DQR Personal Finance Final Study Guide

The main goal of personal financial planning is? Achieving personal economic satisfaction
Who is most likely to benefit from inflation? Borrowers because percentage you pay on a loan stays the same
The Fed refers to? Federal Reserve System
Some savings and investment choices have the potential for higher earnings. However, these may also be difficult to convert to cash when you need the funds. This problem refers to? Liquidity risk
A question associated with the saving component of financial planning is? Do you have an adequate emergency fund?
When an individual makes a purchase without considering the financial consequences of that purchase, they are ignoring the aspect of financial planning. Spending
As an individual plans to set aside funds for her young children’s college education, she is setting a ______ goal. Long term
The time value of money refers to: Increases in an amount of money as a result of interest
The first step of the financial planning process is to: Analyze your current personal and financial situation
The uncertainty associated with decision making is referred to as? Risk
Which of the following is usually considered a long-term financial strategy? Investing in a growth mutual fund to accumulate retirement funds
An example of a personal and employment document is a? Social security card
A personal balance sheet presents? Items owned and amounts owed
Current liabilities differ from long term liabilities based on? When the debt is due
Which of the following situations is a person who could be insolvent? Assets $40,000; liabilities $45,000
Total earnings of a person minus the deductions for taxes and other items is called? Take-home pay
Payments that do not vary from month to month are ____ expenses Fixed
To determine a person’s solvency, which financial document should be consulted? Balance sheet
The difference between the amount budgeted and the actual amount is called a? Budget variance
Nick Boss has a savings account with $550 in it. He knows that he can withdraw this money from his savings account whenever he wishes. This would be an example of? A liquid asset
A personal balance sheet? Reports what an individual or a family owes or owns
Jerry Allison needs to store the title to his car and his house. Where is the most appropriate place for jerry to store this info? His safe deposit box
Jamie McFarland has determined that the value of her liquid assets is $4,500, the value of her real estate is $128,000, the value of her personal possessions is $62,000 and the value of her investment assets is $73,000. She has also determined the value of her current liabilities is $7,500 and the value of her long term liabilities is $98,000. What is the total value of her assets? $267,500
The Hernandez family budgets $420 a month for food. Last month they spent $413, which creates A budget surplus $7
The main purpose of taxes is to Generate revenue for funding government programs
The ___ property tax is based on the value of land and buildings at some point in time Real estate
Money received in the form of dividends or interest is ______ income Investment
Reductions from gross income for such items as individual retirement account contributions and alimony payments will result in? Adjusted gross income
Which of the following would qualify a person for an exemption when computting taxable income? A dependent
Most people pay federal income tax by? Having amounts withheld from income
An example of a tax-exempt investment is? Interest on municipal bonds
The state of oklahoma imposes a tax of $.17 per gallon on gasoline. What type of tax is this most likely? Excise tax
Joan Sanchez is single and earns $40,000 in taxable income. She uses the following tax rate schedule to calculate the taxes she owes. 29,050-70,350Joan has calculated that she owes $6,747.50 in taxes. What is Joan’s marginal tax rate? 25%
Maryellen Epplin worked in Poland for part of the year and earned $50,000 while she was there. This income will not be included in her income for the year. This represents An exclusion
Although credit permits more immediate satisfaction of needs and desires, it Does not increase total purchasing power
Another name for open-credit is? Revolving credit
The debit card Debits your account at the amount you buy goods or services
Experts suggest that you spend no more than ____ percent of your net income on purchases. 20%
If you consign a loan You’ll have to pay up the full amount of the debit if the borrower does not pay
Most of the info in your credit file may be reported for only ___ years. 7
If you have incorrect info in your credit file: There are legal remedies available to you
A bank that is looking at your past payment records on your loans is most likely examining which aspect of the 5Cs of lending? Character
A term that refers to the borrower’s assets or the net worth is called? Capital
A loan officer is examining your income and the amount of your existing debt payments in deciding whether to make a loan to you today. Which aspect of the 5Cs of lending is the loan officer most likely looking at? Capacity
If your credit application is denied, you: Are entitled to know the specific reason you were denied credit
What should you do if your identity is stolen? Contact the fraud departments of each of the 3 major credit bureaus
Which federal consumer credit law regulates the advertising of credit terms? Truth in lending act
Which of the following is an advantage of using credit? The use of credit allows for the purchase of goods even when funds are low
