Personal Finance - Final Review

A 4 year college degree is the only pathway to financial success

• TRUE

• FALSE

The only thing that impacts your credit score is making your payments on time.

• TRUE

• FALSE

An unsolicited attempt to obtain personal information from an individual through e-mail is best described as

• STEALING

• SCAMMING

• PHISHING

• PLAGIARIZING

A student can buy a phone for $500 or invest the $500 in a brokerage account. If the student buys the phone, the foregone investment opportunity is considered a(n) _________________.

• resource

• opportunity cost

• bad choice

• scarcity

Answer explanation

We covered this at the beginning of the semester when we talked about needs vs. wants.

A trade-off was what you give up to get something else.

The opportunity cost was the value of the thing that you gave up in the trade-off.

Which of the following likely has the highest potential investment return over a long time horizon?

• corporate bonds

• certificates of deposit

• checking account

• stocks

You should never borrow money for any reason.

• TRUE

• FALSE

The person to whom a check is written is called the

• depositor

• lender

• payor

• payee

A Budget is best prepared by listing all the things you would like to buy, and then figuring our how to earn enough income to pay for them all.

• TRUE

• FALSE

Answer explanation

When you budget, you start with your income and then deduct your expenses.

If you started with everything you wanted to buy, you would never have enough income to buy it all!

You are borrowing money when you use a credit card.

• TRUE

• FALSE

With reference to an investment, risk and return generally are _____________ related.

• not

• negatively

• positively

• never

Answer explanation

Risk and return are POSITIVELY related ---

the more risk you take, the more return you COULD earn.

the less rick you take, the smaller return you COULD earn.