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A high school senior who is saving for the prom is invited to go on a weekend trip friends. the senior student chose not to go on the trip. what is the opportunity cost?
- correct answer the weekend trip A person can set up an individual retirement account (IRA) at a - correct answer bank A person has two credit cards. when fails to make a payment on one credit card, the second credit card company - correct answer cannot raise the APR automatically Negative information on a credit report will - correct answer be on the credit report for seven years Investors willing to accept high risk are - correct answer risk-tolerant Jose and maria have a son who is 5 years old. they won the lottery and plan to invest the money for their son's college education. which of the following choices is likely to generate the most return in the years before he goes to college? - correct answer stocks A person is planning to buy a $200,000 house. the person estimates that he will need at least a 20% down payment and $5,000 for moving expenses.how much money does the person need? - correct answer 45, Taxes on a traditional individual retirement account are paid - correct answer yearly, on the amount of money withdrawn from the account when a person's savings in a bank account are earning 2% interest and inflation is 5%, the purchasing power of the person's saving is - correct answer decreasing because of inflation
A person has three credit cards with very large outstanding balances and is unable to make payments on any of them. which is the first action this person should take?
- correct answer notify the credit card companies in order to negotiate a new payment plan. if a person has to pay $30 a year in intrest on each $100 he borrows, the cost is considered - correct answer very high A credit card grace period is the period of time the credit card company gives to the cardholder - correct answer from the billing date to the payment due date to make a payment to avoid a late fee Based on the credit card act of 2009, credit card companies cannot - correct answer mail credit card offers to someone under age 21 which type of investment is best protected from an increase in inflation - correct answer a house financed with a fixed-interest-rate mortgage. Dollar cost averaging is used for investing in - correct answer stocks which of the following is a correct explanation of the word given - correct answer Bear market: the price of stocks continue to decline over a period of time A factor that is likely to affect the market price of a stock is the - correct answer decline in corporation profits A person has $600,00 invested in stocks and bonds with a securities investor protection corporation (SIPC) member brokerage firm that fails. how much of the account is protected - correct answer up to $500,00 of the investor's account one of the Federal Reserve System (Fed) functions is to - correct answer promote stability of the financial system
not cover all of the loan balance; the creditor got a court order to require her employer to withhold part of her wages to pay the balance due. The court order is called a - correct answer garnishment A college senior has a $50,000 student loan. He earned $2,000 last year. He has no savings so he charged a $5,000 vacation on his credit card. The use of credit could be described as - correct answer irresponsible because he does not have sufficient income to repay debt The major DISADVANTAGE of using a debit card at a nonbank ATM is - correct answer transaction fees Before a person borrows money from a bank to make a major purchase, which question is most important for the person to answer - correct answer How much interest will be paid over the life of the loan increasing the real cost of the item Negative information on a credit report will - correct answer be on the credit report for seven years A true statement about over-the-limit fees is that they - correct answer cannot be charged without the credit cardholder's permission A person can use a credit card to make purchases when the - correct answer amount owed on the card is lower than the line of credit Students applying for financial aid attend college usually need to - correct answer complete a Free Application for Federal Student Aid (FAFSA) form People who most likely borrow from consumer finance companies are those who are
- correct answer consumers with low credit scores unable to secure a bank loan A married couple are both working. They have too much debt and cannot pay their monthly bills. They filed with bankruptcy court to extend the time to repay what they owe and manage their paying monthly living expenses. This process is called - correct answer chapter 13 bankruptcy
who is legally responsible for the accuracy of information on a person's credit file - correct answer The credit reporting agency Based on the Credit CARD Act of 2009, credit card companies CANNOT - correct answer mail card offers to someone under age 21 A single, 28-year-old person, with no assets, has a credit card with a $1,500 balance due. She dies in a car accident. Who is responsible for paying the $1,500 to the credit card company - correct answer nobody A person left his job at First Bank and now employed by XYZ Company. He plans to move the money from his 401(k) account at First Bank to the XYZ Company's Retirement plan without paying a tax penalty. This process is called - correct answer rollover A person who worked for 5 years has a 401(k) retirement plan. What is the wise thing to do with his 401(k) when he moves to another job at a different company - correct answer Transfer (rollover) the account balance to an Individual Retirement Account (IRA) A financially wise consumer will usually take which of these actions - correct answer Check prices from a variety of sources Consumers can buy money orders from a local - correct answer post office or drug store The primary source of income for people between 20 and 62 years old are - correct answer salary earned and interest on savings A single person who graduated form college is now employed full time. During the first year, it is highly recommended that this focus on - correct answer establishing an emergency fund All of the following are function of the Federal Reserve System (Fed) EXCEPT to - correct answer advise on investment strategies
