What does APR or Annual Percentage Rate include?

Interest rate + additional fees/costs

An excellent credit score will help with which aspect of car financing?

Getting lower interest rates and better loan terms

Getting a higher down payment requirement

Receiving a discount on the purchase price

Your parents can allow you to use their credit score and credit by doing what?

Adding you as an authorized user on their credit card account

Transferring their credit card debt to your name

Opening a new credit card in your name

Sharing their credit card PIN with you

What is a secured credit card?

A secured credit card requires a security deposit as collateral.

A secured credit card has no credit limit

A secured credit card does not require a security deposit

A secured credit card offers cashback rewards

Why do credit card companies prefer you make the minimum monthly payment?

To earn more interest over time as you carry a balance.

To help you pay off your balance faster

To encourage responsible financial behavior

To prevent you from accumulating debt

What are the two most important factors that influence your credit score?

Number of credit inquiries and types of credit used

Credit limit and age of credit history

Income level and employment status

Which is best to put your money in for short-term goals?

High-yield savings account or short-term certificate of deposit (CD)

What is a good investment for a retirement?

Diversifying your portfolio with a mix of stocks, bonds, real estate, low-cost index funds, and target-date funds.

Keeping all your savings in a low-interest savings account

Investing in a pyramid scheme promising high returns

Putting all your money into a single high-risk stock

How does compounding interest work?

Compounding interest works by calculating interest on the initial principal amount as well as on the accumulated interest from previous periods.

Compounding interest works by calculating interest only on the initial principal amount.

Compounding interest works by calculating interest on the accumulated interest only.

Compounding interest works by calculating interest on the initial principal amount but not on the accumulated interest.

What is a mutual fund?

A mutual fund is an investment vehicle consisting of a portfolio of stocks, bonds, or other securities managed by a professional investment company.

A mutual fund is a type of bank account

A mutual fund is a type of insurance policy

A mutual fund is a type of cryptocurrency

A stock is a form of investment security that signifies part ownership in a corporation.

A stock is a type of soup commonly served in restaurants.

A stock is a type of musical instrument.

A stock is a type of clothing accessory worn on the head.

What does it mean to "diversify" your investments?

Spreading investments across different types of assets like stocks and bonds to reduce risk.

Investing only in one sector of the economy, such as in tech companies.

Ignoring market trends and fluctuations and investing all your money.

Putting all your money in one investment

What is a company match 401k?

A company match 401k is a retirement savings plan where an employer contributes a certain amount to an employee's 401k account based on the employee's own contributions.

A company match 401k is a type of health insurance plan offered by employers

A company match 401k is a type of employee bonus based on performance

A company match 401k is a tax deduction for charitable donations

A Roth IRA is a retirement account where contributions are made with after-tax dollars, and qualified withdrawals are tax-free.

A Roth IRA is a form of insurance policy

A Roth IRA is a savings account with high-interest rates

A Roth IRA is a type of credit card

What is a Traditional IRA?

A Traditional IRA is a type of individual retirement account that allows individuals to save for retirement with tax-deferred growth on their investments.

A Traditional IRA is a type of student loan program

A Traditional IRA is a type of credit card with cashback rewards

A Traditional IRA is a type of savings account for short-term goals

What are index funds?

Index funds are investment funds that aim to track the performance of a specific market index, such as the S & P.

Index funds are investment funds that focus on commodities trading.

Index funds are investment funds that aim to outperform the market index.

Index funds are investment funds that aim to track the performance of individual stocks.

How is Social Security funded?

Through payroll taxes collected from employees, employers, and self-employed individuals

What is an insurance premium?

The amount of money paid for an insurance policy.

The deductible amount in an insurance policy.

The total coverage amount of an insurance policy.

The interest rate applied to an insurance policy.

What is an insurance deductible?

The amount of money you have to pay out of pocket for covered services before your insurance starts to pay.

The total cost of the insurance policy

The premium paid by the insured

The amount paid by the insurance company

What is comprehensive auto insurance?

Comprehensive auto insurance provides coverage for theft, vandalism, natural disasters, and other non-collision incidents.

Comprehensive auto insurance provides coverage for medical expenses only.

Comprehensive auto insurance is only applicable to new cars.

Comprehensive auto insurance only covers collision incidents.

What is collision-only auto insurance?

Collision-only auto insurance covers damages to your own vehicle resulting from a collision with another vehicle or object.

Collision-only auto insurance covers damages to other vehicles only

Collision-only auto insurance covers damages from natural disasters

Collision-only auto insurance covers damages to your vehicle from theft

If you are young and healthy, which type insurance plan may be best for you?

High-deductible health plan (HDHP) with a low monthly premium.

Low-deductible health plan with no savings account

High-deductible health plan with a Flexible Spending Account (FSA)

Why do insurance companies use risk pooling?

To spread the financial risk of individual policyholders across a larger group.

To limit the number of policyholders

To increase the cost of premiums

To decrease the coverage provided

What is a health insurance copay?

A health insurance co-pay is a fixed amount that an insured person pays for covered medical services.

A health insurance co-pay is a one-time fee paid at the beginning of each insurance term.

A health insurance co-pay is a percentage of the total cost of medical services paid by the insured person.

A health insurance co-pay is a refund given to the insured person for unused medical services.

What are payday lenders?

Financial institutions providing short-term, high-interest loans due on the borrower's next payday.

Charitable organizations providing free financial education

Online platforms for long-term investments

Government agencies offering low-interest loans

EPF Unit 7 Review: Credit, Investing, and Insurance

Authored by Mark Carson

Social Studies

11th Grade

Used 2+ times

EPF Unit 7 Review: Credit, Investing, and Insurance

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It leads to better financial management and higher interest rates.

It allows for more debt accumulation and a negative credit history.

It helps increase interest charges and lower credit score.

It helps avoid interest charges and maintain a good credit score.

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EPF Unit 7 Review: Credit, Investing, and Insurance

Amount charged for a loan or earned on a savings account?

What do you call the original sum of money borrowed in a loan?

A card issued by a bank that allows you to use money from your account is called a...?

What is a prepaid card?

What is a credit card?

Why is it best to pay more than the minimum payment each month on a credit card?

Why is it best to pay off your entire credit card balance monthly?

This box of credit/loan information is called a (an)______________?

If you get a cash advance on this credit card, what will your APR (Annual Percentage Rate) be?

What APR will you pay during the first 15 billing cycles as a new customer?

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