Final Exam review Flashcards
What is a benefit of having a deductible of $0 for a homeowner’s insurance policy?
When you file a claim you are not responsible for any damages.
The failure to take ordinary or reasonable care to prevent accidents from happening
Negligence
The purchaser of an insurance policy
Policyholder
Buying an insurance policy is an example of risk
Shifting
Wearing a seat-belt would be an example of risk
Reduction
A request for payment from an insurance company to cover financial loss
Claim
Provides protection against possible financial loss
Insurance
Making a payment past the due date can result in
A late fee and/or a negative impact on your credit history.
What is an example of a good credit score to have
The higher the number the better
A fee charged at the same time each year for having a credit card, not all credit cards charge this
Annual fee
What happens when you only pay the minimum payment on your credit card bill?
It takes long to pay off the balance and you pay a lot in interest.
The low rate charged by a lender for an initial period to entice customers to sign up or switch credit cards.
Introductory APR
A method insurance companies use to determine claim settlements for renters or homeowners policies, under which the payment will be for the cost to reimburse you for an equal amount it would cost to go buy the same item in store today
Replacement Value
If you had a robbery in your house and your deductible was $1000, how much would the insurance company pay for the theft of a total of $5,000.
$4000
What refers to loss in value as an item gets older?
Depreciation
A person joins an insurance company by purchasing a contract called
A policy
Coverage that provides protection for your owned residence and its associated risks, such as damage to personal property and injuries.
Homeowners insurance
For insurance purposes, the chance of loss or injury is known as a
Risk
Additional property insurance that covers the damage or loss of a specific item of high value above the normal coverage limit.
Personal Property Floater
To get a credit card, individuals under 21 must
- Have parent/guardian cosigner
or
- Prove they have sufficient income to repay their debt
What has the most impact on your credit score?
Payment history
What are disadvantages of using a credit card?
- Feeling of an extension of income
- High Interest Rates
- Potential for more debt
- Credit Fraud
- Too easy to use
An APR that remains the same unless there is a penalty increase
Fixed APR
What are the 3 Credit Bureaus
Experian
Equifax
Transunion
Charge imposed for not paying on time
Late payment fee
A federal law passed by the US Congress and signed by President Barack Obama on 5/22/09. It establishes a more fair and transparent credit card industry.
CARD Act
A number, roughly between 300 and 850, that reflects the credit history detailed by a person’s credit report.
Credit Score
Which of the 5 C’s of credit, represents the savings, investments, and other assets that can help repay the loan?
Capital
If you default on a loan, it will stay on your credit report for
7 years
When a person agrees to be responsible for loan payments if the other party fails to make them
Co-signing
The best annual fee for a credit card would be
No Fee
The smallest amount you can pay and remain a borrower in good standing
Minimum monthly payment
The amount of money that a person borrows is called
Principal
Insures the accuracy and privacy of information, kept by credit bureaus and consumer reporting agencies. It gives consumers the right to know what information credit bureaus and consumer reporting agencies are distributing about them to creditors, insurance companies, and employers
Fair Credit Reporting Act
A document containing financial information about a person, focusing on his or her credit including history of paying obligations, available credit lines, outstanding balances
Credit Report
In regards to a credit score, the higher the score the _______________ the risk
Lower
What activity describes a person buying insurance?
a. Spending $1,000 a year on a mortgage
b. Spending $500 for a 10 year certificate of deposit
c. Spending $1,000 a month on a mutual fund
d. Spending $500 a year on premiums to protect a renter against losses due to theft or fire
Spending $500 a year on premiums to protect a renter against losses due to theft or fire
It would be in your best interest to have what type of APR for a loan?
Low as possible
Requires creditors to disclose in writing certain cost information, such as the annual percentage rate (APR), before consumers enter into credit transactions
The Truth in Lending Act
The maximum amount of money a creditor has made available to a person
Credit Line
Which documents should be stored in a safe-deposit box?
Social security cards, deeds to house, titles to car, birth certificate
The type of credit where you receive a one time loan that you will pay back over a specified period of time usually in payments of equal amounts
Close end/installment credit
An asset used as a form of security to help guarantee that a creditor will be repaid. It can be taken in case a debt is not paid
Collateral
Customers who file for bankruptcy are not responsible for what type of payments
Alimony
Child support
student loans
A legal process in which some or all of the assets of a debtor are distributed among the creditors because the debtor is unable to pay his or her debts.
Bankruptcy
An entity such as a bank, finance company, credit union, business, or individual to which money is owed
Creditor
Tony has $50 a month transferred electronically from his checking account to his savings account. This is an example of:
A savings plan
Having your paycheck put directly into your account is
Direct Deposit
To earn high interest rates on a certificate of deposit, you must
- Leave money in for the term of the CD
- Pay penalties if you withdraw money early
- Deposit a minimum amount to open the account
What is the maximum monetary protection covered by the FDIC per account at a bank?
