1 The budgeting process starts with monitoring current spending. 2 Most short term goals are based on activities over the next two or three years.

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1 Money Matters - Semester Exam REVIEW True/False: Indicate whether the statement is true or false. 1 The budgeting process starts with monitoring current spending. 2 Most short term goals are based on activities over the next two or three years. 3 Rent is considered a variable expense. 4 A common long-term goal may involve saving for college for parents of a newborn child. 5 Giving up something you want now to get something even better in the future is called delayed gratification. 6 How you manage your cash flow affects if, when, and how you reach your goals. 7 Your financial plan should be monitored regularly and modified when your goals change or when you run into unexpected obstacles or expenses. 8 An overdraft occurs when a consumer withdrawal from a bank account exceeds the available balance. 9 It is better to maintain a low balance on a credit card and pay it off each month than to have no balance at all. 10 Every time you apply for a credit card it goes on your credit report 11 Automobile insurance is not an option or a luxury- it's Texas law. 12 Credit problems stay on your credit report for 15 years. 13 Making regular deposits to your savings account helps your credit history. 14 A bank charge for the use of a credit card each year is called an annual fee. 15 A great credit score is 400. Multiple Choice: Identify the choice that best completes the statement or answers the question. 16. Which of the following instruments is NOT typically associated with spending? a. Cash b. Credit Card c. Debit Card d. Certificate of Deposit

2 17 Under which of the following circumstances would it be beneficial for you to borrow money to buy something now and repay it with future income? a. When you need to buy a car to get a much better paying job. b. When some clothes you like go on sale. c. When the interest on the loan is greater than the interest you get on your savings. d. When you really need a vacation. 18 Which type of financial institution is member owned and generally has the lowest overhead with the best interest rates? a. Local bank b. National bank c. Credit union d. Savings and loan institution 19 A credit card company can increase your interest rate when: a. Your payment is late. b. You go over your credit limit. c. They merge with another company. d. All of the above. 20 Which of the following is considered a need? a. A new car b. a clothes dryer c. a place to sleep d. lunch at a local restaurant 21 is commonly considered a flexible expense. a. Rent b. A mortgage payment c. Home insurance d. Entertainment 22 An example of a long-term goal would be: a. an annual vacation. b. saving for retirement. c. buying a used car. d. completing college within the next six months. 23 If you save $60 a month for the next 2 years instead of buying video games, how much money would you accumulate ignoring interest? a. $1560 b. $1440 c. $720 d. $3120

3 24 Your aunt has agreed to sell you her car for $3500. You will put $1500 down and pay her the rest over the next 40 weeks. Assuming she will not charge you interest, how much will your weekly payment be? a. $50.00 b. $87.50 c. $25.00 d. $ Lisa will buy two new tires three months from now before taking a trip. Each tire costs $75. How long will she need to plan to achieve her goal? a. short-term b. intermediate-term c. long-term d. none of the above 26 This type of check endorsement is more secure than a blank endorsement because the receiver writes "'For Deposit Only" and the account number where the money will be deposited, above the signature. This allows the check to be deposited. a. Special endorsement b. Restrictive endorsement c. Blank endorsement d. None of the above 27 What are the three credit reporting agencies? a. Transmission, Experian, and Equicredit b. Transmission, Expedia, and Equifax c. Equifax, Transunion, and Experian d. Equicredit, Expedia, & Transunion 28 What helps to cover the consumer when they have used a credit card to make an online purchases? a. Better Business Bureau b. Fair Credit Billing Act c. Federal Trade Commission d. None of the above 29 When internet scam artists use either pop-up messages or s to lure consumers into giving personal information this is called: a. dumping b. scamming c. phishing d. spamming

4 30 What would be a 10% down payment on a $17,000 car? a. $1000 b. $700 c. $170 d. $ Which of the following will increase the cost of a car loan? a. When the interest rate (or APR) increases b. When the car dealer offers a 0% interest c. When the length of the loan decreases d. When the interest rate (or APR) decreases 32 Which of the following is an advantage of buying a used car? a. Reduced purchase cost b. May include some warranty protection c. Reduced depreciation d. All of the above 33 Which of the following is a benefit of using credit? a. overspending b. interest c. identity theft d. convenience 34 is when someone uses your personal information without your permission to commit fraud or other crimes. a. shoplifting b. white collar crime c. collection d. identity theft 35 What hurts your credit score the most? a. spending over the limit b. cancelling the credit card c. late payments d. not using the credit card 36 A yearly rate of interest that includes fees and costs paid to acquire the loan is called a. Cash b. APR- Annual Percentage Rate c. Debit Card d. Certificate of Deposit

5 37 What is a loan called that is paid in equal monthly installments with a fixed interest rate? a. Installment credit b. Variable interest rate c. Average daily balance d. Finance charge 38 A number, roughly between the average of300 to 850 that reflects the credit history detailed by a person's credit report is called a. Fiscal score b. Monthly periodic score c. Credit score d. APR 39 Fee charged for using a credit card even though you pay off the loan balance in full. a. Cash advanced fee b. Indexed rate c. Finance charge d. Monthly period rate 40 An individual who agrees to pay back a loan if the borrower defaults is called the a. Credit card insurance b. Co-signer c. Authorized user d. Credit bureau 41 Charge imposed for not paying your credit card payment on time a. Over the credit limit fee b. Currency exchange fee c. Returned check fee d. Late payment fee 42 A document containing financial information about a person, focusing on his or her history of paying obligations, such as a mortgage, car payment, or credit card. a. Credit limit b. Card holder agreement c. Credit report d. Credit bureau

6 43 Money paid for the use of money. a. Interest b. Balance transfer c. Universal default d. Co signer 44 A regular payment to an owner or landlord for the right to occupy or use property. a. Expense b. Rent c. Net Income d. Accounts Payable 45 Something extra that isn't essential or that steps up a basic need is called a. a. Variable expense b. Disposable income c. Budget d. Want 46 A plan for spending and saving money during a particular period. a. Budget b. Tenant c. Utility d. Gross income 47 Oh no! Lost your job? What is the best thing to do? a. Take out cash advances on credit cards b. Borrow money from friends c. Have at least 3 months' of savings to get through a crisis d. Pawn everything you can 48 Which is NOT a personal money management tool you should master? a. Budget your money b. Live within your means c. Develop smart money habits d. Spend your paycheck each month 49 How do you know you have developed healthy money habits? a. When you save money each paycheck b. When you know how much money you make and take home c. When you have enough money to cover needs as well as some wants d. All of the above

7 50 Unspent income is called a. Net income b. Savings c. Eviction d. Variable expense