MONEY MANAGEMENT FINAL EXAM TEST REVIEW. MONEY MANAGEMENT UNIT 1 – Test Review Choosing, Planning...

MONEY MANAGEMENTMONEY MANAGEMENT

FINAL EXAM TEST REVIEWFINAL EXAM TEST REVIEW


UNIT 1 – Test ReviewUNIT 1 – Test ReviewChoosing, Planning and Keeping a Choosing, Planning and Keeping a

CareerCareer

A general term for advances resulting A general term for advances resulting from improvements in technical from improvements in technical processes that increase productivityprocesses that increase productivity– TECHNOLOGYTECHNOLOGY

Sick pay, vacation time, and profit Sick pay, vacation time, and profit sharing are all examples of:sharing are all examples of:– BENEFITSBENEFITS

One who organizes, One who organizes, manages and assumes the manages and assumes the risk of a business risk of a business enterprise.enterprise.

–ENTREPRENEURENTREPRENEUR

The things in your life that you consider to The things in your life that you consider to be important to you are called:be important to you are called:– VALUESVALUES

The way you choose to live your life, which The way you choose to live your life, which is based on your values, is called:is based on your values, is called:– LIFESTYLELIFESTYLE

A natural physical or mental ability is a(n)A natural physical or mental ability is a(n)– APTITUDEAPTITUDE

Individual qualities and traits which make Individual qualities and traits which make you a unique person are known asyou a unique person are known as– PERSONALITYPERSONALITY

When a person designs his or her lifestyle When a person designs his or her lifestyle around a job so that he or she cannot around a job so that he or she cannot afford to change jobs… this is known as afford to change jobs… this is known as being __________________.being __________________.– LOCKED INLOCKED IN

A letter that explains how you are qualified A letter that explains how you are qualified for a job, impresses the employer as to for a job, impresses the employer as to your interest and desire for the job, and your interest and desire for the job, and asks for an interview is called a(n)asks for an interview is called a(n)– LETTER OF APPLICATIONLETTER OF APPLICATION

A summary of skills, education, work A summary of skills, education, work history and personal information that history and personal information that qualifies you for a job is called a qualifies you for a job is called a – RESUMERESUME

When you talk to your potential employer When you talk to your potential employer about your qualifications for a particular about your qualifications for a particular job that is called a job that is called a – JOB INTERVIEWJOB INTERVIEW

A form that you fill in with requested job A form that you fill in with requested job related information is knows as a(n)related information is knows as a(n)– JOB APPLICATIONJOB APPLICATION


UNIT 2 – Test ReviewUNIT 2 – Test ReviewUnderstanding Paychecks, Benefits, Understanding Paychecks, Benefits, Employee Taxes, and Tax ReturnsEmployee Taxes, and Tax Returns

Persons claimed that reduce the amount Persons claimed that reduce the amount of tax withheld from your paycheck.of tax withheld from your paycheck.– ALLOWANCESALLOWANCES

When you report to work, you will be When you report to work, you will be asked to fill out a form declaring how asked to fill out a form declaring how many allowances you are going to claim. many allowances you are going to claim. What is that form called?What is that form called?– W-4W-4

CHAPTER FIVE

A permanent work identification number. A permanent work identification number. All American workers should have one:All American workers should have one:– SOCIAL SECURITY NUMBERSOCIAL SECURITY NUMBER

A social insurance program that covers the A social insurance program that covers the nation’s work force. It provides retirement, nation’s work force. It provides retirement, disability and survivor benefits to those disability and survivor benefits to those qualified.qualified.– SOCIAL SECURITYSOCIAL SECURITY

Lists income that you received during the year Lists income that you received during the year and all the amounts withheld from your and all the amounts withheld from your paycheck. Mailed to you by your employer.paycheck. Mailed to you by your employer.– W-2 FormW-2 Form

Your employer must mail you your W-2 by what Your employer must mail you your W-2 by what date?date?– JANUARY 31STJANUARY 31ST

When do you have to have your federal income When do you have to have your federal income tax return filed by?tax return filed by?– APRIL 15thAPRIL 15th

