Moneypower.org – Flashcards
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If a person makes a deposit of $10,000 or more into a bank account, the bank must notify the
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US Treasury Department
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Travelers checks, often used for vacations:
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Function as cash and are easily replaced if lost
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Which financial product has the most predictable income?
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Certificate of Deposit
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"The Fed" is short for:
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The Federal Reserve System
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What is meant by an uncollateralized loan?
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A personal loan without assets to cover the loan amount.
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Which of the following is considered to be open-end credit?
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Department store charge cards
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When a person brings an item to a pawnshop to obtain cash, the transaction is considered
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a collateralized loan.
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To qualify for a Federal Housing Administration (FHA) loan, a person must generally
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fulfill income guidelines
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When a person declares bankruptcy that fact will appear on the person's credit report
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for a 10 year period.
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Which of the following does the Federal Reserve use to regulate the nation's money supply?
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Monetary policy
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Which of the following is a disadvantage of using phone cards, debit cards, electronic transfers, and ATM cards?
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They expose consumers to greater likelihood of identity theft
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Which statement best describes the relationship between a person's educational level and that person's potential earning power?
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A person with a professional degree is likely to earn at least four times as much per year as a person who did not complete high school
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Susan gives Marie her ABC Credit Union debit card and personal identification number (PIN) so Marie could get $25 from Susan's bank account. Marie withdrew $100 instead of the agreed to $25. How can Susan get the $75 back?
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No bank or government agency is obligated to reimburse Susan because she authorized Marie to use her ATM card and PIN
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One of the benefits of holding an investment for over a year rather than selling it in less than a year is that the
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capital gains on the investment will be taxed at a lower rate.
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A man budgeted $200 a month for clothing. This month the man spent $150 on clothing therefore that budget item is considered to have
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a budget variance.
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A person's debt ratio shows the relationship between debt and net worth. The lower the ratio the
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better off financially the person is.
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A person complains about how expensive it is to be a cigarette smoker. One of the reasons cigarettes are so expensive is that
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the government imposes an excise tax on them.
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A company offers a defined-contribution pension plan which means that upon retirement the employee will receive
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the total amount of money contributed plus investment earnings.
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After five years of owning a Roth Individual Retirement Account (IRA), a person wants to buy his first home, the person can withdraw money from the Roth IRA
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tax and penalty free.
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A person owns a stock that pays a $2.00 a share dividend. If the person chooses to reinvest that dividend, this means that the $2.00 will go toward buying
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more of the same stock.
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What is the largest equities market in the world?
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New York Stock Exchange (NYSE)
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An investor bought 40 shares of ABC corporation's stock at $80 a share. Two weeks later, the investor receives notice that the corporation has approved a 2-for-1 stock split. Based on this information, the investor would own at the moment of the split
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80 shares of the stock and the price of each share is $40.
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As an investment, a person decides to buy a small house that has three rental apartments. The profits from this investment may be lower then expected if the
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one of the apartments is not rented.
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A pharmacy is to drugs as the American Stock Exchange is to:
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Securities
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To determine the time value of depositing $100 in a savings account, a person needs to know the interest rate and
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the rate of inflation.
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The cost to use someone else's money for a period of time is called the:
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Interest rate expressed as a percentage
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Which type of financial institution usually pays the highest rate of interest on savings account balances?
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Credit unions
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Who benefits the most from inflation?
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Long-term fixed rate borrowers
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For the past five years, a person has had a $20,000 whole life insurance policy that has a cash value clause. The person decides to surrender the policy. At the time of surrender, the person will receive
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a calculated amount of money which includes the premiums paid as well as the interest on that money.
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A woman has just received a very expensive piece of jewelry. The woman has homeowner's insurance. Which statement would it be most appropriate for her to make to her insurance agent?
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"I think I need a personal property floater."
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A person buys a flat screen, plasma, theater-like television. The person has homeowner's insurance. Why would it be appropriate to add a personal property floater to that insurance?
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To cover the cost of replacement should the television get damaged or stolen.
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When Jessie needs health care, she must first go to her primary care physician who coordinates her care and decides whether Jessie should see a specialist. Jessie pays $10 as the co-pay when she sees her primary care doctor. Jessie has which type of health insurance?
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Managed care health plan
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Generally, the higher the deductible on an insurance policy, the
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lower the premium.