Podcast
Questions and Answers
What is it called when a man budgeted $200 a month for clothing but spent $150?
What is it called when a man budgeted $200 a month for clothing but spent $150?
a budget variance
Who must be notified if a person makes a deposit of $10,000 or more into a bank account?
Who must be notified if a person makes a deposit of $10,000 or more into a bank account?
US Treasury Department
What is it called when Troy has $50 transferred electronically from his checking to his savings account?
What is it called when Troy has $50 transferred electronically from his checking to his savings account?
A savings plan
What ensures a financial institution will continue to pay out checks written by Ms. Sanchez?
What ensures a financial institution will continue to pay out checks written by Ms. Sanchez?
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Why should James cash his paycheck at his own bank rather than a check cashing store?
Why should James cash his paycheck at his own bank rather than a check cashing store?
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What does 'The Fed' refer to?
What does 'The Fed' refer to?
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What must a person generally fulfill to qualify for a Federal Housing Administration (FHA) loan?
What must a person generally fulfill to qualify for a Federal Housing Administration (FHA) loan?
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For how long will a bankruptcy appear on a person's credit report?
For how long will a bankruptcy appear on a person's credit report?
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Which of the following is considered to be open-end credit?
Which of the following is considered to be open-end credit?
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What action should a person take if they have three credit cards with significant outstanding balances and are unable to make payments?
What action should a person take if they have three credit cards with significant outstanding balances and are unable to make payments?
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What is the transaction called when a person brings an item to a pawnshop to obtain cash?
What is the transaction called when a person brings an item to a pawnshop to obtain cash?
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What does the Federal Reserve use to regulate the nation's money supply?
What does the Federal Reserve use to regulate the nation's money supply?
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How are purchases made with your debit card typically treated in your account?
How are purchases made with your debit card typically treated in your account?
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How can Susan recover the extra $75 withdrawn by Marie with her debit card?
How can Susan recover the extra $75 withdrawn by Marie with her debit card?
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What is it called when money is not used and goods and services are exchanged for other goods and services?
What is it called when money is not used and goods and services are exchanged for other goods and services?
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What does a person's debt ratio indicate?
What does a person's debt ratio indicate?
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Why are cigarettes expensive?
Why are cigarettes expensive?
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What is one benefit of holding an investment for over a year?
What is one benefit of holding an investment for over a year?
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What does a defined-contribution pension plan mean for an employee upon retirement?
What does a defined-contribution pension plan mean for an employee upon retirement?
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Can a person withdraw money from a Roth IRA tax and penalty free after five years?
Can a person withdraw money from a Roth IRA tax and penalty free after five years?
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Which entity must the Kiss Corporation register with before issuing stocks or bonds?
Which entity must the Kiss Corporation register with before issuing stocks or bonds?
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If a person owns a stock that pays a $2.00 dividend and chooses to reinvest it, what does this mean?
If a person owns a stock that pays a $2.00 dividend and chooses to reinvest it, what does this mean?
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What is the implication of buying 1000 shares of a common stock on 50% margin?
What is the implication of buying 1000 shares of a common stock on 50% margin?
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What does a pharmacy provide in relation to drugs?
What does a pharmacy provide in relation to drugs?
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Why might profits from renting a small house with apartments be lower than expected?
Why might profits from renting a small house with apartments be lower than expected?
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What two critical factors are needed to determine the time value of depositing $100 in a savings account?
What two critical factors are needed to determine the time value of depositing $100 in a savings account?
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What should a person be aware of if they believe a lending institution is charging too much interest?
What should a person be aware of if they believe a lending institution is charging too much interest?
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Who benefits the most from inflation?
Who benefits the most from inflation?
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What does the Truth in Lending Act require?
What does the Truth in Lending Act require?
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Which investment should you choose if you believe interest rates will go up?
Which investment should you choose if you believe interest rates will go up?
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Why would it be appropriate for a person to add a personal property floater to their homeowner's insurance for an expensive television?
Why would it be appropriate for a person to add a personal property floater to their homeowner's insurance for an expensive television?
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What will a person receive upon surrendering a $20,000 whole life insurance policy with a cash value clause?
What will a person receive upon surrendering a $20,000 whole life insurance policy with a cash value clause?
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What should a woman with a very expensive piece of jewelry tell her insurance agent?
What should a woman with a very expensive piece of jewelry tell her insurance agent?
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What does having a managed health care plan usually require?
What does having a managed health care plan usually require?
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What is the probable financial consequence for a family whose main income earner died unexpectedly without life insurance?
What is the probable financial consequence for a family whose main income earner died unexpectedly without life insurance?
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Study Notes
Budgeting and Spending
- A budget variance occurs when the actual spending differs from the planned budget, such as a man who budgeted $200 for clothing but spent $150.
- To maintain a checking account, the account holder must have sufficient funds to cover checks written.
Banking Regulations
- Deposits of $10,000 or more must be reported to the US Treasury Department.
- Banks typically charge high fees for check cashing services, making it advisable to cash checks at one's own bank.
Savings and Investments
- Regular electronic transfers from a checking account to a savings account exemplify a savings plan.
- Capital gains on investments held for over a year are taxed at a lower rate, providing a financial incentive for long-term investment.
Loans and Credit
- Qualifying for a Federal Housing Administration (FHA) loan requires meeting income guidelines.
- When declaring bankruptcy, the record remains on a credit report for ten years, impacting future credit opportunities.
Credit Management
- Open-end credit includes department store charge cards, allowing ongoing borrowing.
- In cases of missed payments on credit cards, it’s advisable to contact credit card companies to negotiate new payment plans.
Collateral and Pawnshops
- Loans obtained from pawnshops using items as collateral are classified as collateralized loans.
- If a person authorizes the use of their ATM card and PIN, they generally bear the loss if a greater amount is withdrawn than agreed.
Money Management and Policies
- The Federal Reserve regulates the money supply through monetary policy.
- Debit card purchases are deducted immediately from the connected checking account, reinforcing swift funds management.
Financial Planning
- Investments such as real estate may yield lower profits if rental units are unoccupied.
- The debt ratio shows the relationship between debt and net worth; a lower ratio indicates better financial health.
Taxes and Legalities
- Cigarette prices are high partly due to government-imposed excise taxes.
- State usury laws prohibit excessive interest rates on loans, offering consumer protection.
Investment Strategies
- Short-term savings instruments are preferable if one anticipates rising interest rates.
- Understanding interest rates and inflation is crucial for determining the time value of money deposited in savings accounts.
Insurance Considerations
- Homeowner’s insurance often requires additional personal property floaters to cover valuable items like jewelry or electronics.
- Whole life insurance policies include cash value clauses, which provide surrender value upon termination.
Health Care and Planning
- A managed health care plan necessitates consultations with a primary healthcare physician before accessing specialized services.
Family Financial Impact
- The loss of a primary income provider due to death can severely impact a family’s financial stability, exacerbating challenges related to debt and living expenses.
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Description
This quiz covers essential topics in personal finance, including budgeting, banking regulations, savings and investments, as well as loans and credit. Test your knowledge on how to manage finances effectively and understand the implications of each financial decision.
