Personal Finance Final Exam

obtain one’s goals A financial plan is designed to
Cash flow, Balance sheet The two most useful financial statements are ____ and ___.​
Assets, Liabilities, and equity A balance sheet includes ____, ____, and ____.​
Balance sheet Which of the following provides information about a person’s financial condition at a specific point in time?​
income and expense A cash-flow statement is also known as a(n) ____ statement.​
Balace sheet Rita and Jose Hernandez want to assess their financial progress over the next few years. They have decided to take a reading of their status every New Year’s Day. Which financial statement would they prepare each year?​
Monetary Which of the following types of assets is primarily used for emergencies, maintenance of living expenses, savings, and payment of bills?​
House, car Which of the following is classified as a tangible asset?​
Stock, Mutual funds Which of the following is classified as an investment asset?​
decrease liabilities, decrease assets Vincent and Paula Farelli have decided to pay off their $875 MasterCard debt by taking $875 out of their money market savings account. This transaction will​ –
Credit card debt, bills Which of the following would be classified as a short-term liability?​
asset liabilities= net worth The formula for calculating net worth is​ –
$129,725 Cindy Estrada is applying for a loan and the bank has asked her for some financial information. Use the following data to calculate Cindy’s net worth. – ​Checking account balance$1,300American Express credit card balance$650Money market account$2,200House$255,000Mortgage loan balance$140,000Automobile$20,000Cash on hand$575Auto loan balance$8,700​
Over a period of time, shows income and expenses Which of the following is a characteristic of a cash-flow statement?​
fixed expenses Rent and vehicle insurance payments are examples of​ –
$8,300 Julie and Alex have compiled their financial records and would like to know if they are living within their level of income. What is their surplus? ​Salaries$48,000Interest income$1,200Food expenses$10,500Rent$14,400Clothing costs$3,600Auto expenses$4,200Recreation$4,800Miscellaneous expenses$3,400​
Taxable You pay personal taxes on your calculated ____ income.
Credits are not Taxable income is determined by subtracting all but which one of the following from gross income.​ Adjustments, deductions, exemptions are subtracted
Federal income tax Which of the following taxes is progressive?
25% A single individual pays $7,813 on a taxable income of $47,810 and $7,838 on a taxable income of $47,910. What is the marginal tax rate?
896 Judy Hays wants to give $3,200 to the building fund at her local church. Assuming Judy can itemize her deductions, how much will this contribution save her on her federal income taxes if she is in the 28 percent marginal tax bracket?
W-2 Earned income from an employer is reported to the recipient on a ______
Standard deduction Which of the following types of subtractions cannot be taken by a taxpayer if he or she itemizes deductions?
0 ​Iris Rosales is an unmarried college student age 21, and is claimed as a dependent on her married parents’ tax return. What is the maximum number of personal exemptions Iris can legally claim on her own tax return?
77,900 Joe and Marcia, a married couple with three young children, have a gross income of $120,000, adjustments of $6,700, and itemized deductions totaling $16,900. If personal exemptions for the year are $3,700 each and the standard deduction is $11,600 for married couples, what is Joe and Maria’s taxable income if they file jointly?
intrest effect ​Perhaps the greatest disadvantage of credit use is the –
Higher, higher ​The ____ the APR, the ____ the true cost of the credit.
You Who should set your debt limit?
Payment history, income, assets A lender can legally discriminate in granting credit based on –
Payment history, types of credit, amounts owed ​the factors in the development of credit scores are—–
Check credit report annually To protect your credit card privacy, which of the following is recommended?
accuracy, dispute investigation, access to your credit file Under the Fair Credit Reporting Act, the law requires –
Teaser rate, variable rate Miako has just applied for a credit card that offers a 1.9 percent interest rate for 12 months. At the end of 12 months, the interest rate will be “prime plus 9 percent.” Which of the following characteristics does this card have?
$50 if you report the loss Your credit card liability for fraudulent usage of your lost or stolen credit card is limited to $____ if you report the loss
Grace period ​If finance charges are not assessed on new credit card transactions during the period between the posting date and the due date, this period is called the _
no balance is carried foward Most credit cards have a grace period only if
APR-annual percentage rate ​If you are a person who always pays off the total outstanding balance on your credit card each month, which of the following aspects of the credit card agreement will you be least interested in? (Assume there is a 21-day grace period.) –
collateral A secured loan requires​ –
Interest cost Which of the following is NOT a good reason for using credit –
Collateral 40. Which of the following “C’s” of credit has the least influence on a lenders decision as to whether or not to make a loan? –
Pay day lending Which of the following lenders would likely have the highest interest rate? –
2 days To minimize your liability for ATM and Debit card transactions you must report fraudulent activity within –
Rewards If you are always going to pay off your credit card on-time, every month, then when shopping for a card the most valuable feature would be-
Balance Transfers, cash advances, late payments Which of the following credit card transactions will usually have a fee associated with it?
do preshopping research Before comparison shopping to purchase a car you should-
negative equity When your car depreciates in value faster than your balance on your loan it can create –
Money factor In leasing the interest rate or finance charge is known as the-
sell it yourself Usually the way to get the most for your car is to –
negotiate the price When buying a new car, which of the following should you do first –
annually You can request a free credit report from each of the credit reporting agencies –
Mortgage loan A loan to purchase real estate in which the real estate itself serves as collateral is a __________.​
adjustable rate morgage Which type of loan lures you in with a low interest rate, but has the option to raise your rate every year? –
30 year Which type of mortgage would have a lower monthly payment? –
15 year Which type of mortgage would have a lower total cost over the course of the entire loan? –
portfolio Your collection of multiple investments in different assets chosen to meet your financial goals is your​
represents ownership in a company A stock –
represents debt owed by a business or government A bond –
Dividends ________ is (are) the portion of a company’s profits that the firm pays out to its shareholders.
savings accounts, treasury bonds Which of the following investments has the lowest risk? –
conservative If you have a(n) _______ investment philosophy, you accept very little risk and are generally rewarded with a low return
growth stocks A conservative investor would be least likely to invest in​ -=
dollar cost averaging The investment strategy where an investor buys a fixed dollar amount of stocks or mutual funds regularly over a long period of time is called​ –
reduces, averaging out ​Portfolio diversification ___ volatility while __t__ return.
diversification An investor who reduces random risk by investing in a variety of types of investments is using
held to maturity Bonds pay the face value to the investor when they are –
IPO A new issuance of stocks is called a(n).
income stocks Companies that consistently pay out higher than average cash dividends are classified as _
deductible The amount a policyholder must pay for a claims before the insurance company begins making any payments:
premium The amount a policyholder pays up-front for insurance coverage on a monthly, semi-annual, or annual basis:
co-insurance A percentage of medical expenses that a policyholder must pay when they make a claim:
term A form of insurance that provides protection for your dependents in the event of your death for a set number of years is called ______ life.
cash value A form of insurance that protects your dependents in the event of your death and builds a reserve of money that you can borrow against or collect when you retire is called _____.
damage to other people and property when you are at fault Automobile liability insurance covers _
decrease All other things remaining the same, if you raise the deductible on your automobile insurance, your monthly premium will most likely ___________.
roth IRA Which of the following retirement arrangements grows tax free but requires you to pay taxes now? –
IRA, ROTH IRA Which of the following retirement arrangements would you fund on your own (not through your employer)?
401K Which of the following retirement arrangements would you fund through your employer?
IRA,401k Which of the following retirement arrangements is not taxed when you make the deposits but requires you to pay taxes on withdrawals when you retire?

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