WorksheetsPersonal Finance Finals Study Pack
Total questions: 80
Worksheet time: 52mins
This is declared when an individual is unable to pay private or business debts.
Broke
Bankruptcy
Insolvency
Liquidation
Legal state in which the courts excuse a debtor from paying some or all debt.
court ordered
bankruptcy
repossession
debt load
Eliminates most types of debt and stays on a person’s credit report for up to ten years.
chapter 13 bankruptcy
chapter 7 bankruptcy
repossession
debt
Permits debtors with regular incomes to pay all of a portion of their debts under the protection and supervision of the court.
Chapter 13 bankruptcy
Chapter 7 bankruptcy
foreclosure
debt
What type of debt cannot be wiped out by declaring bankruptcy?
student loans
taxes
alimony and child support
all of the above
Of the following, which is not a result of a credit problem?
lien
garnishment
foreclosure
good credit score
a simple interest home loan
mortgage
home inspection
realtor
offer
closing costs
Which 2 types of loans can cost you to pay more in interest than the original amount of the loan ?
Mortgage
Car Title Loans
Vehicle Bank Loan
Payday Loan
Filling out the FAFSA qualifies you for...(multiple answers)
federal grants
federal loans
work study opportunities
private loans
merit-based scholarships
Federal loans do not need to be paid back.
True
False
What does the acronym FAFSA mean?
Financial Application for Free Student Assistance
Free Application for Federal Student Aid
Free Assistance for Fast Student Approval
Formal Application for Federal Student Assistance
Does it cost money to file your FAFSA application?
Yes
No
Which is NOT a way to build your credit?
Making payments late
Putting utility bills in your name
How many credit bureaus are there?
What is considered a great credit score?
Which is NOT a way to fix your credit ?
Keep unused credit cards open
Which would be considered the highest risk investment type?
Stock
Mutual Fund
Bond
Money Market Account
Which of the following correctly orders the investments from LOWER risk to HIGHER risk?
Bond − Stock − Diversified mutual fund
Stock − Bond − Diversified mutual fund
Bond − Diversified mutual fund – Stock
Diversified mutual fund − Bond − Stock
Spreading your investments around to increase financial security
Risk assessment
Diversification
Stocks, bonds & cash
Liquidity trap
Professionally managed, diversified investment that pools resources of many investors
Treasury bonds
Stock index
Mutual fund
Saving account
What is a stock?
A loan an investor makes to a company or government that pays interest over time.
A share of ownership in a company
A collection of investments sold as a package.
An option to purchase something in the future at todays price.
A key difference between saving and investing is
Saving is for everyone, investing is for the wealthy
Your money is insured when investing, it is not in savings
Investing has a guaranteed return, savings does not
Saving is for emergencies & goals, investing is for long-term wealth
Which of the following is a disadvantage of owning stock
Potential for loss of time and effort
Penalty for early withdrawal
Low potential for return
High degree of risk
With a lending investment, investors do which of the following:
Hire a financial advisor
Maintain a minimum amount of money in the investment
Allow borrowers to use their money for a price
Avoid taking any risk
What is bankruptcy?
A point in time where everything a person owns has been given to charity
A legal proceeding involving a person or business that is unable to repay outstanding debts in which the debtor's assets are measured and evaluated, whereupon the assets are used to repay a portion of outstanding debt
When a bank is built on top of a volcano and the volcano erupts causing a bank(e)ruptcy
A legal proceeding involving a person or business that is more than capable of repaying outstanding debts in which all of the debtor's assets are measured and evaluated, and then given away to those in need
What is a credit report?
A detailed report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness
A detailed report of a bank's credit history prepared by a credit expert and used by consumers in determining a bank's creditworthiness
A report which shows which credit cards are better than others
A report invented by Allan Greenspan and credited to Al Gore
What is an interest rate?
it is your level of interest about a certain topic expressed as a percentage of your total interest
The amount in terms of dollars that you have to pay back on a purchase
it is the rate at which your interest in something expires. The higher the number, the quicker your interest expires
The amount in terms of a rate or percentage that you have to pay back on an amount borrowed
Which of the following is not a characteristic of an installment loan?
repaid over time
scheduled payments
accompanied by an interest rate
also known as a revolving loan
Revolving credit is...
a type of credit that can be used repeatedly up to a certain limit as long as the account is open and payments are made on time.
a type of credit that can be used only once up to a certain limit and must be closed immediately after all payments are due
a spinning door with money in it
a round device that holds credit cards and spins, making it easy to shuffle through all your credit cards quickly
Why is it important to start investing as soon as possible?
