Financial Literacy Final

Question 1

Opportunity Cost

Answer 1

Your next best option when your making a decision. (second choice)

Question 2

Human resources- Provide examples-

Answer 2

the people working for a company/organization that are responsible for finishing out the job. Examples- firing, recruiting, onboarding, compensation. Smaller example would be truck driver or mail organizer.

Question 3

capital resources- Provide examples-

Answer 3

man made elements employed to produce goods or services. Examples- equipment, machinery, tools.

Question 4

Natural resources- Provide examples-

Answer 4

materials or substances that occur in nature that can be used for economic gain. Examples-water, minerals, trees, fertile land, and forests.

Question 5

Scarcity-

Answer 5

the state of being short in supply; shortage.

Question 6

Wealth-

Answer 6

an abundance of valuable possessions or money

Question 7

Banking Fee’s-

Answer 7

charges levied by financial institutions for various services and transactions. Such as foreign transaction fees, ATM fees, and monthly maintenance fees.

Question 8

Advantages of an entrepreneur

Answer 8

rewarding career, work-life autonomy, leadership experience, work from any location, and company control.

Question 9

Characteristics of an entrepreneur

Answer 9

creativity, perseverance, adaptability, passion, decision-making, and optimism.

Question 10

Disadvantages of being an entrepreneur (working for oneself)

Answer 10

long hours and work-life imbalance, stress, uncertainty, lack of support systems, lack of accountability, early days of financial instability.

Question 11

Human capital

Answer 11

skills, knowledge, and experience an individual or population has, viewed in terms of their value or cost an organization.

Question 12

Gross pay-

Answer 12

total amount of money an employee earns before any deductions are made.

Question 13

Net pay-

Answer 13

amount of pay remaining for an employee after deductions have been taken from the individual’s gross pay. What u need to know when figuring out your monthly budget.

Question 14

Paycheck- mandatory deductions (who pays)-

Answer 14

a check for salary or wages made out to an employee. Who pays- employers, examples include federal and state taxes, social security, and contributions.

Question 15

FICA- Know what FICA stand for-

Answer 15

called for all working people in the US to fund social security so that it could provide them with financial benefits later in life. Stands for Federal Insurance Contributions Act.

Question 16

Itemized deductions-

Answer 16

certain expenses allowed by the IRS that can decrease your taxable income.

Question 17

Standard Deductions-

Answer 17

specific dollar amounts that reduce the amount of income which you’re taxed.

Question 18

Income-

Answer 18

money received, especially on a regular basis, for work or through investments

Question 19

Median Pay-

Answer 19

figure that represents the middle point of all salaries within a specific career or category.

Question 20

Financial Institution-

Answer 20

financial institution is a company engaged in the business of dealing with financial and economic transactions such as deposits, loans, investments, and currency

Question 21

Examples of financial institutions around us

Answer 21

check cashing store, payday loan store and Bank & Credit

Question 22

Insurance-

Answer 22

main purpose is to ensure transfer risk. Insurance companies have to have a large pool of people paying premiums so that the premium payments of all the insured clients will cover the costs for the emergencies of the few who need it.

Question 23

Why people buy insurance

Answer 23

o To protect their savings from unexpected events
o To cover medical expenses and routine care
o To protect property and shield against legal liability
o To have peace of mind and a feeling of safety

Question 24

Premium

Answer 24

an amount to be paid for an insurance policy

Question 25

Writing a check- What should be included-

Answer 25

date, recipients name, dollar amount, signature, and memo(optional)

Question 26

Check register-

Answer 26

report that records and tracks the transactions and balance of a checking account

Question 27

Bank statement

Answer 27

is a document issued by a bank once a month to its customers, listing the transactions impacting a bank account

Question 28

Deposit slips

Answer 28

small paper form that a bank customer includes when depositing funds into a bank account.

Question 29

FDIC

Answer 29

Federal Deposit Insurance Corporation, is an independent government agency that oversees the banking industry. The FDIC primary duty is to ensure deposits at US member banks in case they fail.

Question 30

Credit Card

Answer 30

small plastic card issued by a bank, business, etc., allowing the holder to purchase goods or services on credit. Which means you are spending money that you will have to pay back including credit rate.

