Financial Vocabulary

An Adjustable-Rate Mortgage (ARM) is:

• a type of mortgage in which the interest rate applied on the outstanding balance varies throughout the life of the loan.

• a fixed-rate mortgage where the interest rate remains the same throughout the life of the loan.

• a mortgage that requires no down payment.

• a mortgage that is only available to first-time homebuyers.

A 401(k) Loan is:

• A loan taken from a retirement savings plan

• A type of mortgage loan

• A personal loan from a bank

• A loan for purchasing a car

Amortization means:

• The process of gradually writing off the initial cost of an asset

• The increase in value of an asset over time

• The process of buying an asset

• The immediate expense of an asset

An Annual Fee is:

• A fee charged once a year for services or membership.

• A monthly subscription fee.

• A one-time setup fee.

• A penalty for late payment.

The Annual Percentage Rate (APR) is:

• a measure of the cost of credit, expressed as a yearly interest rate

• the total amount of interest paid over the life of a loan

• the monthly payment amount on a loan

• the principal amount of a loan

An Authorized User is:

• A person who has permission to access certain resources

• A person who is not allowed to access any resources

• A person who can authorize others

• A person who has no responsibilities

A Balance Transfer is:

• a type of loan

• a transfer of funds between accounts

• a method to pay off credit card debt

• a way to earn interest

A Cash Advance is:

• a loan taken out against a credit card's available balance.

• a type of investment in stocks.

• a savings account with a bank.

• a method of transferring money internationally.

What is Cash Back?

• A type of reward program that refunds a percentage of the amount spent on purchases.

• A fee charged for using a credit card.

• A penalty for late payments.

• A type of loan offered by banks.

A Charge Card is:

• a type of credit card that requires the balance to be paid in full each month

• a debit card that allows overdraft

• a prepaid card with a fixed limit

• a card used exclusively for online purchases