What is the name of the employment law that set What is the name of the employment law that set the minimum wage and the rules regarding the minimum wage and the rules regarding overtime.overtime.– FAIR LABOR STANDARDS ACTFAIR LABOR STANDARDS ACT

Federally mandated program that provides Federally mandated program that provides that every state must have a program in that every state must have a program in place to protect workers who lose their job place to protect workers who lose their job through no fault of their own.through no fault of their own.– UNEMPLOYMENT COMPENSATIONUNEMPLOYMENT COMPENSATION

The legally established lower limit on The legally established lower limit on wages that employers must pay. wages that employers must pay. – MINIMUM WAGEMINIMUM WAGE

Number of hours in the standard work Number of hours in the standard work week. week. – 40 HOURS40 HOURS

Employers must pay hourly employees Employers must pay hourly employees extra money for working more than 40 extra money for working more than 40 hours. That rate is:hours. That rate is:– 1 ½ TIMES THEIR REGULAR PAY RATE1 ½ TIMES THEIR REGULAR PAY RATE

The name for laws that give financial The name for laws that give financial security to worker’s and their families security to worker’s and their families for injuries, illness, loss of income, or for injuries, illness, loss of income, or death that occurs as a result of your death that occurs as a result of your job or working conditions. job or working conditions. – WORKER’S COMPENSATIONWORKER’S COMPENSATION

CHAPTER SIXCHAPTER SIX

The total pay before any deductions are The total pay before any deductions are made is known asmade is known as– GROSS PAYGROSS PAY

_________________ is defined as hours _________________ is defined as hours worked beyond regular hours.worked beyond regular hours.– OVERTIMEOVERTIME

Amounts subtracted from your gross pay:Amounts subtracted from your gross pay:– DEDUCTIONSDEDUCTIONS

The amount left when all the The amount left when all the deductions are subtracted from your deductions are subtracted from your gross pay:gross pay:– NET PAYNET PAY

Company provided supplements to Company provided supplements to income are known as:income are known as:– BENEFITSBENEFITS

Extras that companies offer to improve Extras that companies offer to improve employee morale and working conditions. employee morale and working conditions. Examples might include store discounts, Examples might include store discounts, company car etc….company car etc….– PERKSPERKS

When employers allow you to leave your job, When employers allow you to leave your job, without pay, for a period of time with a guarantee without pay, for a period of time with a guarantee that you will get your job back.that you will get your job back.– LEAVE OF ABSENCELEAVE OF ABSENCE

Employer provided retirement plan. Employer provided retirement plan. – PENSIONPENSION

CHAPTER SEVENCHAPTER SEVEN

Largest source of government revenue is:Largest source of government revenue is:– INCOME TAXINCOME TAX

Taxes that increase in proportion to your Taxes that increase in proportion to your income are known as:income are known as:– PROGRESSIVE TAXESPROGRESSIVE TAXES

An example of a progressive tax that we An example of a progressive tax that we discussed in class.discussed in class.– FEDERAL INCOME TAXFEDERAL INCOME TAX

Taxes that decrease in proportion to income:Taxes that decrease in proportion to income:– REGRESSIVE TAXESREGRESSIVE TAXES

An example of a regressive tax that we An example of a regressive tax that we discussed in class:discussed in class:– SALES TAX OR EXCISE TAXSALES TAX OR EXCISE TAX

Taxes where the % taxes stays constant even Taxes where the % taxes stays constant even though the amount being taxed increases though the amount being taxed increases – PROPORTIONAL TAXESPROPORTIONAL TAXES

An example of a proportional tax that we An example of a proportional tax that we discussed in class:discussed in class:– PROPERTY TAXPROPERTY TAX

Administrative agency in charge of collecting Administrative agency in charge of collecting income taxes and enforcing tax laws:income taxes and enforcing tax laws:– INTERNAL REVENUE SERVICEINTERNAL REVENUE SERVICE

When the government spends more than it When the government spends more than it brings in with revenue it has a:brings in with revenue it has a:– DEFICITDEFICIT

When the government brings in more than it When the government brings in more than it spends it has a:spends it has a:– SURPLUSSURPLUS

Easiest tax form to fill out:Easiest tax form to fill out:– 1040EZ1040EZ


UNIT 3 – Test ReviewUNIT 3 – Test ReviewBudgeting and Budgeting and

Managing a Checking AccountManaging a Checking Account

CHAPTER EIGHT CHAPTER EIGHT

QUESTION: QUESTION:

– A plan for spending and saving moneyA plan for spending and saving money

ANSWER:

Budget


QUESTION: QUESTION:

– Name the three major categories included in Name the three major categories included in most budgets?most budgets?