what is the approximate annual finance charge for each $100 owned on a credit card with a 16% annual percentage rate (APR) - correct answer $16. How can a person AVOID becoming a victim of identity theft - correct answer Refusing to give his Social Security number on a phone call that he did not make himself Garaging a car and installing a security alarm are strategies that will - correct answer reduce the cost of car insurance A person's truck is damaged by hit-and-run driver. How will he receive payments for repairing his truck - correct answer Uninsured or no-fault motorist coverage when a person needs health care, she goes to he doctor. She is charged a co-pay. What type of health insurance does she have - correct answer Managed care HMO health insurance When an investor wants to sell her shares of stock at a profit, the investor needs to be aware of - correct answer capital gains taxes and broker fees that will need to be paid A factor that is likely to affect the market price of a stock is the - correct answer decline in corporation profits which of the following individuals is most likely to be approved for a $5,000 bank loan - correct answer A college graduate earning $55,000 with loans totaling $10,000 and a history of making payments on time. which federal government agency regulates advertising on buses - correct answer Federal Trade commission (FTC) Taxes on a Traditional Individual Retirement account (Traditional IRA) are paid - correct answer yearly, on the amount of money withdrawn from the account
which form of check endorsement is NOT recommended - correct answer blank endorsement A person deposit a $200 check form his sister into his checking account when that money be available for him to withdraw from his account - correct answer Generally, within one to three days after the check is deposited checking account overdraft protection at a bank is an optional service that is - correct answer a short-term loan with a high rate of interest A person asks if checking account pay interest. what is the correct response - correct answer some checking account pay interest Before a person borrows money form a bank to make a major purchase, which question is most important for the person to answer - correct answer How much interest will be paid over the life of the loan increasing the real cost of the item credit card companies are allowed to - correct answer decrease credit limits without giving advance notice A person receives a credit card bill of $1,000 with a minimum payment due of $250. The person sends the company a check for $100 before the due date. As a result, the credit card company will - correct answer charge a late fee on the account A person signed an installment credit agreement to buy furniture. When does the person own the furniture - correct answer After the last payment on the furniture has been made The price paid to a lender for borrowing money is called the - correct answer finance charge What is the advantage of an adjustable-rate mortgage (ARM) - correct answer Monthly payments may be lower than other mortgages
which is a good example of being a wise consumer - correct answer using discount coupons when shopping The time to begin retirement planning is when a person - correct answer begins to earn taxable income which of the following financial careers are based only on commission - correct answer Insurance brokers A person received a total of $100 in dividends from his stocks this year. This income must be reported to the - correct answer Internal Revenue Service (IRS) The Federal Reserve System (Fed) can help stimulate the economy by - correct answer influencing a decrease in interest rates A consumer can shop for a mortgage loan at all of the following EXCEPT a - correct answer real estate agent People use an Electronic Funds Transfer (EFT) service because it is a/an - correct answer convenient and secure way to move money what is the best strategy to use when buying a new car - correct answer negotiate the price It is wise for an employed person to have money automatically deposited into her savings account each month or pay period because this insure that she will - correct answer have money for a "rainy day" All of the following are examples of benefits EXCEPT - correct answer opportunities for advancement which of these sayings explains why it is good to deposit money in a savings account - correct answer "A dollar today is worth more than a dollar tomorrow"
Justin decided to spend $40 treating his friends to dinner and a movie instead of going to a high school basketball game. The opportunity cost for Justin is - correct answer attending the basketball game A person needs to know that the standard of living during retirement years can be seriously affected by a change in - correct answer the rate of inflation An example of a long-term financial goal would be - correct answer buying a home Which of the following choices lists assets from MOST to LEAST liquid - correct answer savings account, certificate of deposit (CD), real estate A strategy to reduce future payments on a federal college loan is to - correct answer consider getting a job in a career that qualifies for loan reduction if a person loses a debit or ATM card, and the card is used by someone else, the person who - correct answer finds the card may withdraw money from the account which of the bank products listed below will generally earn the most interest - correct answer A certificate of deposit All of the following activities should be recorded in the checkbook register to ensure that the checking account balance on the checkbook register is accurate EXCEPT for
- correct answer dividends earned from securities Banks and credit unions may use money deposited in customer accounts to - correct answer offer different kinds of loans to customers when applying for a loan, borrowers usually need to provide information regarding their - correct answer assets
