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90 Cards in this Set

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Interest is...

The amount owed for borrowing money.

To earn as much interest as possible, you should open a savings account that earns _______ interest and has the ______ interest rate.

Compound; highest

John just opened a savings account and wants to maximize the amount of interest he earns. Which of the following actions would enable him to earn MORE interest?

Selecting an account with a high interest rate and leaving his money in the account for long period of time

You are opening a savings account that earns compound interest. Which compounding frequency will earn you the MOST money?

Compounding daily

Which of the following is a type of savings vehicle?

Certificate of Deposit and Money Market Account

Which of the following is generally true about savings vehicles?

People should evaluate different forms of savings vehicles based on their needs

Which of the following savings vehicles usually requires a high minimum balance?

Certificate of Deposit (CD)

Which of the following accounts will give you the LEAST access to your money?

Certificate of Deposit (CD)

The purpose of a budget is to:

Help you plan how you will spend the money you earn or receive

When it comes to saving money, what is a good rule of thumb?

Put aside money for savings each month

Which of the following is NOT one of the responsibilities of the Federal Reserve?

Establishing the federal budget

Which type of account is typically the MOST liquid?

Checking account

Savings accounts usually offer _________ interest rates than checking accounts. It is _________ to access your money in a savings account than in a checking account.

Higher; harder

The three parts of the Federal Reserve System are the Reserve Banks, the Federal Open Market Committee (FOMC), and the:

Board of Governors

Which of the following is a unique feature of credit unions?

Credit unions are typically owned and run by their members and credit unions limit membership to certain people or groups

What part of a check is the LEAST important?

Memo line

Which of the following represent typical account fees?

ATM fee, service fee, and minimum balance fee

What's the best strategy for avoiding ATM fees?

Only use ATMs in your bank's network

What's the purpose of balancing or monitoring your checking account?

To help you calculate how much money you have in your account

The best way to ensure the accuracy and safety of your accounts is to:

Monitor your online accounts regularly

Which of the following payment types require you to pay upfront?

Money order, cashier's check, and pre-paid card

Which of the following statements comparing debit cards to credit cards is TRUE?

Debit cards allow you to draw funds directly from your checking account

Which payment method typically charges the highest interest rates?

Payday loans

Which payment type can help you stick to a budget?

Debit cards

If you are planning to carry a large balance on your credit card, which of the following credit card features should you look for?

Low APR

The annual percentage rate on a credit card determines _______.

The amount of interest you are charged on credit card purchases

Making a credit card minimum payment:

Means you are paying a small portion of your total credit card debt

Which of the following can increase your credit card's APR?

Missing a credit card payment

What is a credit card balance?

The amount of money you still owe to the credit card company

Which of the following is NOT a common credit card fee?

Minimum payment fee

Which of the following statements about credit scores is TRUE?

Credit scores reflect how likely individuals are to repay their debts, credit scores range from the low 300's to the mid 800's, and each person has three credit scores

Having a good credit score is important because:

It can impact your ability to be approved for bank loans

All of the following make up the big three credit reporting agencies EXCEPT:

Federal Reserve

Which of the following actions can NEGATIVELY impact your credit score?

You forgot to pay the cable bill

Which of the following actions has NO impact on your credit score?

You inquire about a credit card charge

Which of the following MOST influences your credit score?

Payment History

Which of the following actions would improve your credit score?

Paying off your credit card bill`

Which action is LEAST important to maintaining a healthy credit score?

Know your exact credit score

How many free credit reports are you legally entitled to each year?

One credit report from each credit bureau

Having a low credit score can make it more difficult to:

Obtain a car loan, open a new credit card, and secure an apartment lease

The return on investment (ROI) from education is typically the highest for:

Someone with a 4-year (Bachelor's) degree

Your sister is starting 9th grade next year and is thinking about going to college. What step would you recommend she take first?

Look for school clubs & organizations she's interested in

Which of the following loans will typically offer the lowest interest rate?

Federal Student Loan

When referring to student loans, what is a grace period?

The period after graduating or leaving school before you must begin paying back student loans

Which loan type requires you to make loan payments while you're attending school?

None of the above

Which of the following statements about federal student loans is TRUE?