ANSWER:

Income, Savings, and Expenses


QUESTION: QUESTION:

– Amount of money earned before taxes is Amount of money earned before taxes is known as?known as?

ANSWER:

Gross Income


QUESTION: QUESTION:

– Amount of money earned before after taxes Amount of money earned before after taxes is known as?is known as?

ANSWER:

Net Income


QUESTION: QUESTION: – Assuming a Gross Salary of $100,000 and a tax rate of Assuming a Gross Salary of $100,000 and a tax rate of

25%: 25%: What is your Gross Income?What is your Gross Income?What is your total income tax bill?What is your total income tax bill?What is your Net Income?What is your Net Income?

ANSWER: Gross Income = $100,000 Income Taxes = $25,000 Net Income = $75,000


QUESTION: QUESTION:

– Unspent income is known as?Unspent income is known as?

ANSWER:

Savings


QUESTION: QUESTION:

– What are three types of savings?What are three types of savings?

ANSWER:

Short-term (new shoes), Long-Term (house), Retirement, Emergencies


QUESTION: QUESTION:

– A cost to meet a need or pay a debt.A cost to meet a need or pay a debt.

ANSWER:

Expense


QUESTION: QUESTION:

– There are three types of expenses? What There are three types of expenses? What are they?are they?

ANSWER:

Fixed, Variable and Discretionary


QUESTION: QUESTION:

– A cost that occurs regularly and doesn’t vary in A cost that occurs regularly and doesn’t vary in amount is known as a:amount is known as a:

– Give two examples:Give two examples:

ANSWER:

Fixed Expense Rent, Car Payment etc…


QUESTION: QUESTION:

– A cost that occurs regularly but varies in amount is A cost that occurs regularly but varies in amount is known as a:known as a:


ANSWER:

Variable Expense Phone, Electricity, Groceries etc…


QUESTION: QUESTION:

– A cost that is determined by personal wants and A cost that is determined by personal wants and needs:needs:


ANSWER:

Discretionary Expense Vacations, Entertainment, Clothes


QUESTION: QUESTION:

– The value of what you had to give up to The value of what you had to give up to

pursue another option is known as?pursue another option is known as?

ANSWER: Opportunity Cost

CHAPTER NINE CHAPTER NINE

QUESTION: QUESTION:

– Banking service where you deposit money into Banking service where you deposit money into

it, and can then write drafts to people or it, and can then write drafts to people or

businesses to pay off money owed?businesses to pay off money owed?

ANSWER: A checking account


QUESTION: QUESTION:

– There are a lot of questions you should ask There are a lot of questions you should ask

before opening up a checking account? Name before opening up a checking account? Name

one?one?

ANSWER: Minimum balance? ATM card? Debit

Card? Direct deposit? Free Checks? Etc…


QUESTION: QUESTION:

– A check that the bank has already A check that the bank has already

processed and paid out?processed and paid out?

ANSWER: Cancelled check (or cleared check)


QUESTION: QUESTION:

– When you don’t have enough money in When you don’t have enough money in

your account to cover a check?your account to cover a check?

ANSWER: Overdraft (or bounced check)


QUESTION: QUESTION:

– When you know you don’t have enough money When you know you don’t have enough money

to cover a check but you send it anyway, hoping to cover a check but you send it anyway, hoping

to make a deposit before the check clears.to make a deposit before the check clears.

ANSWER: Floating a check


QUESTION: QUESTION:

– A form that you fill out when you open your A form that you fill out when you open your

checking account. Provides the bank with a checking account. Provides the bank with a

record of how you sign your name.record of how you sign your name.

ANSWER: Signature Card

Parts of a checkParts of a check

NAME

ADDRESS


QUESTION: QUESTION:

– A form you fill out when you are depositing A form you fill out when you are depositing

money into your checking account.money into your checking account.