A statement that is always true about credit card fees and interest rates is that - correct answer a person with a poor credit history can be charged a higher interest rate The possibility that a borrower will fail repay a loan on time and will not be able to repay the loan is known as the - correct answer credit risk A person has several open department store charge cards she has not used in two years. there are no credit balances on these accounts. these charge cards may impact her application for a loan because they - correct answer are open account which could be considered by a lender reviewing an application for credit The price paid to a lender for borrowing money is called the - correct answer finance charge A person purchased a $50,000 term life insurance policy. the $50,000 amount of coverage is called the - correct answer face value once a claim is paid by the insurance company for car damage due to an accident that was caused by the insured policyholder, the insured person can usually expect that - correct answer premiums will be increased A replacement value renters insurance policy is more expensive than a regular renters insurance policy because it - correct answer reimburses today's current value of the property damaged or stolen when there is a steady decline in stock prices over a period of time, it is known as a
- correct answer bear market which of the following is an investment product - correct answer money market mutual fund some people invest in collectibles such as paintings and coins as strategy to accumulate wealth because - correct answer their limited availability is likely to increase its value
which investment would a person choose today if she believes that interest rates will rise - correct answer A short-term bond Term life insurance is usually the least expensive type of life insurance because it - correct answer only covers the insured person for a limited number of years one reason states pass laws that mandate all car owner to have car insurance is that states want to - correct answer protect drivers from financial loss A person with health insurance received a $300 medical bill. the insurance company will not consider paying a claim unless the - correct answer deductible has been paid The lowest health insurance premium is paid by a person who - correct answer exercises and is a nonsmoker A person who owns a stock in a company has a divided reinvestment plan and the person chose to reinvest his dividends earned and not take the dividend payment in the form of cash. Therefore, the amount of the dividends will go toward buying - correct answer more shares of the same stock common stock is also known as - correct answer equities An oil company tanker hit another ship causing a major oil spill that will destroy the environment in the area for years and will cost billions to cleanup. The price of the company's stock is most likely to - correct answer decrease An investment portfolio is a collection of - correct answer investments owned by an investor one role of the securities and exchange commission (SEC) is to - correct answer protect the investors
An example of lone-term goal for 28-year-old person is to - correct answer save over six years for a $5,000 down payment on a boat A prepaid cash card is a card that - correct answer can be obtained without a bank account If a person does NOT have personal financial goals, then he will NOT be able to - correct answer think of steps to take for financial security or wellness A person takes a job that offers a 5% matching contribution to a 401(k) plan. this means that for every dollar the employee contributes to the 401(k), the employer will - correct answer match each dollar contributed up to 5% of the employee's salary consumers can buy money orders from a local - correct answer post office or drug store A person has a checking account that charges the following fee: a $10 monthly service fee, a $o.20 fee for each check written, and a $35 fee per check returned because of insufficient funds. During September, this person wrote 10 checks and bounced one check for insufficient funds. how much are the total fees charged to the checking account for September - correct answer $ when going to most consumer credit counseling services (CCCS), the person can expect to be charged - correct answer a fee for setting up and overseeing a debt repayment plan A person has three credit cards and makes regular payments on the two account charging the lowest interest rates. no payment is made on the balance due for the third credit card. as a result - correct answer the card company not being paid can raise its APR after giving a 45-day notice consumer finance companies that specialize giving loans to people with poor credit scores are also known as - correct answer small loan companies
which of the following statements is true - correct answer the more a person owns, the less he is worth if a person pays off her car loan today, how long will that loan appear on her credit report - correct answer seven years from when she made her last payment on the loan what is a DISADVANTAGE of declaring personal bankruptcy - correct answer it is information that is on a person's credit report for seven years A credit card grace period is the period of time the credit card company gives to the cardholder - correct answer from the billing date to the payment due date to make a payment to avoid a late fee A person has a hospital bill of $10,500. this person's insurance has a $ deductible and required the insured policy holder to pay 20% of the balance of the bill. in total, with the deductible, how much of this bill will the person have to pay - correct answer $2, the parents of a college student have a homeowner insurance policy. this policy will most likely cover the college student's - correct answer personal property stolen while living in a college campus dormitory A person is shopping for homeowner insurance. he learns that all of the policies he looked at limit the coverage on jewelry and electronic equipment to $500. how can he get coverage to replace lost or stolen jewelry and electronic equipment on his homeowners policy - correct answer by buying a separate rider on his homeowner's policy to cover the replacement value of personal property the cash value on a whole life insurance policy is - correct answer the savings portion of the policy A person has a health insurance plan with a $50 co-pay. this $50 payment is the - correct answer amount paid to the doctor at each visit
