Personal Finance Study Guide

The opportunity cost in collecting money for savings in a glass jar is

• ability to use the money at any time

• interest the money could have earned in a savings account at a bank

• cost of a glass jar

• time spent counting it

Which sentence BEST describes a title pawn lender?

• They require lengthy credit checks for a fixed long-term loan

• They lend money on the equity accrued on ones home value

• They have lower APR's when compared to commercial banks

• They are designed to be quick and convenient while continuing the use of one's vehicle

Suppose Evan inherits 10,000 shares of common stock in Company ABC. Assuming this company stays profitable and Evan decides to hold on to all 10,000 shares, he will likely receive:

• regular interest payments from Company ABC

• capital gains from Company ABC

• Certificates of Deposit from Company ABC

• Dividends from Company ABC

The income that results from saving money in a bank is called:

• wages

• rents

• interest

• dividends

The BEST example of a progressive tax in the United States is:

• the federal excise tax on gasoline

• the Social Security tax

• the federal personal income tax

• state sales taxes

What kind of tax is paid as a percentage of the value of a homeowner's home?

• sales tax

• excise tax

• property tax

• mortgage tax

In 1991, the Secretary of Labor appointed a commission to determine skills people need to succeed in the world of work in a document called the SCANS report. In the "Interpersonal Competency" section, the report outlined the following skills: teaches others new skills, works with diversity. These skills require workers to:

• work well with other employees

• acquire and evaluate information

• work with a variety of technologies

• identify, organize, and allocate resources

Ken makes $50,000 per year and Kirby makes $30,000 per year. Ken pays a higher average tax rate on his income that Kirby. This implies that taxes on income are:

• regressive

• proportional

• progressive

• marginal

The main difference between a credit union and a commercial bank is that:

• only commercial banks offer checking account services to its members

• commercial banks make loans, but don't offer checking or savings account services

• credit unions don't make home and car loans, whereas commercial banks do make car and home loans

• credit unions are only available to specific customers, but commercial banks are open to everyone

Bob has $25,000 that he would like to invest in a diversified manner. Bob's best investment option to accomplish this goal would be to:

• purchase $25,000 worth of a company's stock

• purchase $25,000 worth of zero-coupon bonds

• purchase $25,000 worth of shares in a mutual fund

• purchase $25,000 worth of US government securities