Midterm Flashcards
What should a consumer pay most attention to when shopping for a savings account?
Whether the account would be in a bank, savings loan, or credit union.
What is the result of owning 100 shares of stock, valued at $25.35 per share, which splits 2 for 1.
You now own 200 shares of stock worth $2,535.
List some facts about a 401(K) retirement plan.
Contributions are deducted from your salary before taxes and contributions are sometimes matched by the employer.
You are offered to work overtime at the movie theater for an additional $50 on Saturday. You are also invited to a friend’s house for a cookout. After working hard all week, you have decided to have some downtime with your friend. What is your opportunity cost?
$50.
What are two things that are required to determine your net worth?
Assets and liabilities.
Using the Rule of 72, determine the interest rate needed to double $500 in 10 years.
7.2%
As Mariah is looking over the sales receipt, she discovers a 9.75% additional charge on top of the purchase price. What is most likely the reason for the extra percent?
Sales tax on the shirt she purchased.
What’s an example of a situation where liability insurance could protect a policy holder?
Angie backed into a vehicle in the grocery store parking lot and caused $3,000 in damages to the other vehicle.
You have a $100 deductible on your collision car policy. You have a wreck which causes $500 in repairs. How much money should you expect to pay for the repairs?
$400.
What are some examples of situations where stocks would increase or decrease for Delta Airlines?
Large increase in gas price or United Airlines going out of business.
How can a card holder avoid paying interest on a credit card?
Pay the balance in full each month.
What would be some good strategies for handling your ATM or debit card?
Memorize the PIN, keep in a safe place, and report loss immediately.
Describe an accurate benefit for a budget.
It allows you to plan how your income will be saved/spent, leading to long-term financial security.
It is suggested to save _____ of living expenses in an emergency fund.
3 to 6 months.
How would a car or home be defined? A liability, asset, equity, or net worth?
As an asset
List a fact about a loan variable.
The longer the time period of the loan, the smaller the payments.
What is the term for providing traditional checking and savings accounts for individuals and businesses?
Depository Institution.
What is the time frame in which short term financial goals should be set and accomplished.
Within one year.
Which of the following is a variable expense? Rent, utility bills, insurance premiums, student loan payment.
Utility bills.
What is the single most important decision you can make to keep your credit score high?
Pay the credit card bill in full.
Which kind of credit is expressed in a store advertising with “30 Days Same as Cash”?
Non-installment credit
What is the function of the FDIC? (Federal Deposit Insurance Corporation)
To insure member depository institutions against loss.
Jane and Stephanie both borrow $15,000 from the same bank to purchase the same make and model car. Jane’s credit score is 732 and Stephanie’s is 588. Who is more likely to pay a lower finance charge?
Jane.
What is an accurate comparison and contrast of debit and credit cards?
Unlike credit cards, a debit card withdraws money from your account from immediate payment.
Yolanda owes $500 on each of her three credit cards. Credit card A charges 7% interest. Credit card B charges 8% interest. Credit card C charges 9% interest. If Yolanda has $1,000 to pay down her credit card debt, then what is her best choice to minimize future interest changes?
Pay off both cards B and C.