Question 31

ATM-

Answer 31

is an automated teller machine that allows you to deposit and withdraw cash anytime, without needing to visit a bank during business hours.

Question 32

Wire Transfer

Answer 32

an electronic transfer of funds via a network that is directed by banks and transfer service agencies around the world. They have information like the recipient’s name and account number.

Question 33

Interest-

Answer 33

money paid regularly at a particular rate for the use of money lent or for delaying the repayment of a debt. . It is the price a borrower pays to lender for the use of credit provided by the lender.

Question 34

Types of Credit-

Answer 34

revolving credit, installment loans, and open credit.

Question 35

Credit Report-

Answer 35

A credit report is a physical record of a persons credit history. This report is based off a person’s ability to pay off their loans on time from the past. If you have a bad credit report, some lenders may not want to lend you money.

Question 36

Credit Score-

Answer 36

A credit score is a three-digit number that represents your credit risk when looking at someone’s overall loan ability. If this number is low, it means that the loaner is bad at paying loans on time and if this number is high that means that the loaner is very reliable and good at paying their loans on time.

Question 37

Principal-

Answer 37

amount of money lent or invested, on which interest is paid.

Question 38

APR- what is it, what it stands for-

Answer 38

Annual percentage is the yearly rate charged for a loan or earned by an investment and includes interest and fees.

Question 39

Human capital-

Answer 39

refers to the economic value of a workers experience and skills such as training intelligence and skills in an employee.

Question 40

Postsecondary opportunities-

Answer 40

any further education you persue post your high school graduation

Question 41

Scholarships- costs/benefits-

Answer 41

money for college that is usually based on merit such as athletic or academic performance. The benefits are that it does not have to be paid back and it is offered by many institutions. The costs are that applications can take considerable time and are not guaranteed

Question 42

Credit card- Benefits-

Answer 42

it enhances financial health, improve credit score, and easy loan approval

Question 43

Credit Card -Fees-

Answer 43

paid back on a specific date. The disadvantages of current cards are that sometimes young people borrow more money than they should for college loans

Question 44

Investment-

Answer 44

the action or process of investing money for profit or material use.

Question 45

Scams-

Answer 45

crime involving finance

Question 46

stocks

Answer 46

an investment or share in a company

Question 47

Bonds-

Answer 47

is a fixed income instrument and investment product where individuals lend money to a government or company at a certain interest rate for an amount of time. The entity repays the individuals with interest in addition to the original face value of the bond

Question 48

Diversification-

Answer 48

reduces risk by holding basket of securities that behave differently in different market conditions. It is an investing strategy used to manage risk. It involves spreading investments across a range of different companies and industries and asset classes.

Question 49

Benefits of saving-

Answer 49

the benefit of saving your income today is that you will have more money in the future to have bigger items and satisfactions in the future.

Question 50

Income

Answer 50

money received especially on a regular basis for work or other investments

Question 51

Saving-

Answer 51

putting money aside for the future for bigger purchases or emergencies.

Question 52

Entrepreneur-

Answer 52

someone who starts a business who is creative, good with relationships, organized, confident, and hard working.

Question 53

credit

Answer 53

the ability of a customer to obtain goods and services before payment, based on the trust that the payment will be paid in the future. is the price a borrower pays to lenders for their use of credit provided by the lender. Borrows and lenders benefit in credit transaction. Commercial bank, credit unions and savings and loan or institutions that provide credit.

Question 54

Risk-

Answer 54

• is defined in financial terms as the chance that an outcome or investment actual gates will differ from an expected outcome or return risk includes the possibility of some or all of an original investment.

Question 55

Finance Charge-

Answer 55

a fee charged for the use of credit or the extension of existing credit.

Question 56

Stock prices-

Answer 56

only tells you a company’s current value or its market value period so comma the price represents how much the stock trades at or the price agreed upon the buyer and seller.

Question 57

Incentive-

Answer 57

encourages a person to do, achieve, or buy something

Question 58

Principal-

Answer 58

amount of money lent or invested, on which interest is paid.

Question 59

Risk and Return

Answer 59

risk refers to the uncertainty or variability of investments and outcomes. It represents the chance of losing money or not achieving expected returns. Return is the gain or loss from an investment over a period of time period the risk return tradeoff suggests that higher risk investments have the potential for higher returns.