WISE EXAM REVIEW I

Question 1

Discretionary Income

Answer 1

money left over from paying all your bills

Question 2

Emergency Fund

Answer 2

3-6 months set aside in the event of an emergency

Question 3

Fixed Expense

Answer 3

a consistent amount of income received every month

Question 4

Variable Expense

Answer 4

income that varies from month to month

Question 5

Annual Percentage Rate

Answer 5

your interest rate divided by 12

Question 6

Buying Power

Answer 6

the extent to which your money can buy good; purchasing power

Question 7

Compound Interest

Answer 7

interest that is added on to preexisting interest

Question 8

Simple Interest

Answer 8

basic interest; generally used for debt

Question 9

Federal Reserve Bank

Answer 9

sets the interest rates for banks across the U.S and is responsible for monetary policy; government ran

Question 10

ABA Number/ Check Routing Number

Answer 10

states which bank the check belongs to; the first number at the bottom left corner of the check

Question 11

ATM Card

Answer 11

acts as a debit card

Question 12

Automatic Bill Payment Service

Answer 12

A service that automatically pays your bills using money from your debit account

Question 13

Bank Statement

Answer 13

displays all of the money flowing in and out of your bank account

Question 14

Car Loan

Answer 14

a loan used to purchase a car

Question 15

Cashier’s Check/ Money Order

Answer 15

a guaranteed form of payment

Question 16

Check Cashing Centers

Answer 16

a place you can go to do things you would do at a bank; more expensive than a bank

Question 17

Certificate of Deposit

Answer 17

non-liquidable;

Question 18

Check Fraud

Answer 18

attempting to use an empty check to make a purchase

Question 19

Collateralized Loan

Answer 19

when you have a repossessable asset attached to a loan

Question 20

Credit

Answer 20

the concept of owing money

Question 21

Credit Card

Answer 21

a card used to make purchases that you don’t immediately have the money for

Question 22

Credit Union

Answer 22

non-profit, ran by its own members, has lower fees

Question 23

Debit Card

Answer 23

a card used to access money from your checking account

Question 24

Endorsement

Answer 24

a check given from one person to another

Question 25

Federal Deposit Insurance Corporation

Answer 25

a $250,000 protection provided to bank users

Question 26

Liquidity

Answer 26

how fast you can turn an asset into cash

Question 27

Most Liquidable

Answer 27

money Market, checking/ Savings Account, Cash

Question 28

Least Liquidable

Answer 28

certificate of Deposit, home, investments

Question 29

Consumer Debt

Answer 29

the concept of a consumer owing massive amounts of money

Question 30

Cosigned Loans

Answer 30

the process of an individual vouching for you when getting a loan

Question 31

FICO

Answer 31

your credit score

Question 32

FICA

Answer 32

social security

Question 33

What goes into a credit score?

Answer 33

payment history (most important), debt to income ratio, and age of account

Question 34

Due Date

Answer 34

the date your bills are due

Question 35

Finance Charge

Answer 35

all the different fees that are attached to a loan

Question 36

Short-Term Goal

Answer 36

a financial goal that can be accomplished in under a year

Question 37

Long-Term Goal

Answer 37

a financial goal that takes over a year to accomplish

Question 38

Time Value

Answer 38

the more time we give money to develop interest, the more value it has

Question 39

Money Market Account

Answer 39

a different type of savings account

Question 40

Pawn Shop

Answer 40

a business responsible for distributing collateralized loans

Question 41

Promissory Note

Answer 41

another name for a loan

Question 42

Redlining

Answer 42

discriminatory housing; illegal

Question 43

Securities

Answer 43

stocks and bonds

Question 44

Bonds

Answer 44

grows slower than stocks; less risk

Question 45

Garnishment

Answer 45

when someone takes money out of your paycheck before you receive it

Question 46

Installment Loan

Answer 46

when you owe a fixed amount of money from month to month

Question 47

Interest

Answer 47

Money added to the principal owed every month