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In a contract, each party has what? |
An obligation or responsibility |
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When you want to add coverage for something not included in an insurance policy, what would you add to your policy? |
A rider |
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Everyone has the same amount of risk. |
False |
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Negligence is typically thought of as a failure to take reasonable actions to prevent injury or damage. |
True |
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Contracts are really only used for business; most people do not have contracts for their personal finances. |
True |
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If someone dies without a will, who handles the distribution of the person’s estate? |
The state |
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Only individuals over the age of 60 need to create an estate plan. |
False |
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The power of attorney is a legal document that gives the person of your choice the authority to act on your behalf. |
True |
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What is NOT true about contracts? |
A contract can be enforced even if the agreement contains an illegal activity. |
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The specific protection that the insurer provides to the policy holder is known as which of the following? |
Coverage |
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A guardian does which of the following? |
Agrees to care for a person’s children in the event of the person’s death |
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If someone dies without a will, a situation known as intestate, the state will step in to handle the distribution of the estate, even if it is not what you may have wanted. |
True |
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Who agrees to pay for certain types of losses in exchange for payments on a policy? |
Insurer |
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With a contract, consideration is something of value offered by one party in exchange for something of value from the second party. |
True |
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Verbal contracts can never be legally enforced. |
False |
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The broad types of investments are known as which of the following? Asset classes |
Asset classes |
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Common stocks are considered to be lower risk than municipal bonds. |
False |
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Treasury bonds have what maturity date? |
30 year |
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Preferred stocks share characteristics with which of the following? |
Common stocks and corporate bonds |
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Speculative investments are which of the following? |
High risk |
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What is a legal document that outlines all of the conditions of the bond? |
Bond indenture |
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What is true about investing? |
It is used to generate money. |
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Direct stock plans are only offered by brokerage firms. |
False |
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What is the process of earning interest on interest that you’ve already earned? |
Compounding |
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A bond indenture is which of the following? |
Legal document |
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Dividends are the periodic distribution of profits to investors. |
True |
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Real estate is a great investment for everyone, particularly since the money is more liquid than common stocks. |
False |
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Individuals have to choose whether to save or invest, since it is not recommended to do both. |
False |
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All investments carry the same amount of risk. |
False |
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A stock is a share of what? |
Ownership |
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One advantage of credit is that it can give you a "float" time between buying the product and when you need to pay for the product. |
True |
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Collateral is the net worth of your household. |
False |
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What type of card includes a computer chip with additional information on it? |
Smart card |
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Credit tends to cost individuals more than paying in cash. |
True |
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Individuals who do not pay off their credit card balances each month are known as which of the following? |
Borrowers |
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In regards to credit, what does capacity mean? |
Your perceived ability to repay your loans and debt. |
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What is true about debit cards? |
They are linked to a savings or checking account. |
|
Smart cards are also known as gift cards. |
False |
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What is a reason why someone would use a secured credit card? |
To help overcome a bad credit history |
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What is a disadvantage of using credit? |
It can be tempting to overspend. |
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Consumer credit has very few advantages and is best avoided at all times. |
False |
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Before giving you a loan or credit, lending institutions may want to know more about you to help determine whether you are a good person to give a loan or credit to. |
True |
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If you are trying to establish credit history, what is a good place to start? |
Gasoline or department store credit card |
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Those who pay off their credit balances in full each month and avoid the finance and interest charges are known as convenience users. |
True |
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Credit unions tend to give credit only to whom? |
Members of the credit union. |
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What is an example of a liquid asset? |
Money in a savings account |
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What is a common mistake made in budgeting? |
Budgeting for financial goals or savings last |
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What is simply a spending plan that we create to help manage our money? |
Budget |
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Liquid assets are those that cannot be easily converted to cash. |
False |
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What is true about computer files of financial records? |
They should be backed up regularly. |
|
A home file is the place where you should keep financial records that you may need to access regularly. |
True |
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What is the first step in creating a cash flow statement? |
Record your income |
|
The first step in creating a cash flow statement is which of the following? |
Recording income |
|
What is a reason for keeping organized financial records? |
All of the above |
|
What is an assessment of what you own and what you owe? |
Personal balance statement |
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What budgeting option is best used only with limited resources and expenses? |
Mental budgeting |
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It is not important to keep financial records since they can all be found online. |
False |
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A budget variance is any difference between what was actually spent during the time period and the budget. |
True |
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What is an example of a long term liability? |
Mortgage |
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Personal financial statements are a good way of measuring our current finances and giving us information about our financial activities. |
True |
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In the United States, over 9 million are victims of identity theft each year. |
True |
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Weasel Words involve advertising all of the good things about a product while ignoring the negative aspects of the product. |
False |
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What advertising technique focuses on the positive and ignores any negative aspects in the product? |
Card Stacking |
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What might be a consideration in deciding where to buy something? |
All of the above |
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One of the first steps that you can take is to place a fraud alert on your credit reports from Equifax, Experian, and TransUnion. |
True |
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Experts recommend that you time your purchases to what, if possible? |
Sales |
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What is a partial refund of the purchase price of an item? |
Rebate |
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Experts recommend that you don’t wait for sales before buying an item, since the item is likely to rise in price in the time you wait. |
False |
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Fraud alerts and credit freezers are the same thing. |
False |
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If you believe that your identity has been stolen, you should close the accounts that have been compromised. |
True |
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What advertising technique involves the use of "positive words without actually really making any guarantee"? |
Weasel Words |
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What involves special devices that steal your credit card or debit card information when you use the card for a purchase? |
Skimming |
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What is when an identity thief calls or emails you pretending to be someone else in order to get your personal information? |
Phishing |
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If you receive a phone call and the caller asks for personal information, what should you do? |
Refuse to give the information and hang up |
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Credit freezes prevent anyone from viewing your credit report, essentially blocking the creation of new credit accounts in your name. |
True |
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personal financial statement |
form outlining an individual’s assets and liabilities, used when an individual is applying for credit |
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cash flow statement |
document used by businesses or individuals showing the money generated and used during a specific time. shows differences in income and spending. |
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financial record |
Formal documents representing the transactions of a business, individual or other organization. Financial records maintained by most businesses include a statement of retained earnings and cash flow, income statements and the company’s balance sheet and tax returns. |
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budgeting |
the process of creating a plan to spend your money. ex: recording your income and finding what you need to spend on necessities, how much you can spend on luxuries, and how much you will save for emergencies |
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phishing |
the activity of defrauding an online account holder of financial information by posing as a legitimate company. ex: the prince of nigeria, calling you and trying to solve your computer problems |
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