Sally's health insurance policy requires her to pay the first $500 of medical costs each year before the company will pay any of her medical bills. This policy provision is the: - correct answer ✔✔Annual deductible