Chapter 16 Quiz

TRUE or FALSE? Credit cards are an investment.

• T

• F

Which of the following is NOT an example of a fixed expense?

• mortgage payment

• rent payment

• car insurance payment

• groceries

What is the MOST common method used in the U. S. to become a home owner?

• save for the purchase

• borrow most of the money

• get the house as a gift

• pay in cash

What are the negative results of writing checks that total more than the money left in the bank account?

• The bank charges you a fee.

• The person or company to whom you wrote the check charges you a fee.

• You have to make the check good.

• all of the above

Why is maintaining a good credit history important?

• A person with a poor credit history and low credit score may find it hard to get more credit.

• Credit scores measure how likely a person is to pay off a loan and credit score is based on a person’s credit history.

• Potential employers may check credit history before offering a job.

• all of the above

Which of the following are examples of variable expenses? Select ALL that apply.

• mortgage payment

• rent payment

• concert tickets

• groceries

An investment is money spent on something with the goal of making more money in the future. Which of the statements below is TRUE of investing?

• A financial investment involves putting money into things like stocks and bonds, CDs and mutual funds.

• A real investment involves putting money into something physical such as real estate or equipment.

• Both investments are totally safe.

• Both investments have some level of risk that would cause loss of value.

What are some of the consequences of not being able to pay off your credit? Select ALL that apply.

• higher credit score

• repossession of the thing bought on credit

• lower credit score

• bad credit report

Match the finance term to its definition.

• a plan for how money will be used

• Expenses

• money that will be spent

• Income

• Money that is earned or received

• Budget

Match the account type to its description.

• an account to put aside money

• checking account

• an account designed to pay for things

• investment account

• an account designed to earn money

• savings account

• an account using borrowed money

• credit