BYU Independent Study Financial Literacy Final

How long will a chapter 7 bankruptcy usually remain on your credit report?

ten years

A chapter 7 bankruptcy involves which of the following?

You get a fresh start on your finances

What was the average college debt of graduating seniors?

Approximately 29,000

When is the best time to apply for a card?

When you have enough income to pay your debts

Approximately how many American households or individuals declared chapter 13 bankruptcy in 2009?

350,000

Which of the following is the best key component of financial literacy?

Being knowledgeable about credit and debt

A chapter 11 bankruptcy is filed by while of the following?

Businesses

Good money management is important for which of the following reasons:

all of the above (learning how to make wise financial decisions, understanding that loans cost more money than the amount actually borrowed, being able to invest in a savings account)

The best money-management strategy is which of the following?

Do not spend more money than you can pay back each month.

Pick the scenario that best represents the most positive financial outcome

Madeline has one credit card with a $500 maximum limit. Using her credit card will help her establish a good credit rating to show loan institutions that she is financially responsible. She does not pay any financial costs because she pays the entire amount she borrowed on that card each month so she does not incur interest. When the time comes that she desires to purchase a car, she will be a good candidate to receive a loan.

Which of the these would contribute to going into debt?

All of the above (spending more money than you make, buying big ticket items without planning on how to pay for them, taking money from your savings to pay for your grocery items)

People in the eighteen-to-twenty-four age bracket spend nearly what percentage of their monthly income just on debt repayment?

30%

When is the best time to start learning money management principles?

Throughout your lifetime, to be ready to implement when you have money to manage

Which is the main reason some people choose to file a chapter 13 bankruptcy?

It is a more conservative approach to bankruptcy

Excessive debt does not contribute to which of the following?

Self-sufficiency

Which of the following best describes sound financial literacy?

Gaining knowledge about how to handle your finances

According to the lesson, the average American household has accumulated how much credit card debt?

Between 15,000 and 16,000

Define debt

The state of owing money to someone or something

Who should be most responsible for your finances

You

Which of the following in not a key component of financial literacy?

Paying the minimum amount due on your credit cards each month

Which of the following is not an advantage of debit cards?

They will help you establish credit for future big-ticket items

Sam needs to go to the bookstore to purchase a book for his financial literacy course. The cost of the book is $45. In which two columns would the $45 amount be entered?

Payment amount and balance

Which of the following is the best definition of a want?

Something you would like to have but can survive without

What is the proper order for making a budget?

Set goals, make a plan, and follow-up

If you can distinguish between you wants and your needs, financial security will _____.

be much easier to achieve

Which of the following is the best definition of a need?

Something you must have in order to survive

Consumers need to be vigilant in making sure that lenders don't have hidden fees. This is known in the contract as _______.

Payment penalties

Which of the following is an important consideration when applying for a student loan?

All of the above (whether it is a federal or private loan, whether your personal information is secure, whether you can meet the lending requirements)

The best definition of "compound interest" is which of the following?

Interest that creditors add each year based on what your principal balance is

What is the biggest disadvantage to investing in a certificate of deposit?

Your money is not readily available without heavy penalties

What is the number one reason why more than half of all Americans spend more money than they make?

Credit cards

What is one of the best ways to gauge whether a goal is appropriate?

Make sure it is attainable

Which of the following wouldn't be a disadvantage of paying with cash?

Paying in cash keeps you from overspending

Chris is twelve years old and has just started mowing lawns for his neighbors. For each lawn he mows, he will receive $15. He has been hired by five neighbors to mow their lawns once a week and another neighbor every other week for the same amount. How much money will Chris have earned at the end of eight weeks?

660

Sam has been saving his money to purchase a new computer. He believes he has $781.70 in his checking account, but when he uses his debit card to buy the computer, the transaction won't go through. Which of these could be a reason for this problem?

All of the above (Sam had actually not saved enough money,Sam made some errors in his calculations, and he had less money in his account than he thought, Sam made some errors in his entries, and he had less money in his account than he thought.)

Which of the following is a good reason for avoiding quick loans?

All of the above (higher fees, higher interest rates, difficulty paying back)

What mechanism helped to restore America's confidence in the American bank system after the Great Depression?

The federal government starting the FDIC

What is the simple interest payment on a 12,000 loan at a 3% interest rate?

360

Which of the following should you make goals for?

All of the above (investing, spending and savings, income and budgeting)

Why can credit unions usually offer higher rates on savings accounts?

They are not in the business of making money because every member is an owner of the company.

What is the correct amount of money for you to make each month in order to start making wise financial decisions?

Any amount that you make when you start to earn money

Mary stops by the store every day after school to buy her family cookies for dessert. She spends $7 for one dozen mini chocolate chip cookies. Which of the following is the best alternative for Mary when considering financial opportunity costs?

