Negligence is typically thought of as a failure to take reasonable actions to prevent injury or damage. True |
True |
In a contract, each party has what? a. A guarantee of gain |
b. An obligation or responsibility |
Experts recommend that you only use insurance if the item is worth more than $100,000. True |
False |
The power of attorney is a legal document that gives the person of your choice the authority to act on your behalf. True |
True |
What is NOT part of all contracts? a. The offer |
c. Premiums |
What are clauses in the insurance contract that specify the losses that are not covered by the insurance? a. Riders |
b. Exclusions |
Verbal contracts can never be legally enforced. True |
False |
What is a failure to take reasonable actions to prevent injury or damage? a. Risk |
d. Negligence |
Everyone has the same amount of risk. True |
False |
A simple will leaves your possessions to whom? a. A spouse |
a. A spouse |
Who agrees to pay for certain types of losses in exchange for payments on a policy? a. Policy holder |
b. Insurer |
What is NOT true about contracts? a. They are legal agreements. |
d. A contract can be enforced even if the agreement contains an illegal activity. |
You should always read the fine print before signing a contract. True |
True |
If someone dies without a will, who handles the distribution of the person's estate? a. Their spouse |
d. The state |
What document details the type of medical care that you wish to receive if you become incapacitated due to a physical or mental illness? a. Formal will |
d. Living will |
The specific protection that the insurer provides to the policy holder is known as which of the following? a. Exclusion |
c. Coverage |
Only individuals over the age of 60 need to create an estate plan. True |
False |
Consensus ad idem means which of the following? a. Meeting of the minds |
a. Meeting of the minds |
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 |
True |
What is the amount of money that the policy holder will pay before the insurance company will pay on an insured loss? a. Deductible |
a. Deductible |
Contracts are really only used for business; most people do not have contracts for their personal finances. True |
False |
With a contract, consideration is something of value offered by one party in exchange for something of value from the second party. True |
True |
A guardian does which of the following? a. Distributes a person's estate |
c. Agrees to care for a person's children in the event of the person's death |
When you want to add coverage for something not included in an insurance policy, what would you add to your policy? a. An exclusion |
d. A rider |
Handwritten wills are also known as which of the following? a. Formal wills |
c. Holographic wills |
Direct stock plans are only offered by brokerage firms. True |
False |
What is the process of earning interest on interest that you've already earned? a. Interesting |
b. Compounding |
A bond indenture is which of the following? a. Dividend |
b. Legal document |
A stock is a share of what? a. Dividends |
d. Ownership |
Dividends are the periodic distribution of profits to investors. True |
True |
Preferred stocks share characteristics with which of the following? a. Common stocks and corporate bonds |
a. Common stocks and corporate bonds |
One of the advantages of having a savings account is that it is money that can be used for emergency purposes, whereas money in bonds, CDs, or investments may not be readily available. True |
True |
Although stocks can generate greater revenue, they are also more risky than many forms of investments. True |
True |
Speculative investments are which of the following? a. No risk |
d. High risk |
Municipal bonds are issued by whom? a. Federal government |
b. State or local government |
Real estate is a great investment for everyone, particularly since the money is more liquid than common stocks. True |
False |
What is a legal document that outlines all of the conditions of the bond? a. Bond indenture |
a. Bond indenture |
T-bills are offered in what monetary increment? a. $1 |
d. $1000 |
The broad types of investments are known as which of the following? a. Asset classes |
a. Asset classes |
What is an advantage of a savings account? a. The money is available for an emergency |
a. The money is available for an emergency |
What is true about preferred stocks? a. They do not pay dividends. |
b. They give owners a share of ownership in the company. |
Treasury bonds have what maturity date? a. 1 year |
d. 30 year |
All investments carry the same amount of risk. True |
False |
What is a disadvantage of government bonds? a. They have a high interest rate. |
c. They are relatively risk-free. |
What is true about investing? a. It is less risky than using a savings account. |
b. It is used to generate money. |
What is when someone invests in a variety of places to reduce the overall risk of investing? a. Asset classes |
c. Asset allocation |
If you have a financial professional advising you on investments, it is not necessary to do your own research. True |
False |
Common stocks are considered to be lower risk than municipal bonds. True |
False |
Speculative investments are high risk investments with the possibility of high returns in a short period of time. True |
True |
Individuals have to choose whether to save or invest, since it is not recommended to do both. True |
False |
What is a disadvantage of using credit? a. It can be tempting to overspend. |
a. It can be tempting to overspend. |
Those who pay off their credit balances in full each month and avoid the finance and interest charges are known as convenience users. True |
True |
What is a reason why someone would use a secured credit card? a. To purchase goods in another country |
b. To help overcome a bad credit history |
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 |
True |
Collateral is the net worth of your household. True |
False |
What is the most common form of open-end credit? a. Mortgages |
c. Credit cards |
If you are trying to establish credit history, what is a good place to start? a. Gasoline or department store credit card |
a. Gasoline or department store credit card |
What is one of the best ways to avoid credit problems? a. Use your credit as often as possible. |
c. Pay your credit bills on-time each month. |
The assets that you currently own are known as which of the following? a. Credit |
b. Capital |
Experts recommend that if you have a credit card balance, you keep the balance below what percent of the total credit limit? a. 10 |
d. 30 |
What is true about debit cards? a. They are linked to a savings or checking account. |
a. They are linked to a savings or checking account. |
What is a typical grace period for a credit card? a. 2 to 5 days |
c. 20 to 25 days |
Individuals who do not pay off their credit card balances each month are known as which of the following? a. Borrowers |