You take less risk when you are young, so money will be safe
You have more time for your money to compound
Investing is an easy way to make quick money
Fees on investments are cheaper when you are younger
The possibility of losing all or part of your investment is known as
asset allocation
compounding
return
risk
Generally, how is risk related to return?
the lower the risk, the greater the possibility of a high return
the greater the risk, the greater the possibility of a high return
the greater the risk, the greater the possibility of a low return
risk and return have no relationship
A single share of ownership of a company is called a:
Bond
Mutual Fund
Annuity
Stock
Stocks are low risk investments options.
True
False
Leaving your investments in the stock market alone for at least five years is a good way to reduce risk because…
It allows your investments to earn more interest
Fees are waived for investments held for over five years
You get a bonus from the company if you invest for five years
It keeps you from reacting to dips in the market and selling at too low of a price
Which government security has the shortest maturity date?
Treasury Trusts
Treasury Notes
Treasury Bills
Treasury Bonds
Suzy is looking to invest in mutual funds and wants a fund with unlimited shares. Which type of mutual fund should Suzy consider?
Preferred fund
Open-end fund
Closed-end fund
Limited fund
Which of the following factors can negatively impact your credit score?
Vladimir has deposited $500 in the bank. The money is earning 5% interest a year. Using simple interest, how much money will be in Vladimir's account after 1 year. (Assuming he makes no more deposits and does not spend any of the funds)
$500
$550
$525
$475
Ideally how many months should your emergency fund cover of expenses?
6-12 months
1-2 months
3-6 months
9-12 months
Jules has deposited $800 in the bank. The money is earning 5% interest a year. Using simple interest formula, how much money will be in Jules account after 2 years?. $800 x 0.5 x 2
$720
$840
$800
$880
Devante wants to purchase a new video and cannot wait until it goes on sale tomorrow. What type of behaviour is Devante demonstrating?
Instant gratification
Delayed gratification
Savings incentive
Sales tax discount
Which of the following is a common form of credit?
Long-term disability insurance (LTD) is an insurance policy that protects an employee from loss of income in the event that he or she is unable to work due to illness, injury, or accident for a long period of time
True
False
If you are shopping, how could a criminal most likely steal your credit and debit card number?
Pretexting
Phishing
Dumpster Diving
Skimming
Liability insurance is designed to cover an individual held responsible for the loss or damage of someone else's property or for bodily injury of another person.
True
False
Which type of bankruptcy restructures debt but does not forgive it?
Chapter 11
Chapter 9
Chapter 7
Chapter 13
Sam has a FICO score between 575-625. As his credit counselor, what recommendations would you make to Sam to improve his credit score?
Continue making new charges on his cards and don’t worry about the debt.
Set up automatic, online bill payments.
Do not worry about missing any more payments.
Work on paying off the debt on his lower interest card first.
What do lenders use to make decisions about whether or not to offer your credit (such as a credit card or loan)
Credit classifications
Credit notifications
Credit scores
Credit cards
What is the best method of choosing a (financial) counseling service?
Choose one based merely on television or phone-book ads.
Choose one that charges you extra fees and asks unrelated personal information.
Choose one that claims it can fix your credit for you.
Choose one that is recognized by a state’s Attorney General.
Which law guarantees that consumers can obtain an annual free credit report from each major credit reporting agency?
Fair Debt Collection Practices Act (1977)
Fair Credit Billing Act (1974)
Fair Credit Reporting Act (1971)
Fair and Accurate Credit Transactions Act (2003)
Creditors are interested in whether you have used credit wisely in the past. Which of the 5Cs of Credit does this statement represent?
Conditions
Capacity
Character
Capital
What impact do you think grade point average (GPA) might have on the college you attend and how much you will have to pay?
The lower the GPA, the more likely you are to obtain a scholarship.
The higher the GPA, the more likely you are to obtain a scholarship.
The lower the GPA, the least likely you are to obtain the dorm of your choice.
The higher the GPA, the least likely you are to obtain the dorm of your choice.
With regard to federal student loans, what is a grace period?
Time during which you can take out more student loans and never have to pay them back.
Time during which you don’t have to make a monthly payment on a student loan.
Time during which you don’t have to go to class every day.
Time during which you are allowed to cancel all your student loans.
Interest rate and amount of principal influence the lender's desire to finance the borrower. Which of the 5Cs of Credit does this statement represent?
Collateral
Conditions
Character
Capacity
What is risk?
The possibility of incurring a loss
The amount paid out of pocket before insurance benefits kick in
The possibility of earning money
The amount charged for an insurance policy
James has a life insurance policy. Who will receive the benefits in the event of his death?
Beneficiary
Premium
Policyholder
Dependent
Which law guarantees that consumers must be fully informed of all costs and conditions associated with loans and borrowing?
Truth in Lending Act (1968)
Fair Credit Reporting Act (1971)
Fair Credit Billing Act (1974)
Fair Debt Collection Practices Act (1977)