ANSWER: Deposit Slip


QUESTION: QUESTION:

– A personal record of all your deposits and A personal record of all your deposits and

withdrawals should be kept in your:withdrawals should be kept in your:

ANSWER: Checkbook Register


QUESTION: QUESTION:

– What are examples of logical reasons your What are examples of logical reasons your

checkbook balance doesn’t match your bank checkbook balance doesn’t match your bank

statement balance?statement balance?

ANSWER: Outstanding checks (you wrote them but they haven’t been

cashed yet) Outstanding deposits (you deposited them after the bank

statement was mailed) ATM withdrawals or service fees that you forget to record in

your checkbook register


QUESTION: QUESTION:

– You cannot cash a check unless it has You cannot cash a check unless it has

been ______________________.been ______________________.

ANSWER: Endorsed

CHAPTER NINECHAPTER NINE

QUESTION: QUESTION:

– What type of What type of

endorsement is endorsement is

this?this?

ANSWER: Blank Endorsement

CHAPTER NINECHAPTER NINE

QUESTION: QUESTION:

– What type of What type of

endorsement is endorsement is

this?this?

ANSWER: Restrictive Endorsement


QUESTION: QUESTION: – Special ATM Card that allows you to pay for Special ATM Card that allows you to pay for

transactions right out of your checking account by transactions right out of your checking account by simply swiping the cardsimply swiping the card

ANSWER: Debit Card


UNIT 4 – TEST REVIEWUNIT 4 – TEST REVIEWPLANNING FOR YOUR FUTUREPLANNING FOR YOUR FUTURE

SAVINGS AND INVESTINGSAVINGS AND INVESTING

CHAPTER TENCHAPTER TENSAVING FOR YOUR FUTURESAVING FOR YOUR FUTURE

QUESTION: QUESTION:

– Financial security begins when you start doing what?Financial security begins when you start doing what?

ANSWER:

SAVING MONEY!


QUESTION: QUESTION:

– List three “expected” items that most people save money for?List three “expected” items that most people save money for?

ANSWER:

HOUSE, CAR, VACATIONS etc…


QUESTION: QUESTION: – You need to have some savings to take care of the unexpected You need to have some savings to take care of the unexpected

things that life throws at you. Name three “unexpected” items that things that life throws at you. Name three “unexpected” items that you might need your savings for:you might need your savings for:

ANSWER:

UNEMPLOYMENT, ACCIDENT, SICKNESS


QUESTION: QUESTION:

– The amount of money you have left after your bills is paid is The amount of money you have left after your bills is paid is referred to as your ___________?referred to as your ___________?

ANSWER:

DISCRETIONARY INCOME


QUESTION: QUESTION:

– Money paid by the financial institution to the save for the use of Money paid by the financial institution to the save for the use of their money is known as what?their money is known as what?

ANSWER:

INTEREST


QUESTION: QUESTION:

– When interest is computed on the original principal plus When interest is computed on the original principal plus accumulated interest, it is called what?accumulated interest, it is called what?

ANSWER:

COMPOUNDING INTEREST


QUESTION: QUESTION:

– In class we discussed a few ways people “save” their money. In class we discussed a few ways people “save” their money. Name one:Name one:

ANSWERS: REGULAR SAVINGS ACCOUNT CERTIFICATE OF DEPOSIT MONEY MARKET FUND


QUESTION: QUESTION:

– When assets can be easily converted into cash without a loss in When assets can be easily converted into cash without a loss in value they are called what?value they are called what?

ANSWER:

LIQUID


QUESTION: QUESTION:

– Name a “pro” and a “con” about putting money into a regular Name a “pro” and a “con” about putting money into a regular savings account?savings account?

ANSWER: PRO: HIGH LIQUIDITY CON: LOW INTEREST RATE


QUESTION: QUESTION:

– In class we discussed five factors that you should consider In class we discussed five factors that you should consider when setting up your savings. Can you name any of them?when setting up your savings. Can you name any of them?

ANSWERS: LIQUIDITY SAFETY CONVENIENCE INTEREST EARNING POTENTIAL EARLY WITHDRAW PENALTIES


QUESTION: QUESTION:

– THE MOST IMPORTANT THING TO REMEMBER FROM THE THE MOST IMPORTANT THING TO REMEMBER FROM THE CHAPTER ON SAVINGS IS TO DO WHAT?CHAPTER ON SAVINGS IS TO DO WHAT?

