Personal Finance Test Answers

Creditworthy A determination that you are a good credit risk
Net pay Amount of income left after taxes and deductions have been taken out.
Adjusted gross income Gross income less adjustments
Stop payment order A request that the bank not honor a specific check
Annual percentage yield Actual interest rate an account pays, stated on a yearly basis with the compounding included
Bond A debt obligation of a corporation or a state or local government
Audit An examination of income tax returns by the IRS
Car title A legal document that establishes ownership of the vehicle
Cashier’s check A check written by a bank on its own funds
Bank reconciliation The process of matching your checkbook register with the bank statement
character A responsible attitude toward honoring obligations, often judged on evidence in the person’s credit history
Budget A pending and saving plan based on your expected income and expenses
Certificate of deposit A time deposit that pays a fixed rate of interest for a specified length of time
Collateral Property pledged to assure repayment of a loan
Opportunity cost the value of the next-best choice-what you are giving up
Compound Interest Interest paid on the original principal plus accumulated
Credit score The total of assigned points based on several factors that tells potential creditors the likelihood that you will repay debts agrreed
Business plan A formal document that outlines the path a business intends to take to earn and grow revenues
Debit card a card that automatically deducts money from your checking account when it is used for purchases
Deductible The specified amount of a loss that insured must pay
Bankruptcy A legal process to get out of debt when you can no longer make all your required payments
Depreciation A decline in the value of property due to normal wear and tear
Checkbook register A booklet used to record checking account transactions
Direct deposit Your net pay is deposited electronically into your bank account
Down payment a part of the purchase price that is payed upfront
Competition The rivalry among sellers in the same market to win customers
Certified check A personal check that the bank guarantees or certifies to be good
Electronic funds transfer A computer-based system that enables you to move money from one account to another without writing a check or exchanging cash
Gross pay the total amount of an employee’s earnings before deductions are taken out
Interest Earnings on principal
Monopoly A market with many buyers but only one seller
Overtime Time worked beyond regular hour
Resume A document that describes your work experiences, education, abilities, interest, and other information that may be of interest to an employer
Target market A specific group of consumers that an organization selects as the focus of its marketing plan
Job application A form that asks questions to be sure you are qualified for a job opening
Fixed expences Costs that do not change from month to month
Service job A job in which you perform a task or a service for a person or business
Insurance A method for spreading individual risk among a large group of people to make losses more affordable
Impulse buying Buying something without thinking about it and making a conscious decision
Work study A program that permits students to work at the camoys or other college location to ear money

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