Business Mgmt. Finals Practice Exam

Who tracks all of your credit information?

• Credit reporting agencies (Equifax, Experian and TransUnion)

• Federal government

• Consumer Financial Protection Board (CFPB)

• Lenders

Which of the following statements is TRUE about compound interest?

• A) Compound interest is difficult to calculate, so those who use it earn higher profits for their efforts

• B) Compound interest means you have a fund manager who is compounding your returns without charging a fee

• C) Compound interest allows you to earn interest not only on the amount you have saved, but also on the interest you've already earned

• D) Compound interest directly impacts how much you will be charged in fees

Which description is most accurate for a Zero-Based Budget?

• You put every dollar of your net pay into a budget category each month

• You spend your checking account balance down to $0 every month

• You spend your saving account balance down to $0 every month

• You pay every one of your debts down to $0 every month

What does comprehensive coverage in auto insurance include?

• Only collision-related damages

• Damage caused by theft, fire, vandalism, or natural disasters

• Legal fees only

• Gas and oil changes

What best defines a long-term goal?

• A goal you can achieve in less than a year

• A goal that takes more than a year to accomplish

• A goal focused on everyday expenses

• A task you complete within a month

Which of the following is an example of a short-term goal?

• Retiring at age 65

• Saving for a down payment on a house in 15 years

• Saving $500 in three months for an emergency fund

• Planning for your child’s college tuition

Which of the following is an example of a fixed cost?

• Grocery expenses

• Monthly rent or mortgage payment

• Gas for your car

• Entertainment expenses

What is the marketing mix?

• A. A method of pricing products

• B. A combination of strategies involving product, price, place, and promotion

• C. A list of competitors in a market

• D. A social media marketing plan

Which of the following is a characteristic of dollar-cost averaging?

• Dollar-cost averaging is a strategy that only expert investors use

• Dollar-cost averaging is a way to decrease your risk

• Dollar-cost averaging is advantageous because earnings are untaxed

• Dollar-cost averaging is offered exclusively through robo-advisors

What is the general timeline to establish your first credit score?

• As soon as you apply for a credit card or loan

• Six months after you first actively use your credit

• Once you pay all of your credit balances in full

• Once you turn 18