ANSWER:

PAY YOURSELF FIRST!

CHAPTER ELEVENCHAPTER ELEVENMANAGING YOUR INVESTMENTSMANAGING YOUR INVESTMENTS

QUESTION: QUESTION:

– Once you have a “safe cushion” put away in regular savings, you can start doing Once you have a “safe cushion” put away in regular savings, you can start doing more serious investing. What does the book consider a “safe cushion”?more serious investing. What does the book consider a “safe cushion”?

ANSWER:

3-6 MONTHS OF EXPENSES


QUESTION: QUESTION:

– A measure of uncertainty about an investment is known as?A measure of uncertainty about an investment is known as?

ANSWER:

RISK


QUESTION: QUESTION:

– The rise in the general level of prices over time is known as The rise in the general level of prices over time is known as __________________?__________________?

ANSWER:

INFLATION


QUESTION: QUESTION:

– Represent ownership in a corporation.Represent ownership in a corporation.

ANSWER:

STOCKS


QUESTION: QUESTION:

– One unit of ownership is known as:One unit of ownership is known as:

ANSWER:

A SHARE


QUESTION: QUESTION:

– When the government or a corporation borrow money from you and When the government or a corporation borrow money from you and agree to pay you back with interest, that is known as a ___________?agree to pay you back with interest, that is known as a ___________?

ANSWER:

BOND

CHAPTER TWELVE CHAPTER TWELVE INVESTING IN STOCKSINVESTING IN STOCKS

QUESTION: QUESTION:

– Stocks that are sold in multiples of 100 are called?Stocks that are sold in multiples of 100 are called?

ANSWER:

ROUND LOTS


QUESTION: QUESTION:

– Portion of the profits that are redistributed to the shareholders of a Portion of the profits that are redistributed to the shareholders of a corporation.corporation.

ANSWER:

DIVIDENDS


QUESTION: QUESTION:

– Stocks that have a consistent history of paying high dividends are Stocks that have a consistent history of paying high dividends are known as?known as?

ANSWER:

INCOME STOCKS


QUESTION: QUESTION:

– Companies that REINVEST their profits into the business so that they Companies that REINVEST their profits into the business so that they can grown and expand are known as ______________?can grown and expand are known as ______________?

ANSWER:

GROWTH STOCKS


QUESTION: QUESTION:

– When a stock sells for less than $5 per share it is called a When a stock sells for less than $5 per share it is called a ________________?________________?

ANSWER:

PENNY STOCK


QUESTION: QUESTION:

– Stocks of well-established, and usually profitable companies, are Stocks of well-established, and usually profitable companies, are called __________________?called __________________?

ANSWER:

BLUE-CHIP STOCKS


QUESTION: QUESTION:

– What are the two ways you can make money with stocks?What are the two ways you can make money with stocks?

ANSWER: THE STOCK PRICE CAN GO UP YOU CAN GET A DIVIDEND


QUESTION: QUESTION:

– A marketplace where stocks and other securities are bought and sold A marketplace where stocks and other securities are bought and sold is called what?is called what?

ANSWER:

A SECURITIES EXCHANGE


QUESTION: QUESTION:

– The largest organized exchange in the United States is?The largest organized exchange in the United States is?

ANSWER:

THE NEW YORK STOCK EXCHANGE


QUESTION: QUESTION:

– Strategy you use if you think a stock price is going to drop?Strategy you use if you think a stock price is going to drop?

ANSWER:

SHORTING A STOCK OR SELLING SHORT


QUESTION: QUESTION:

– Occurs when a company increases the number of shares they have Occurs when a company increases the number of shares they have outstanding, but lowers the selling price of the stock in direct proportion.outstanding, but lowers the selling price of the stock in direct proportion.

ANSWER:

STOCK SPLIT

CHAPTER FOURTEENCHAPTER FOURTEENMUTUAL FUNDS & REAL ESTATEMUTUAL FUNDS & REAL ESTATE

QUESTION: QUESTION:

– Type of investment where investors from around the world pool their Type of investment where investors from around the world pool their money together to buy stocks, bonds, and other securities.money together to buy stocks, bonds, and other securities.