Mary determines that if she bakes seven dozen cookies each Saturday, she will save on electricity so that the cookies will actually cost $2.25 per dozen. She decides to make seven dozen chocolate chip cookies each Saturday so her family can eat one dozen a day for dessert each day.

Of the following options, which three are social influences to financial behavior?

? health care, housing, (energy use?)

The term "A limited supply" describes which of the following?

Scarcity

Which body of government organizations determines the annual interest rate for our country?

Federal Reserve

Which statement is true regarding the annual interest rate?

all of the above (In the 1990s, the annual interest rate was 6%, In the 1980s, the annual interest rate was around 18%, The 2014 rate was 4%.)

Which of these is the best way to describe how the economy affects your personal finances?

Spending money helps the economy, but when interest rates are higher you are not able to spend as much)

Which of these is the best adage for setting financial goals?

"If you fail to plan, you plan to fail"

Which action is part of making a financial plan?

All of the above (Estimate the costs of your goals, set time frames for your goals, reevaluate your goals)

The financial planning model is helpful when doing which of the following?

Making a financial decision

Which of these is the best example of an emotional influence when determining your financial behavior?

You want a new pair of shoes really badly, but you already have all the shoes you need

Which of the following is not a consideration mentioned by moneycrashers.com when determining what is wise in your financial planning?

Wise people are happy

What is an opportunity cost?

Giving up something you could purchase for a different alternative

Paying your mortgage late and having it be unacceptable and looked down upon is an example of which type of influence?

A cultural influence

Which option is the best one for Martha to choose?

Wait for two weeks until the curtains go on sale

Which situation would be best for Martha?

If the curtains were on sale for 5 per panel at Target today and there are plenty of panels

Which option is the worst one for Martha to choose?

Purchase the curtains today at Target

Which consideration is mentioned by moneycrashers.com when determining what is wise in your financial planning?

All of the above (Wise people learn from their mistakes, Wise people know their priorities, Wise people learn personal finance.)

What are the three influences on financial behavior that we discussed in unit 3?

Emotional, cultural and societal

Which scenario is not an example of scarcity?

Caroline wants to buy a hat she found online, but the product is sold in stores only

Check all the options that describe the following advertisement. If the advertisement's validity or integrity appears questionable, select "be careful" as well. (Socceraid, "to get the edge, I drink SoccerAid. Don't you want the edge?")

Appeal to authority/celebrity, appeal to emotion, be careful

According to lesson 4.4, what were the most commonly used website passwords in 2013?

123456 and password

In 2013, 10% of retail sales were done on the Internet. What is the percentage that experts have predicted will be reached for retail sales in 2017?

60%

Which of the following describes the Federal Trade Commission?

A US government agency that is tasked with making a fair and competitive marketplace

Which option is not an example of an incentive?

Offers made by friends to make a trade when the items being traded are identical in every way

Which option is not something to do in order to protect your identity?

Keep your PIN written down in your wallet in case you forget the number when you are using your debt card

Which of the following best describes "https://"?

It indicates you are shopping on a secure website

What is the definition of location strategy?

Placing a product where consumers are most likely to see it and be enticed to purchase it

Which of these is not a strategy companies use to get consumers to purchase their products?

? Project what sales will be?

A company's statement that indicates it can cure cancer without medical support is an example of which of the following?

Deception

Which statement accurately describes consumer protection laws?

Consumer protection laws protect consumers from false advertisements, fraudulent businesses, and identity theft.

Of the organizations we spoke about in this unit, which of these should you contact if your identity is stolen?

All of the above (The three major credit bureaus, the local police department, the Federal Trade Commission)

Which of these is an accurate example of a value incentive?

Collecting stickers you get with your receipts so you can get free products

What is the definition of "identity theft"?

A term used when someone wrongfully obtains another person's personal data by fraud or deception

Which option is a type of scheme that is not a "Get-rich-quick" scheme that we discussed in this unit?

Identity scheme

Check all the options that best describe the following advertisement. If the advertisement's validity or integrity appears questionable, select "be careful" as well. ("If it's gotta be fast, it's gotta be Bogie's")

Be careful, appeal to intellect

When discussing financial protection, which of the following can consumers turn to for help?

All of the above (Better Business Bureau, Federal Trade Commission, Consumer protection laws)

Which situation is a negative incentive?

When someone threatens to take something away from you if you do something you should not be doing

Which of these is a good example of a positive incentive?

All of the above (Contests, lower interest rates)

Check all the options that best describe the following advertisement. If the advertisement's validity or integrity appears questionable, select "be careful" as well. ("It's not your fault you're overweight...Fat Begone)

Appeal to emotion, be careful, appeal to intellect