The interest rate on your loan will be fixed over time

Using the FAFSA form, you can apply for:

Federal student loans and the federal work-study program

The Federal Application for Student Aid (FAFSA) form:

Can be submitted on online or by mail

After you send in your FAFSA form, what will you receive back?

Your Student Aid Report

You are looking for ways to pay for your higher education costs. Which of the following options will require you to pay back any money you receive?

Federal student loans

Renting provides _________ flexibility but can lead to _________ costs in the long-term.

Greater; higher

Which of the following statements about renting & owning is CORRECT?

An owner has complete responsibility and control over the property

A _________ is generally considered an appreciating asset because it will _________ in value over time.

House; increase

One reason to buy a home instead of rent a home is:

Homes have the potential to appreciate in value over time

John would like to move from the suburbs into the city, but the rent in the city is very high. John has found an apartment he really likes, but he can only afford about 60% of the monthly rent. What is the best housing option for John?

Rent the apartment with a roommate

What is a mortgage?

A type of loan used to buy property

All of the following components are commonly found in rental housing agreements EXCEPT:

What type of renter's insurance the renter must buy

Someone may choose to own a car instead of leasing because:

The car can be resold later to make some money back

Jim is in the market for a car, but he'll probably only need it for a couple of years. After that, he plans on moving into the city and using public transportation. He has a short commute to work, so he won't be putting many miles on his vehicle. What's the best transportation option for Jim?

Lease the car

Which of the following is NOT a cost typically associated with owning a car?

Wear & Tear fees

Insurance can help you:

Financially protect against unexpected accidents

Jan pays $70 each month for her auto insurance policy. This regular payment is called a:

Premium

In which of the following scenarios will you be entitled to pay the least amount of money out-of-pocket for a medical expense?

You have health insurance with a $500 deductible

Your auto insurance policy has a $200 monthly premium and $700 deductible. What is the maximum amount you will have to pay out-of-pocket for a car accident before your insurance covers your costs?

$700

You have an insurance policy with a $300 premium and a $500 deductible. How much should you expect to pay the insurance company each month for coverage?

$300

Which of the following typically have the highest auto insurance premiums?

Young, inexperienced drivers

When you purchase an item in a store, you may be charged __________.

Sales tax

Which of the following statements about taxes is FALSE?

Taxes at the local, state and federal level are all equal

Which of the following are NOT deducted on a typical paystub:

Sales tax

When starting a new job, the form you complete to determine how much tax to withhold from your paycheck is called the _______.

W-4

Which of the following is the BEST way to protect against identity theft?

Change online account passwords frequently

Identity thieves can use your personal information to:

Open a credit card, Sign up for electricity service, and Get a cell phone contract

What is the safest way to dispose of old bank account statements?

Shred them in a paper shredder

The safest action to take if someone claiming to be from your bank calls you to ask for account information is to:

Hang up and call back using the bank's official phone number

The best way to investigate fraudulent transactions on your credit card is to:

Review your recent credit card statements

Which document puts you at the LEAST risk of identity theft?

Cash receipts

It is generally safe to provide your Social Security Number to:

Verified trusted sources that need it

Which action will be least helpful if you've been the victim of identity theft?

Withdraw your money from all accounts

What is the FIRST action you should take if you suspect there has been a fraudulent charge on your credit card?

Contact the credit card company to report the fraudulent charge

Consumer protection laws are meant to:

Prevent unfair or deceptive business practices

How can investors receive compounding returns?

By investing their earnings back into their original investment

When you buy a ____ , you are loaning money to an organization.

Bond

Which best describes the difference between stocks and bonds?

Stocks allow investors to own a portion of the company; bonds are loans to the company

What is the primary reason to issue stock?

To raise money to grow the company

When it comes to investing, what is the typical relationship between risk and return?

The greater the potential risk, the greater the potential return

Which of the following correctly orders the investments from LOWER risk to HIGHER risk?

Treasury bond − Diversified mutual fund - Stock

If an investment is considered "volatile", it means...

The value of the investment may be hard to predict

Diversification is important in investing because...

It helps you to balance your risk across different types of investments

Which of the following would be considered the highest risk portfolio?

A portfolio made up of 60% stocks, 30% mutual funds, and 10% Treasury bonds

Which of the following is generally true about 401(k) and 403(b) retirement plans?

They are plans offered through employers, they offer some tax benefits, and they restrict when you can withdraw your money