ANSWER:

MUTUAL FUND


QUESTION: QUESTION: – What are three reasons why people invest in mutual What are three reasons why people invest in mutual

funds?funds?

ANSWER: Convenient Provides Diversification High Liquidity Usually less risky than the stock

market


QUESTION: QUESTION:

– What type of investment has historically proven to give the best What type of investment has historically proven to give the best returns and give you the best defense against inflation?returns and give you the best defense against inflation?

ANSWER:

REAL ESTATE


QUESTION: QUESTION:

– When buying real estate you usually have to pay some money up When buying real estate you usually have to pay some money up front in order to secure the loan. This is known as what?front in order to secure the loan. This is known as what?

ANSWER:

A DOWN PAYMENT


QUESTION: QUESTION:

– Down Payments usually have to be at least how much?Down Payments usually have to be at least how much?

ANSWER:

20% OF THE TOTAL PRICE


QUESTION: QUESTION:

– The difference between what you can sell the house for and what you The difference between what you can sell the house for and what you owe on is it is referred to as what?owe on is it is referred to as what?

ANSWER:

EQUITY


QUESTION: QUESTION:

– What are two HUGE benefits to investing in real estate?What are two HUGE benefits to investing in real estate?

ANSWER: EXCELLENT RETURN ON

INVESTMENT GREAT TAX BENEFITS


QUESTION: QUESTION:

– What is the biggest con of investing in real-estate?What is the biggest con of investing in real-estate?

ANSWER:

LOW LIQUIDITY – IT CAN BE HARD TO CONVERT YOUR INVESTMENT BACK INTO CASH


CREDIT IN AMERICACREDIT IN AMERICA

CHAPTER SIXTEENCHAPTER SIXTEENCREDITCREDIT

QUESTION: QUESTION:

– What are some advantages to using credit?What are some advantages to using credit?

ANSWER: Able to buy items now Don’t have to carry cash Creates a record of purchases More convenient than writing checks Can make online purchases and reservations

etc…

CHAPTER SIXTEEN CHAPTER SIXTEEN CREDITCREDIT

QUESTION: QUESTION:

– What are some disadvantages to using credit?What are some disadvantages to using credit?

ANSWER: High interest rates May require additional service fees Can lead to serious financial difficulties Impulse spending may occur


QUESTION: QUESTION:

– When banks need to decide whether or not to grant you credit they When banks need to decide whether or not to grant you credit they look at the three C’s. What are they? look at the three C’s. What are they?

ANSWER: Character – Will you repay? Capital – What if you don’t repay? Capacity – Your ability to repay?


QUESTION: QUESTION:

– Name ways that you can start to build a good credit history?Name ways that you can start to build a good credit history?

ANSWERS: Establish a steady work history Pay your bills on time Open checking and savings accounts. Don’t

bounce checks and make regular deposits Apply a credit card and pay it off in full each

month.


QUESTION: QUESTION:

– There are three types of credit: Single Payment, Installment and There are three types of credit: Single Payment, Installment and Revolving. Give an example of each.Revolving. Give an example of each.

ANSWER: Single Payment – borrow once, pay once – EXAMPLE:

Utilities Bill Installment – borrow once, pay off over time –

EXAMPLE: House payment or car payment Revolving – keep borrowing within set limit, pay off

monthly EXAMPLE: Credit card payments


QUESTION: QUESTION:

– To have a “safe amount” of debt you should owe under To have a “safe amount” of debt you should owe under __________% of your yearly income in total debt.__________% of your yearly income in total debt.

ANSWER: 20%


QUESTION: QUESTION:

– To have a “safe amount” of monthly debt payments you should be spending To have a “safe amount” of monthly debt payments you should be spending less than __________% of your monthly income on those payments.less than __________% of your monthly income on those payments.

ANSWER: 10%

STUDY, STUDY, STUDY, STUDY, STUDY!STUDY!

MONEY MANAGEMENT FINAL EXAM TEST REVIEW. MONEY MANAGEMENT UNIT 1 – Test Review Choosing, Planning...

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