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Personal Finance > Personal Finance Exam Part 2 > Flashcards

Personal Finance Exam Part 2 Flashcards

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1
Q

Blank Endorsement

A

The signature of the payee is written on the back of the check

Provides little protection, anyone can cash it, should be used only when you are at the bank ready to cash or deposit

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2
Q

Bounced

A

A check that is not honored by a bank and is returned to the payee’s bank due to nonsufficient funds

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3
Q

Checkbook Register

A

A tool that can be used to track checking account transactions

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4
Q

Compound

A

Interest earned on both principal and previously earned interest

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5
Q

Forgery

A

Act of signing another person’s name on a check

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6
Q

Annuity

A

A fixed amount set aside on a regular basis over time

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7
Q

Outstanding Checks

A

Checks written that have not yet been processed by the bank

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8
Q

Restrictive Endorsement

A

Restricts or limits the use of a check

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9
Q

Rule of 72

A

A quick formula for computing how long it will take to double money at a given interest rate

Divide the annual interest rate by 72

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10
Q

Safe Deposit Box

A

Secure container located in a bank vault

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11
Q

Simple Interest

A

Interest earned on both principle and previously earned interest

Principal (P) x Rate (R) x Time (T) = Interest

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12
Q

Third-Party

A

Check issued by the check writer to the payee, who then endorses and transfers it to a third party

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13
Q

Deductible

A

Amount of money you must pay toward your medical expenses before your insurance company begins to pay

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14
Q

Disability Insurance

A

Insurance that provides income to replace a portion of normal earnings when the insured is unable to work due to nonwork-related injury or illness

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15
Q

Fee-For-Service

A

A type of health insurance plan that allows the patient to choose medical providers (unmanaged care)

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16
Q

Home Inventory

A

List of items of value in your home; used for insurance purposes

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17
Q

Liability Coverage

A

Protection against injuries suffered by others on your property or as a result of your actions

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18
Q

Medicare

A

Government-sponsored health insurance for people age 65 and older. Run by Social Security Administration and funded by employee payroll deductions

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19
Q

Premium

A

Price you pay for insurance coverage

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20
Q

Risk

A

Chance of injury, damage or economic loss

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21
Q

Risk Assessment

A

Involves identifying risks and deciding how serious they are

22
Q

Risk Avoidance

A

Stoping a certain behavior

23
Q

Self-Insure

A

Involves setting aside money to be used in the event of injury or loss of assets. One method of assuming risk.

24
Q

Stop-Loss

A

A clause hat provides 100% coverage of medical expenses after a certain amount has been paid by the insured

25
Q

Contingency

A

Unplanned or possible events

26
Q

Dollar Cost Averaging

A

Systematic purchase of an equal dollar amount of the s,are stock at regular intervals

27
Q

Estate Planning

A

Process of preparing a plan for transferring property during one’ slide time and at one’s death

28
Q

Foundation

A

Fund or an organization established and maintained for the purpose of supporting an institution or a cause

29
Q

Investing

A

Strategy to earn more on your money that the rate of inflation

30
Q

Liquidity

A

Measure of how quickly an asset can be turned into cash

31
Q

Return (ROI)

A

Amount that savings or investments grow expressed as a percentage

Divide the amount you gained by the amount you invested

32
Q

Tax Deferral

A

Postponement of taxes to be paid

Taxes on gains are not paid until the money is withdrawn

33
Q

Asset Allocation

A

Choosing a combination of funds within a single mutual fund company

34
Q

Callable

A

A bond with a clause that allows the issuer to repay the bond early

35
Q

Franchise

A

Contract that gives you the right to sell a company’s products and services

36
Q

Futures Contracts

A

Agreement to buy or sell. Specific commodity or currency at a set price on a set date in the future

37
Q

Indirect

A

(Investing) buying shares of a mutual fund instead of buying individual shares of stock in various companies

38
Q

Preferred Stock

A

Stock that guarantees a fixed dividend but does not provide voting rights

39
Q

Rollover

A

Process of moving a retirement account balance to another qualified account without incurring a tax penalty

40
Q

Roth IRA

A

Post tax money, earnings grow tax-free

41
Q

Treasury Bills

A

Known as T-Bills, sold in terms - 4, 13, 26, 52 weeks sold in denominations of $1000

42
Q

First Fruits

A

First fruit giving means giving off the top

43
Q

Managers

A

People are actually asset managers for the Lord

44
Q

Offering

A

Offerings are different from tithing. They are hove the tithe and are freely given from surplus

45
Q

Owner

A

The Lord is the owner of the earth

46
Q

Tithe

A

The Bible says to give a tenth of your increase

47
Q

Steward

A

A steward is a manager, not an owner

48
Q

Proverbs 15:22

A

Plans fail for lack of counsel, but with many advisers they succeed

49
Q

Matthew 16:26

A

What good will it be for someone to gain the whole world, yet forfeit their soul? Or what can anyone give in exchange for their soul?

50
Q

Luke 12:15

A

Then he said to them, “watch out! Be on your guard against all kinds of greed, life does not consist in an abundance of possessions.”

51
Q

Ecclesiastes 11:6

A

Sow your seed in the morning and at night let your hands not be ideal, for you do not know which will succeed, or whether both do equally well

Personal Finance (2 decks)

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