a. Borrowers |
Credit cards all use the same interest and finance charges. True |
False |
Credit tends to cost individuals more than paying in cash. True |
True |
Something of value that is used to back up a loan is known as what? a. Dividends |
b. Collateral |
What type of card includes a computer chip with additional information on it? a. Debit card |
c. Smart card |
Consumer credit has very few advantages and is best avoided at all times. True |
False |
A bank line of credit is a prearranged loan amount that you can access by writing specific checks. True |
True |
Credit unions tend to give credit only to whom? a. Persons with no credit history. |
b. Members of the credit union. |
Smart cards are also known as gift cards. True |
False |
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 |
True |
Lenders always accept applications for credit. True |
False |
In regards to credit, what does capacity mean? a. Your overall credit line from multiple sources. |
b. Your perceived ability to repay your loans and debt. |
What is true about the payments with closed-end credit? a. They increase over time. |
c. They remain the same until the credit is paid off. |
What type of budget involves placing money into envelops? a. Mental budget |
b. Physical budget |
What is a common mistake made in budgeting? a. Over-estimating expenses |
b. Budgeting for financial goals or savings last |
What is simply a spending plan that we create to help manage our money? a. Personal balance sheet |
d. Budget |
What is an assessment of what you own and what you owe? a. Personal balance statement |
a. Personal balance statement |
Financial goals should not be considered when creating a budget. True |
False |
What budgeting option is best used only with limited resources and expenses? a. Mental budgeting |
a. Mental budgeting |
It is not important to keep financial records since they can all be found online. True |
False |
What is true about computer files of financial records? a. They should be backed up regularly. |
a. They should be backed up regularly. |
What is a reason for keeping organized financial records? a. Paying bills |
d. All of the above |
What is a characteristic of a successful budget?
a. Inflexible |
c. Realistic |
The first step in creating a cash flow statement is which of the following? a. Recording financial goals |
c. Recording income |
Personal financial statements are a good way of measuring our current finances and giving us information about our financial activities. True |
True |
What types of records are best kept in safe deposit boxes? a. Credit card bills |
d. Valuable records like marriage records or stock certificates |
What is a record of income and expenditures for a particular period? a. Personal balance sheet |
b. Cash flow statement |
What is an example of a liquid asset? a. Money in a savings account |
a. Money in a savings account |
What is an example of a long term liability? a. Mortgage |
a. Mortgage |
Net worth is the difference between your assets and your liabilities. True |
True |
A home file is the place where you should keep financial records that you may need to access regularly. True |
True |
What is the first step in creating a cash flow statement? a. Record your expenditures |
b. Record your income |
The first step in creating a budget is to identify your expenses. True |
False |
A credit card bill is best kept in which of the following places? a. Safe deposit box |
c. Home file |
A budget variance is any difference between what was actually spent during the time period and the budget. True |
True |
Liabilities are the amounts of money due to others that need to be paid now. True |
True |
Only individuals that make over $50,000 per year should worry about creating a cash flow statement. True |
False |
Liquid assets are those that cannot be easily converted to cash. True |
False |
What is a partial refund of the purchase price of an item? a. Pretext |
c. Rebate |
It is hard for identity thieves to steal any identity in today's society. True |
False |
What is an example of personal information that an identity thief would look for? a. Your social security number |
d. All of the above |
What involves special devices that steal your credit card or debit card information when you use the card for a purchase? a. Pretexting |
d. Skimming |
What might be a consideration in deciding where to buy something? a. The location of the store |
d. All of the above |
Advertisements are paid for by whom? a. Sponsors |
a. Sponsors |
Weasel Words involve advertising all of the good things about a product while ignoring the negative aspects of the product. True |
False |
What is when an identity thief calls or emails you pretending to be someone else in order to get your personal information? a. Pretexting |
b. Phishing |
Smaller bags of items are generally lower priced per unit than larger bags. True |
False |
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. True |
False |
If you believe that your identity has been stolen, you should close the accounts that have been compromised. True |
True |
Fraud alerts and credit freezers are the same thing. True |
False |
What is a strategy for reducing the risk of identity theft? a. Throw out personal information in black trash bags. |
b. Carry only the cards and personal identification that you need. |
If you receive a phone call and the caller asks for personal information, what should you do? a. Give the caller the information |
c. Refuse to give the information and hang up |
In order for ads to be effective, what is the first thing that they must do? a. Offer reasons why the product is better than others |
b. Be seen and get the attention of consumers |
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 |
True |
Which agency has an identity theft hotline? a. FDA |
b. FTC |
The Glittering Generalities technique involves using appealing words to sell the product. True |
True |
In the United States, over 9 million are victims of identity theft each year. True |
True |
Experts recommend that you time your purchases to what, if possible? a. Each time a new product is released |
b. Sales |
Credit freezes prevent anyone from viewing your credit report, essentially blocking the creation of new credit accounts in your name. True |
True |
What advertising technique focuses on the positive and ignores any negative aspects in the product? a. Glittering Generalities |
d. Card Stacking |
Price comparison involves which of the following? a. Figuring out the price per unit and comparing it to other choices |
a. Figuring out the price per unit and comparing it to other choices |
What advertising technique involves the use of "positive words without actually really making any guarantee"? a. Glittering Generalities |
b. Weasel Words |
Which of the following issues credit reports? a. Equifax |
a. Equifax |