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Econ Finance Literacy

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  • A person who owns a share of shares of stock in a corporation is a stockholder?
    False
    True
  • What does it mean to default on your loan?
    Failure to make pay it back
  • People w/ bachelors degrees have lower earning power than works with a HS diploma only
    False
    True
  • Explain the difference between a debit card and credit card
    Debt card is money you have in the bank, credit is money borrowed
  • Explain when one wants a high interest rate and when the same person would want a low interest rate
    High Interest rate when investing, low interest rate when borrowing
  • Explain the difference between a secured loan and unsecured loan
    Secured loans require some sort of collateral, such as a car, a home, or another valuable asset,
  • Why do stocks have the largest amount of risk? How can you minimize your risk?
    their price can fluctuate significantly based on a company's performance/ Diversify
  • Which is not a type of business organization?
    Sole Proprietorship
    Coporation
    Partnership
    Stockholder
  • Explain one advantage of having credit cards
    Convenience, purchase protection, rewards, building credit history, emergency purchases
  • How much money should you save before you start renting an apartment?
    2 months rent
    1 months rent
    3 months rent
    no savings necessary
  • Another name for a passbook account is savings
    True
    False
  • With insurance, a higher deductible means a higher premium (monthly payment)
    True
    False
  • Why are traditional savings accounts not a great way to invest your money?
    Lowest returns/low interest rates
  • Extra points - Explain difference between Traditional IRA and Roth IRS
    Traditionals are invest prior to being taxed and all gains taxed when money is pulled. Roth is taken out of net income. No taxes on gains
  • What is the term for monthly, quarterly, semi annual price paid to an insurance company?
    Income Tax
    Premium
    Interest Rate
    Collateral
  • ______________ is something of balue that can be claimed by a lender if a loan is not repaid
    Collateral
  • Why is important to live on a budget or have a budget?
    It will help prevent over spending, make life easier by making smart financial choices
  • Money Market Accounts, Mutual Funds, and CD's are good ways to __________ money
    Budget
    Borrow
    Withdraw
    Save
  • Each student who wants Financial Aid must do what?
    Take AP Classes
    Complete the FAFSA Application
    Join the Military
    Complete an Application for a Social Security Card.
  • Person or institutions to whom money is OWED
    Investor
    Creditor
    Leasee
    Borrower
  • Donations to charities are tax deductible?
    False
    True
  • Who issues Municipal Bonds?
    Congress
    Financial Institutions
    Coporations
    State and Local Governments
  • A corporation has all the rights and responsibilities of
    a partnership
    a government agency
    a family
    an individual
  • What is the difference between NET INCOME and GROSS INCOME
    Net income is how much you bring home after deductions (taxes/insurance/investments), Gross is amount earned before deducations
  • A sole proprietorship is an unincorporated business with two or more partners that split duties evenly
    True
    False
  • Which is the best synonym for the bonds that are used to raise corporate capital
    Payments
    Taxes
    Stocks
    Loans
  • Is your money protected while in a bank? If so, how?
    FDIC - Insures your account up to $250k
  • What has the greatest impact on your credit score?
    Age of Credit
    On time payments
    How Much Available Credit you Have
    Number of Accounts
  • EXTRA POINTS - Why do you want your portfolio to be diversified?
    Less risk in case of market failure. Investments are spread out.
  • Who pays interest on a loan?
    Borrower
  • According to the book, when renting an apartment, your monthly rent should not be more than_____
    one week of your monthly income
    two weeks of your monthly income
    four weeks of your monthly income
    three weeks of your monthly income
  • BONUS POINTS - Explain the concept of Compound Interest
    You earn interest on your interest over time leading to greater gains
  • Another way to think of the term "Capital" is ___________.
    Money/Assets
  • Explain Deductible vs Premium when discussing insurance
    Dedutible is what needs to be paid before insurance pays out, premium is your ongoing monthly payments to insurance
  • What is consider a good Credit Score? And why do you want a high score?
    700-720+...Better terms on loans
  • What is one benefit and one negative about credit unions?
    Negative - membership is required, less locations Positive - Better rates, more options
  • A(n) ____________ is a group that channels savings to investors
    Credit Bureau
    Certificate of Deposit
    Investors
    Financial Instituion
  • When paying your credit card bill, you should pay only minimum payment
    True
    False
  • 1 Advantage 1 Disadvantage of Sole Proprietorships
    complete control, unlimited liability,
  • A mutual fund a company that sells shares of a portfolio of securities (stocks/bonds)
    False
    True
  • What is the best title for a list that includes: Direct Subsidized, Direct Plus, Direct Consolidation
    Federal Student Loans
    Financial Aid
    Fafsa requirements
    Work Study Programs
  • Payment made for use of borrowed money is called?
    Fees
    Interest
    Budget
    Collateral
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