Final Exam - Personal Finance Semester 2

Multiple Choice

If you wanted to know what factors contributed to your credit score, how could you find out?

• Check your credit report.

• File a credit claim.

• Call your credit card company.

Multiple Choice

Why should you stay away from borrowing up to your credit limit?

• Because you're riding to the danger zone.

• Because Dave Ramsey said so.

• Because it reflects poorly on your credit score.

Multiple Choice

Which of the following deductions are you most likely to see on your pay stub?

• Auto insurance deduction

• Office cupcake deduction

• Social Security deduction

Multiple Choice

What is the main purpose of the dual accounting method?

• To help you think twice about purchases.

• To help you double check what you are spending your money on by confirming all receipts.

• To record every transaction twice, reflecting them in accounts and in your budget.

Multiple Choice

You find evidence that your identity has been stolen. Who sould you contact first?

• 911

• The Federal Trade Commision

• Your local bank or credit union

Multiple Choice

What is a "hard inquiry"?

• The document that you must fill out when you apply for a loan.

• When a financial institution requests information about your credit history for the purpose of extending more credit.

• A note that is added to your bank account when you are withdrawn over your limi.

Multiple Choice

Which of these is not identity theft?

• Someone uses your identity to benefit financially.

• Someone steals your credit card and goes on a shopping spree.

• A scammer poses as a representative from a charity and asks for money.

Multiple Choice

Which of the following shows up on your credit report?

• How many open accounts you have

• Your payment history

• Both A & B

Multiple Choice

What is a debt-to-income ratio?

• The ratio of your debt compared to your annual income.

• Something that lenders look at on your credit report.

• Both A & B

Multiple Choice

You hit a deer while driving. The deer is fine but your car is not. What kind of insurance must you have in order for the damage to be covered?

• Liability.

• Comprehensive.

• Collision

Multiple Choice

Which of the following is true about tax returns?

• You must have an accountant sign off that you filed correctly to get your return.

• The number of exemptions you declare will affect if and how much you get on your return.

• The more you pay for tax filing services, the more you will get on your tax return.

Multiple Choice

Why would you want to claim an exemption on your pay stub?

• It will reduce the money you have to pay for insurance.

• It will give your employer permission to put some of your earnings in a 401(k).

• It will lower the amount of taxable income you have.

Multiple Choice

What does APR stand for?

• Annual Percentage Rate

• Amortized Payoff Rate

• Annual Principal Return

Multiple Choice

What percentage of a home price is typically required for your down payment if you wnat to avoid purchasing private mortgage insurance (PMI)?

• 15 percent

• 18 percent

• 20 percent

Multiple Choice

You bought $230 in clothes and charged it to your credit card. What happens if you do not pay the balance off by the end of the month?

• You'll get an exemption on your credit report.

• You'll see an increase in your interest rate.

• You'll start to accrue interest on your credit card balance.

Multiple Choice

What would be the main benefit of paying in cash for a car instead of taking out a loan?

• You don't have to pay interest because you won't have a loan.

• the price of the car is always 5% less when you pay in cash.

• Paying in chash will give a boost to your credit score.

Multiple Choice

You don't have dependents. Do you still need life insurance?

• Yes; it will make health insurance more affordable.

• No; the government will pay for your expenses.

• Yes; it can pay for medical and funeral costs.

Multiple Choice

What is a 401(K)?

• A retirement plan that automatically saves part of your tax return each year.

• The more you pay for tax filing services, the more you will get on your tax return. A measurement of how much money you've contributed from your paycheck to taxes for the year.

• An employer sponsored retirement plan where you contribute some of your paycheck.

Multiple Choice

What is the best protection against uninsured drivers?

• There is none

• Uninsured motorist coverage

• Comprehensive insurance

Multiple Choice

Which of the following is true about car loan terms?

• The shorter the term, the higher the interest rate.

• The shorter the term, the lower the interest rate.

• The longer the loan term, the lower the rate.

Multiple Choice

In order to qualify for a mortgage with good rates, you have to have a high enough ____________.

• Credit score

• Rate of return

• Credit report

Multiple Choice

When you apply for a mortgage, the lending institution will likely use your gross income to help decide if you qualify. What is that?

• Your income after taxes are taken out.

• Your income before taxes are taken out.

• The income you earn from investments and interest bearing accounts.

Multiple Choice

You got in a car accident and repairs will cost $3,000. After filing your insurance claim, you only paid $500. Why?

• That's all you budgeted for car repairs.

• Your deductible is $500.

• Your exemption is up to 18%.

Multiple Choice

Your _______ is the amount you own in assets minus everything you owe.

• Net Worth

• Net Income

• Personal Return

Multiple Choice

When buying something with a loan, you can lower the amount youpay each month by paying a higher __________.

• Interest rate

• Deductible

• Down payment