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Personal Finance > FINC Final > Flashcards

FINC Final Flashcards

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1
Q

Even though a regular savings account is suitable when you are saving $500 for your beginner emergency fund, why is a money market mutual fund a better place to keep your completed emergency fund?

A

A money market mutual fund is easy to access; Typically a money market mutual fund averages a higher interest rate than a savings account; A money market mutual fund has check writing privileges.

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2
Q

Savings is about:

A

emotion and contentment

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3
Q

Which is not a key to saving money?

A

Your income

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4
Q

The Baby Steps can best be described as:

A

A systematic process for getting out of a financial mess and into building wealth; A series of seven steps that help your plan, save and manage money; A series of steps that work in good times and in bad times.

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5
Q

On average, how long will it take before your budget begins to work effectively?

A

3 Months

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6
Q

Which of the following is not true of a zero-based budget?

A

if you have extra money left at the end of the month, your budget was successful

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7
Q

How often should you balance your checking account?

A

Once a month

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8
Q

If 80% of millionaires are first-generation rich, then one can conclude:

A

They started with nothing and did smart stuff

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9
Q

On average, payday lending, cash advance and title pawn loans cost the consumer:

A

400% or more annually

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10
Q

Which statement is not true about debt consolidation?

A

You end up saving money because you get a lower interest rate

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11
Q

Which is true about the practice of marketing credit cards to young adults?

A

All of the above…A. Teens are the number-one target of credit card companies in America today.B. Brand loyalty to your first card is incredible, so credit card companies work hard to win you over first . C. Colleges are losing more students to credit card debt problems than to academic failure

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12
Q

Why do people think that the home equity loan is a good idea?

A

All of the above…a. There is a tax refund

b. It serves as a substitute for an emergency fund
c. It is a way to consolidate debt

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13
Q

Kevin has the following debts: How should he prioritize his debt snowball?

A

Visa, Student Loan, Car, Home Equity Loan

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14
Q

Which type of loan can be used for debt consolidation?

A

Home Equity

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15
Q

As you grow, you will improve most in the areas you are _____ in:

A

Weakest

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16
Q

When looking for a job, find something that blends your:

A

All of the Bible…a.) skills

b. ) personality traits
c. ) dreams

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17
Q

During college you have two goals: stay in school and:

A

Stay out of debt

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18
Q

Which is true in terms of singles and couples when it comes to money?

A

Singles are more prone to impulse buying than couples because they don’t have to be held accountable.

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19
Q

In which of the following ways are men and women different when relating to money?

A

All of the above…a.) Men view the emergency fund as boring; women view it as security.

b. ) Women view the emergency fund as the key to their finance plan; men view it as not being sophisticated enough.
c. ) Women like to hunt down deals when shopping; men like to negotiate.

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20
Q

We’re happiest and most fulfilled when we’re:

A

Serving and giving

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21
Q

Which is not true about giving?

A

The minimum you should give is 25% of your income

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22
Q

Which of the following is not part of power over purchase when making a significant purchase?

A

That’s not good enough

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23
Q

Why is there a direct correlation between the number of hours you watch TV and the amount of
money you spend?

A

Advertising

24
Q

What concept is best explained by the statement, “Money spent here cannot be spent there”?

A

Opportunity cost

25
Q

By asking yourself, “Why am I buying this product?” you are examining your:
“90-Days-Same-As-Cash” means:

A

You have 90 days to pay for an item before interest fee accrue

26
Q

Which of the following is not one of the three keys to finding a bargain?

A

Fast talking

27
Q

With which technique will you most likely hear, “I have to check with my manager”?

A

Good guy, bad guy

28
Q

If you had no money but needed an item, what would be the best option?

A

Offer to trade services for the item

29
Q

When should you send a cease and desist letter to creditors?

A

Only in the most extreme situation

30
Q

Which is not part of the Federal Fair Debt Collections Practices Act?

A

requires creditors to correct any inaccuracies on your account

31
Q

Which of the following is not forgiven under a bankruptcy?

A

Student loans

32
Q

In which case are you most likely to get sued if you are behind in paying bills?

A

If you are making no payments

If you have stopped all contact

33
Q

In general, a good way to save on insurance premiums is to:

A

Increase deductibles

34
Q

Which is a type of insurance to avoid?

A

Mortgage insurance

35
Q

Which of the following is not a true statement about an HSA?

A

It is a good plan for people who have a lot to medical expenses

36
Q

Which of the following statements is not true about cash value life insurance?

A

cash value is essential for anyone over 65

37
Q

Which is not true about investments?

A

Always invest for tax saving purposes

38
Q

A collection of money from different investors, which is used to purchase stocks, bonds, or other
investments and is managed by a fund manager, is called:

A

Mutual funds

39
Q

The most aggressive mutual funds tend to be from:

A
  1. Companies that are overseas 2. Companies that are a little younger and growing
40
Q

What is the best option if you begin losing money in your mutual fund?

A

Leave it alone and continue to invest money in the fund

41
Q

The primary difference between the Roth IRA and a traditional IRA is:

A

The Roth IRA grows tax free; the traditional IRA doesn’t.

42
Q

Under which condition are you not able to make a tax-free withdrawal from your Roth IRA?

A

Career change and temporary drop of income

43
Q

What is the best option for your retirement plan when you leave a company?

A

Do a direct transfer into an IRA

44
Q

When seeking a financial counselor to help you with your investments, always go with:

A

A financial counselor with the heart of a teacher who explains everything to you

45
Q

You are ready to buy a home under the following conditions:

A

You have an emergency fund. You have at least a 10% down

46
Q

If you must take out a loan, be sure to:

A

A fixed rate

47
Q

Which is an advantage of taking a 15-year mortgage vs. a 30-year mortgage?

A

The difference you save in interest is significant

48
Q

When buying a home:

A

Buy in the bottom price range of the neighborhood
Make at least a 10% down payment
Overlook bad landscaping and outdated cosmetic issues

49
Q

Which is not a horrible mortgage option?

A

Conventional

50
Q

Which is not a characteristic of an accelerated loan?

A

The interest rate adjusts periodically

51
Q

Which is not true about owner financing?

A

The fees are extremly expensive

52
Q

Why do ARMs appear to be a good mortgage option?

A

The initial interest rate is lower, so people are able to buy the house they want

53
Q

If you are buying a house outside of a standard subdivision, what should you get?

A

Land survey

54
Q

Which is not a good reason by itself to purchase a home?

A

It is a tax deduction

55
Q

Know the description for each of the following:
Large-Cap :
Small-Cap :
Mid-Cap :

A

Large Cap issued by a corporation that has a large amount of capitalization in excess of $10 billion.Small Cap issued by a company that has a capitalization of between $300 million - $2 billion. Mid Cap issued by a corporation that has capitalization between $2 billion and $10 billion.

56
Q

Know which types of insurance is necessary.

A 
Homeowner
Auto
Identity theft
Health
Disability
Long term care 
Life

Personal Finance (1 decks)

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