FREE FINANCE AND STUDY GAMES ABOUT PERSONAL

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FREE FINANCE AND STUDY GAMES ABOUT PERSONAL

FINANCE EXAM QUESTIONS

Actual Qs and Ans Expert-Verified Explanation

This Exam contains:

-Guarantee passing score -23 Questions and Answers -format set of multiple-choice -Expert-Verified Explanation

Question 1: Interest rate

Answer:

Percentage paid to a lender for the use of borrowed money (in debt); percentage earned on invested principal (in investing)

Question 2: Budget

Answer:

A written cash flow plan

Question 3: Compound interest

Answer:

Interest paid on interest previously earned; credited daily, monthly, quarterly or semiannually

Question 4: Cash Flow Statement

Answer:

A summary that shows total income and spending for a given time period

Question 5: Financial literacy

Answer:

The knowledge and skillset necessary to be an informed consumer and manage finances effectively

Question 6: Interest-Bearing Account

Answer:

An account that generates interest income on the available balance in the account

Question 7: Economy

Answer:

A system by which goods and services are produced and distributed

Question 8: Envelope System

Answer:

Series of envelopes that are divided into categories (food, entertainment, gas, etc.) and are used to store cash for planned monthly expenses

Question 9: Sinking fund

Answer:

Saving money over time for a large purchase

Question 10: Debt

Answer:

The obligation of repayment owed by one party (the debtor/borrower) to a second party (the creditor/lender); in most cases this includes repayment of the original loan amount plus interest

Question 11: Carbon Check

Answer:

A copy of each check you write

Question 12: Credit

Answer:

The granting of a loan and the creation of debt; any form of deferred payment

Question 13: Emergency fund

Answer:

Five hundred dollars in readily available cash to be used only in the event of an emergency; the goal of the First Foundation

Question 14: Five Foundations

Answer:

The five steps to financial success

Question 15: Impulse Purchase

Answer:

An item that is bought without previous planning or consideration of the long-term effects

Question 16: Overdraft

Answer:

Occurs when money is withdrawn from a bank account and the available balance goes below zero

Question 17: Interest

Answer:

A fee paid by a borrower to the lender for the use of borrowed money; typically interest is calculated as a percentage of the principal (original loan amount)

Question 18: Zero-Based Budget

Answer:

A cash flow plan that assigns an expense to every dollar of your income, wherein the total income minus the total expenses equals zero

Question 19: Reconcile

Answer:

To match your bank statement with your checkbook

Question 20: Consumer

Answer:

A person or organization that uses a product of service

Question 21: Personal finance

Answer:

All of the decisions and activities of an individual or family regarding their money, including spending, saving, budgeting, etc.

Question 22: Inflation

Answer:

The persistent increase in the cost of goods and services or the persistent decline in the purchasing power of money

Question 23: Loan

Answer:

A debt evidenced by a "note," which specifies the principal amount, interest rate and date of repayment