$250,000
Who would receive the death benefit first for a life insurance policy?
Primary beneficiary
The most liquid type of investment is
A savings account
The portion of a covered loss that is your responsibility
Deductible
The total amount of money in your bank account is called
The balance
Credit cards allow you to
- Spend up to an available line of credit
- Borrow money for a short period of time
- Buy now, pay later
- Purchase online
A time period during which no finance charges are added to a credit card account when you no existing balance.
Grace period
You have a checking account balance of $100 and you deposit a personal $200 check from your brother in your checking account. When will you be able to withdraw $150 in cash?
3 to 7 days later. Time enough for the banks to confirm that money is in the payor’s account.
The FDIC insures depositors against losing their money in the case of
Bank Failure
If you spend $4 a week on ATM fees what will the annual charge be?
$208
What are the 5 C’s in regards to credit?
Character, Collateral, Capital, Capacity, Conditions
Compared with commercial banks, credit unions generally offer
- Lower fees
2. Lower interest rates on loan
If you are selling your car through a newspaper advertisement. Which form of payment should you avoid?
Personal checks
What is the first thing a consumer should do to begin to correct a mistake on a credit card bill?
Call the creditor then notify them in writing
You hope the money earned on interest in a savings account will keep up with
Inflation
When a person buy’s auto insurance with a $500 deductible, the insurance company will
Pay any portion of the claim beyond $500
What is the disadvantage of having a deductible of a $0 for an auto insurance policy?
Paying a higher premium
A nonprofit financial institution that is owned by its members and organized for their benefit.
Credit union
What is the benefit of having a deductible of a $0 for a homeowner’s insurance policy?
Paying $0 when filing a claim
A card issued by a financial institution that allows you to withdraw money from your accounts or pay for purchases by deducting funds directly from your account.
Debit Card
A method insurance companies use to determine claim settlements for renters or homeowners policies, under which the payment is based on the replacement cost of an item minus depreciation.
Actual Cash value
What financial product can you buy for $25, is safe, and will be worth $50 at a future date?
Series EE saving bond
What equation would give the total cost including sales tax if an item costs $80.00 and sales tax is 8.875%
80.00 * 1.08875
How much does 2 hundred dollar bills, 3 twenty dollar bills, 1 ten dollar bill, 3 five dollar bills, 4 one dollar bills, 4 quarters, 4 dimes, and 4 pennies equal?
$290.44
Convert .073 into a percent
7.3%
A bill for 5 people at a fancy restaurant came to $572.45 before tax. Tax is 8.45%. How much tax would be added to the bill?
$48.37
What financial services is best suited for saving money over a period of years where you will not need to access the money?
Certificate of Deposit (CD)
A check you have written that has been paid by the bank.
Cancelled check
A report that accounts for the difference between your bank statement and your check register balance.
Bank Reconciliation
A check you wrote been has not been cashed or deposited yet.
Outstanding check
A check that was a mistake and will never be paid.
Voided Check
The term used to describe the ease and speed with which you can convert savings or an investment to cash is:
Liquidity
Banks use savings account deposits to:
Give loans to other consumers and businesses
The following number in written form would be: 884,104.53
Eight hundred eighty four thousand, one hundred four and fifty three hundredths
The following number in numerical form would be:
Thirty three million, six hundred fifty two thousand, eighty and thirty five hundredths
33,652,080.35
You purchase the following items from your local grocery store in Colorado where all food purchased is taxable. Toothpaste - $2.56, Seltzer - $.99, Broccoli - $2.99, OJ - $3.49. You have a 20% off coupon for the OJ. Determine how much tax you would pay if tax is 7%?
- 49 * .20 = .70
- 49 -.70 = 2.79
- 79 + 2.56 + .99 + 2.99 = 9.33
- 33 * .07 = .65
Round $74.6781 to the nearest cent.
$74.68
If you buy an item that costs $56 and there is a discount of 40%, what is the discount?
56 * .40 = $22.40
Convert 1.345% into a decimal.
0.01345
Tips are generally calculated from what part of the bill?
Subtotal
The cost of an insurance contract is referred to a as the
Premium
New Jersey state sales tax is
7%
Another word for a tip is?
Gratuity
What may happen when eating out with a large group of 8 or more people seating together?
A mandatory tip of 18% or more may be added
Sales tax is generally expressed as a
Percent
A failure to meet a financial obligation
Default
An example of open-end credit is
Credit card or Home Equity Loan
Prohibits credit discrimination on the basis of sex, race, martial status, religion, national origin, age, or receipt of public assistance.
Equal Credit Opportunity Act
What is the New Jersey sales tax rate in an urban enterprise zone?
3.5%
After rounding a number to the nearest cent or hundredths place, how many decimal places will you have?
2
A winter jacket regularly costs $399.99. There is a markdown $30.00, what will the sale price be?
$369.99
