Post on 01-Apr-2015
Semester Test ReviewPersonal Finance
What is an overdraft?NSF check
1
What is a certificate of deposit?
Way of saving money, there are restrictions on when you can withdraw your money.
2
State the guidelines for choosing a PIN number.
A number that nobody else could figure out.
3
What is a round lot?Stocks are traded in multiples of 100.
4
Explain the difference between a debit card and a credit card.
Debit card=way to access money in your checking account
Credit card=loan
5
The most expensive method of using a credit card.
Cash advance or convenience check
6
What does PIN stand for?Personal identification number
7
What types of public records appear on a person’s credit report?
DivorceBankruptcyLiensLawsuits
8
Why is the interest rate usually higher on credit cards than on other types of loans?
Credit cards have a high rate of default & are risky for lenders
9
What is inflation?The increase in the cost of living.
10
Which stock pays dividends first, preferred or common?
Preferred
11
What is selling short?Selling stock borrowed from a broker that must later be repaid.
12
A term for the owners of a corporation.
Shareholders or stockholders
13
List the highest bond rating.
AAA
14
A term for a bond in default.
Junk bond
15
16
When a bond is purchased for less than its face value.
Discount
17
Which type of bonds are associated with the highest interest rate? Why?
Corporate, risk
18
A risk where you could experience losses in your income or standard of living.
Personal risk
19
Why do corporations sell bonds?
To raise capital
20
A risk where there is a chance of a loss as well as a chance of a gain.
Speculative risk
21
The policyholder should be put back into the same condition as they were prior to the loss.
Indemnification
22
What is buying on margin?Using leverage
23
When a bond is purchased for more than its face value.
premium
24
A term for a person who will inherit money from another.
Heir or beneficiary
25
A loan to purchase real estate.
Mortgage
26
Added to an insurance policy to protect high value items.
Personal property floater
27
Why is it usually less expensive to take part in a group health insurance plan that purchase an individual plan?
The risk is spread among more people.
28
Another term for real estate.
Real property
29
This type of tax takes a higher percentage of your income as your income increases.
Progressive tax
30
When a bond is purchased at a premium, the yield will be ________ than the coupon rate.
Lower
31
A tax where the more you earn the less you pay.
Regressive
32
Establishing a monetary fund to cover the cost of a loss.
Self-insurance
33
A crime where a taxpayer does not pay their taxes.
Tax evasion
34
A form that lists a taxpayers total income and taxes deducted from their paycheck for a given year.
W-2
35
When a person dies without a will.
Intestate
36
The person chosen to administer a person’s will.
Executor
37
Who pays a gift tax?The giver
38
Gambling is this type of risk.
Speculative
39
When should a taxpayer itemize?
When their expenses are larger than the standard deduction.
40
A financial product where a the bank buys your house from you.
Reverse mortgage
41
Another term for a flat tax.Proportional
42
The date your income tax return must be filed by.
April 15
43
Who pays realtor’s commissions?
The seller, not the buyer.
44
When real property is transferred from the seller to the buyer.
Closing date
45
The highest price a home will bring on the market.
Market value
46
What is a canceled check?One that has been cashed.
47
An endorsement where the signature of the payee is written exactly as his or her name appears on the front of the check.
Blank endorsement
48
A term for balancing your checkbook.
Reconciling
49
A type of credit card that can only be used at a specific retailer.
Retail credit card
50
What does APR stand for?Annual percentage rate
51
List one of the 3 major credit bureaus.
ExperianTrans UnionEquifax
52
Amount of time allowed to the cardholder between the day the items are charged on the credit card and the day finance charges are applied.
Grace period
53
When can a person view their credit report for free?
Once per yearWhen denied credit due to something on their credit report
54
What does the FDIC do?Provides insurance for depositors at commercial banks
55
Income received by stockholders.
Dividends
56
The over the counter stock market.
NASDAQ
57
The largest stock exchange.
NYSE
58
An increase in the number of shares outstanding of a corporation’s stock.
Stock split
59
When an investor makes money on the sale of stock.
Capital gain
60
Elected by stockholders to guide a corporation.
Board of directors
61
These stocks do well when the economy is growing but usually do poorly in times of recession.
Cyclical stocks
62
Another term for face value.
Par value
63
Bonds with low or no rating.
Junk
64
Bond backed only by the general credit standing of a corporation.
Debenture
65
The cost of insurance.Premium
66
The possibility of a loss.Risk
67
One who calculates an insurance premium.
Actuary
68
To take measures to lessen the frequency oR severity of losses that may occur.
Reduce the risk
69
When an investor loses money on the sale of stock.
Capital loss
70
What is an attractive nuisance?
Example: trampoline or swimming pool
71
People who determine the value of property destroyed for insurance companies.
Claims adjustors
72
These people look for evidence of destroyed or damaged property.
Insurance investigators
73
Another term for self-insurance.
Risk assumption
74
Insurance that protects against loss from death.
Life insurance.
75
Being paid twice the death benefit for an accidental death.
Double indemnity
76
A front-end load.Paid when you buy the mutual fund.
77
Agreements to buy commodities at specified prices on specified dates.
Futures contracts.
78
Example of a progressive tax.
Federal income tax.
79
Items such as coins and antiques are investments known as_______.
Collectibles
80
An example of a regressive tax.
Sales tax
81
As taxable income increases, tax rates ____.
Increases
82
The difference between market value of property and what you owe on it.
Equity
83
Another term for closing costs.
Settlement costs
84
An example of a defined-benefits plan.
pension
85
A legal document authorizing someone to act on your behalf to handle personal affairs.
Power of attorney
86
An IRA that taxes contributions, but not money withdrawn at retirement.
Roth IRA
87
An apartment with one large room that serves as the kitchen, living room, bedroom, plus a bathroom.
Efficiency apartment
88
What does MLS stand for?Multiple Listing Service
89
A legal document that establishes ownership.
Title
90
The portion of the purchase price that the buyer deposits as evidence of good faith.
Earnest money
91
A formal document that expresses interest in entering into a contract with someone is a(n) _______.
Offer
92