Personal Finance Final Exam

Fixed-income securities that are funded by debt are called _. dividends bonds mutual funds stocks _ are a more volatile investment in which you can invest in a company and become a part owner of the company. mutual funds dividends bonds stocks A(n) _ is a legal document between a tenant and a landlord. earnest money deed lease rent A(n) _ is a legal document received after closing costs are paid that transfers ownership of a home. deed rent lease earnest money _ is a percentage of the sale price paid along with an offer that the seller can keep if you back out on the deal. deed lease earnest money security deposit Sending out unsolicited email is called _. pharming spam phishing _ is when you are offered a free prize if you pay shipping and handling. low-balling time-shifting space-shifting fraudulent representation The _ is all a person owns less debts owed at the time of death. estate beneficiary decedent will A(n) _ is a legal document that tells how your estate is to be distributed after you die. executor beneficiary decedent will Contributions to a(n) _ are taxed and the earnings you receive after retirement are not taxed. 401(k) annuity traditional IRA Roth IRA The Affordable Care Act aims to decrease the quality of insurance and increase the number of uninsured. True False This type of insurance covers the insured for lifetime or until age 100. permanent term actuary beneficiary This type of insurance is limited to a specific length of time. beneficiary actuary permanent term The person or legal entity designated to receive a death benefit is called the _. underwriter beneficiary premium deductible The amount per accident you pay before insurance starts to pay is called the _. deductible beneficiary contract amount premium Which is the routing number on the check? 0123456789 123456789 67-76890 0100 Which is the routing number on the check? 0100 67-76890 123456789 0123456789 Explain at least one pro and one con for each of the following: checks, cash, debit cards. The restrictive endorsement limits the use of a check. True False The _ is the process of matching the balances of your checking account and the bank statement. payee maker bank reconciliation endorsement It is a good idea to research a company before you show up for an interview. True False List at least two advantages and two disadvantages of credit cards using complete sentences. List three things you can do to improve your FICO score. Credit is borrowing money to use now with a promise to pay it back later. True False The APR is the cost of credit expressed as a yearly percentage. True False The _ is the amount of money borrowed or saved. principal interest time rate Determine the amount of simple interest for a $500 loan with 2% yearly interest. $25 $50 $60 $75 A complete record of your borrowing and repayment performance is called _. credit history credit bureau credit rating collateral The time in which you can pay the entire amount with no interest on a credit card is called _. penalty fees installment principal grace period Property pledged to assure repayment of a loan is called _. guarantee collateral skimming credit rating Which type of student financial aid doesn't need to be paid back? grants and scholarships student loans Federal Pell grants are awarded to undergraduate students with exceptional financial need. True False You don't have to pay interest on student loans. True False Which type of account earns a fixed rate for a specific length of time and includes an early withdrawal penalty? savings account money market account CD Compare and contrast commercial banks and credit unions. Explain the rule of 72 and show an example using numbers. The interest is the amount of money you deposit. True False _ interest is paid on the original interest plus accumulated interest. simple income compound principal Employers match the amount of Social Security and Medicare deducted from your paycheck and submit it to the government on your behalf. True False The _ form is a government form used to calculate withholding allowance. W-2 W-3 W-4 W-5 _ is federal health insurance for people who are age 65 and older and certain younger people with disabilities. federal income tax medicare social security medicaid _ is for disabled, retired, or children of deceased workers. medicaid federal income tax social security medicare A flat or proportional tax rate remains the same regardless of the income. True False A(n) _ tax takes a smaller share of income as the amount of income grows. proportional flat regressive _ is income after payroll taxes and voluntary deductions are removed. net pay gross pay gross income total pay Explain the most important thing you learned in this class and why.