Personal Financial Management - Chapter 5

Question 0

Buyers remorse

Answer 0

Regretting a purchase soon after making it

Question 1

Annual percentage rate (APR)

Answer 1

Cost of borrowing money on an annual basis

Question 2

Brand recognition (2)

Answer 2

Consumer awareness that a particular brand exists

Part of product positioning

Question 3

Financing (2)

Answer 3

To buy an item with credit; borrowing money

Paying overtime

Question 4

Finite

Answer 4

Having a beginning and an end

Question 5

Impulse purchase

Answer 5

To buy an item without thinking about it

Question 6

Opportunity cost (2)

Answer 6

True cost of something in terms of what you have to give up to get the item

The benefits of what you would have had by taking the other action

Question 7

Rule of 78 (2)

Answer 7

Pre-payment penalty in a financing contract

The portion of “90 days same-as-cash” agreement that states the entire loan amount plus the first 90 days becomes due immediately

Question 8

Significant purchase

Answer 8

An amount of $ you spend, usually $300 or more, that causes some pain to part with

Question 9

Seek wise

Answer 9

Counsel

Question 10

Wait ____ before making a major purchase

Answer 10

Overnight

Question 11

The # of advertisements a person views daily?

Answer 11

3,000

Question 12

Buyer beware

Answer 12

Caveat emptor

Question 13

Branding

Answer 13

Creates consumer awareness for a trademark or product

Question 14

Necessities (4)

Answer 14

Utilities

Groceries

Housing

Transportation

Question 15

How does advertising affect your buying decisions? (3)

Answer 15

Branding
Shelf positioning
Color

Question 16

5 steps to follow before making a significant purchase (5)

Answer 16

1. Wait overnight
2. Consider buying motives
3. Don’t buy anything you don’t understand
4. Consider opportunity cost of $
5. Seek wise counsel

Question 17

Marketing tools (4)

Answer 17

Personal selling

Financing

Tv, radio, Internet, and over social media

Product positioning

Question 18

Product positioning (4)

Answer 18

Brand recognition

Color

Shelf position

Packaging

Question 19

what % of “90 days same-as-cash” contracts convert to payments?

Answer 19

88%

Question 20

“90 days same-as-cash” contracts are usually at what % APR with Rule of 78’s pre-payment penalty

Answer 20

24%