PFL Quiz 1: Chapter 1

Personal finance is all the financial decisions an individual or family

must make in order to earn, budget, save, spend, and give money over time.

• True

• False

A person or organization that uses a product or service.

• Accountant

• Economist

• Consumer

• Financial Advisor

Debt is....

• Money owed to you.

• Money owed to another person or company.

• Money in your savings account.

• good to have.

Credit is the granting of a loan and the creation of debt;

any form of deferred payment.

• False

• True

Prior to 1920, the only way for banks to make money by loaning money was to charge sky-high ________.

• credit

• debt

• interest rates

What is the additional cost a lender charges for borrowing their money called?

• assets

• interest

• dividends

• fees

Net worth is the .....

• amount by which the value of a person's assets exceeds or falls behind the value of their liabilities.

• financial debt or obligations

• anything owned by an individual

An asset is anything that is owned by an individual, including money in the bank or investments.

• True

• False

This is the total of all your debt, such as balances on credit cards,

student loans, personal loans, car loans, and home mortgages.

• Assets

• Liabilities

• net worth

• gross income

If the value of your assets is greater than your liabilities, you'll have a _______ net worth.

• positive

• negative

• poor

• personal