What should you do when you shop online using your credit card? Use a secure browser
Maryann Lawrence wants to get a loan in just her name. She knows the creditor cannot: Refuse her credit if she is creditworthy
The info in your credit report is most likely used to Calculate your FICO credit score
Renting would be most appropriate for people who: Have limited funds currently available
What does it mean to sublet an apartment? To obtain another tenant to complete a lease period
Which of the the following would increase the amount that a person could afford to spend on a home? Increase family income
Restrictions on how property in an area can be used are? Zoning laws
The amount of mortgage a person is eligible for would be increased by: Lower interest rates
The purpose of a rate cap with an adjustable rate mortgage is to: Restrict the amount by which the interest rate can increase
Which of the following is an example of a closing cost? Title insurance
Which document is used to transfer ownership of propert from one party to another? Deed
The most popular type of home ownership is? A single family dwelling
The legal responsibility for the financial cost of another person’s losses or injuries is referred to as? Liability
Negligence refers to? Failure to take ordinary and reasonable care
Which of the following is considered personal property for home insurance coverage? Furniture
Renter’s insurance would include coverage for? Personal property
The ____________ method to settle claims is based on the current replacement cost of a damaged or lost item less depreciation. Actual cash value
Your home insurance policy has a $250 deductible. If a small fire causes $600 damage to your home, what amount of the claim would the insurance company pay? $350
____________ provides coverage for the risk of financial loss due to legal expenses, medical expenses, lost wages, and other expenses associated with injuries caused by an automobile accident for which you were responsible. Bodily injury liability
Which of the following is a system in which drivers involved in an accident collect medical expenses, lost wages, and related injury costs from their own insurance company? No-fault insurance
Comprehensive coverage would cover financial losses due to: Damage to your car caused by wind or hail
Which of the following factors is used to determine person’s driver classification? Age
Nick Rodr owns a home in Edmond, Oklahoma and pays $665 per year in insurance on the home. The $665 is an example of: A premium
Brett Johnson owns a home in Yukon, Oklahoma. A babysitter he hires breaks her leg when she trips over the dog. What part of his homeowner’s insurance would cover this loss? Personal liability
Which of the following would be an example of the driver classification category that determines insurance rates? Charlie Purciful is 22 years old
Which of the following might qualify Amy Farmer for a premium discount on her automobile insurance? A. She has completed a driver’s training programB. She is a straight A student in collegeC. She has installed an alarm system in her car***D. All of the choices would likely qualify her for a premium discount
Alice Cooper makes sure to contribute ten percent of her monthly earnings to her 401(k) plan at work. Her 401(k) plan allows her to invest in several different types of mutual funds and her employer matches up to 5% of her salary. Which suggestion for obtaining money she needs for investing is she following? Taking advantage of employer-sponsored retirement programs
An example of ____________ risk occurs when an investment does not keep up with prices that are increasing in the overall economy. Inflation
Which of the following investments offers the greatest growth potential? Common stock
Garrett Jennings is thinking about buying an investment. The investment option that he is thinking about buying represents the most basic form of ownership and pays a dividend. The dividend on this investment is paid after all other payments and dividends have been made. What investment is Garrett thinking about purchasing? Common stock
Kevin Bacon is thinking about buying an investment. The investment option that he is thinking about buying is a written pledge by a corporation to repay a specified amount of money. It also pays interest payments every 6 months until it matures. What investment is Kevin thinking about purchasing? Corporate bond
What are the last two steps in the auto purchase process? Shop for financing and close the deal
What is the first step in the the auto purchasing process? Analyzing needs vs. wants
How much of a down payment do lenders recommend when purchasing a car? 20%
If you have a car loan the lender will require what kind of insurance? Liability, comprehensive, and collision coverage
Car lease payments are usually: Lower than loan payments
What is the disadvantage to buying a home? The value of your house may decrease
The transfer of a lease agreement to a new tenant is known as a? Sublease
Which is NOT an advantage of renting? The landlord can make inspections
One disadvantage to renting is? You do not gain any equity in the rented property
Connie just graduated from college and got her first job. The job pays well but promotions may require her to relocate. What is the best option for Connie if she wants to find a home? Rent a home that meets her needs in her current city
How many days notice is usually required by apartment for vacating a unit? 30-60

Leave a Reply

Your email address will not be published. Required fields are marked *