Personal Finance - Review for Final

Credit worthiness is MOST AFFECTED by which of the following?

• whether or not one owns a house

• payment history on current loans

• job history showing many different types of jobs

• the amount of funds currently available in a savings account

Stanley has an automobile insurance policy for which he is billed $220 four times per year. Which term is used to refer to that cost?

• premium

• surcharge

• deductible

• co-payment

Ashley recently secured a $5,000 loan from a bank with a 5% annual interest rate. Barry is applying to borrow that same amount from the bank. Under which circumstances would Barry MOST LIKELY get a higher interest rate for his loan?

• He has a lower income and fewer debts than Ashley.

• He has a higher income and less assets than Ashley.

• He has a higher income and more assets than Ashley.

• He has a lower income and greater debts than Ashley.

Which of the following investments consists of multiple securities?

• mutual fund

• common stock

• corporate bond

• savings deposit

What is the MAIN advantages of depositing money in a certificate of deposit (CD)?

• The money in a CD is less accessible.

• The money in a CD is not subject to fees.

• CD's earn a higher interest rate than other savings accounts.

• Banks offer CD's with a variety of maturity dates and interest rates.

Which of the following changes in an insurance policy can help reduce premium costs by reducing coverage costs to insurers?

• lower caps

• higher premiums

• lower co-payments

• higher deductibles

Which factor MOST LIKELY tend to drive up loan interest rates for an individual seeking a bank loan?

• The individual has large amounts of savings.

• The individual has switched jobs fairly often.

• The individual has borrowed large sums of money before.

• The individual has a high debt-to-income ratio.

How are shareholders affected by rising stock prices?

• They gain credit toward the purchase of additional stocks.

• The value of their stock changes and they may sell shares for profit.

• They may be asked to pay an additional fee for the stocks they own.

• They earn the difference between the buying price and the current value.

Car insurance companies often charge higher premiums to which of the following groups because statistics show that this group of drivers has the most accidents?

• married males over 70

• married females over 70

• unmarried males under 25

• unmarried females under 25

What factor has the MOST effect on people's credit scores?

• personal interests

• geographic location

• loan repayment history

• specific job responsibilities