Finance Challenge Bowl Practice Questions mine

This financial institution is non-profit and member owned.

What is a credit union?

Insurance agent functions:

1. Act as an agent (perform duties)

2. Maintain an office

3. Record business transactions

4. Effect insurance

5. Perform recognized insurance business

6. Solicit, negotiate, and procure

7. Make or propose to make an Insurance Contract

8. Make applications for insurance

9. Bind risks

10. Receive premiums or commissions for insurance

11. Sign, execute, and deliver policies

Common Stock

Shares of a company that do not guarantee a dividend and have more risk and volatility than preferred shares. Common stock holders have the benefit of providing shareholders with the right to vote for the board of directors as well as on issues that come before the board at the annual meeting of shareholders.

Dave Ramsey

Financial Guru

Bartering

trading items other than money

bankrupt

When a business, or person, is unable to pay her or his debts.

Cash management

The management of cash and near cash (liquid) assets

T or F A second mortgage refers to a "second chance" that the borrower is given if the borrower defaults on a first mortgage

False

An automatic deposit of net pay to an employee's designated bank account.

Direct deposit

Over two-thirds of all income earned in the US is what kind of income?

Small Business and corporations

the total amount of taxes owed

tax liability

What is the uncertainty of the outcome of an investment?

Risk

A check of your tax return by the IRS.

AUDIT

This financial institution is non-profit and member owned.

What is a credit union?

Insurance agent duties & responsibilities to the insured:

a) To meet the client's insurance needs and make proper recommendations with regard to coverage

b) If an agent fails to recommend a needed coverage or leaves a coverage gap that results in a loss that is not covered, the insured may have a valid claim against the agent.

Corporation

A business that is owned by stockholders and has right and responsibilities as if it were a person.

Budget

Something you should do every month to keep track of your money.

Money

a tool that makes it easier to trade one thing of value for another

commission

The percentage of a sales price received by a salesperson for her or his services.

Liquid assets

Cash and investments that can easily be converted into cash

Automated teller machine (ATM)

A computer terminal that allows a withdrawal of cash from an account.

These individuals own most commercial banks.

What are stockholders?

Real Estate

Which of the following investment options is the least liquid?

estate tax

a federal tax collected on the value of a person's property at the time of his or her death

Financial security

What is the purpose of savings?

ITEMIZE

To list. For example, you list deductions on your tax forms.

T or F The Wisconsin Department of Revenue's three strategic goals are: 1)Ensure the safety and soundness of state chartered financial institutions 2)Protect the consumers of financial services 3)Facilitate economic growth

False

These individuals own most commercial banks.

What are stockholders?

Insurance agent duties & responsibilities to the insurer:

a) If an agent incorrectly implies or tells an insured that there is coverage under a policy when no coverage actually exists under that policy, the insurer could be held liable for the loss.

b) The insurer might have to pay the loss but could then have a valid claim against the agent and could sue to recover the amount paid to the insured.

Dividend

Part of a company's profits (earnings) that it pays as money to stockholders.

Personal Finance

The study of money for an individual.

Hourly wage

the amount of money paid for each hour worked

credit bureau

An organisation that keeps on file the credit records of consumers.

Pay yourself first

1. Have saving automatically deducted from your paycheck.

2. Automatic savings are not in liquid reservoir therefore less likely to spend that money.

The date your credit card payment is due to the creditor.

What is a due date?

Debit card

A cash card that allows you to withdraw money or pay for purchases from your checking or savings account.

The date your credit card payment is due to the creditor.

What is a due date?

Medium of Exchange

What primary purpose is money serving when it is used to buy a ticket to a movie?

inheritance tax

a state tax collected on the property left by a person to his or her heir(s) in a will

1. How many years for investment to double

2. Interest rate needed for investment to double

What does the Rule of 72 calculate?

APRIL 15

The last date by which tax returns should be completed and mailed to the IRS.

A REIT is a corporation or trust that invests in and manages what for the purpose of making money?A.World Currencies B.Gold C.Real Estate

Real Estate

Fiduciary

Someone who undertakes a high level of trust when acting in the interest of another person.

Earnings

The amount of money that remains after subtracting the company's expenses from its revenue.

Landlord

Person who owns the home you are renting from.

Employer

the person or company that hires you

creditor

A person who is owed money.

Time Value of Money

The earlier your start to save, the easier it is to achieve your goals.

This corporation insures your bank account.

What is the Federal Deposit Insurance Corporation, FDIC?

Point-of-sale transaction

Purchase by a debit card of a good or service at a retail store, or a restaurant, or elsewhere.

This corporation insures your bank account.

What is the Federal Deposit Insurance Corporation, FDIC?

Hurts as a borrower, helps you as a saver

If you are a borrower, is compound interest good or bad?

income tax

tax on wages, salaries, and self-employed earnings

Principal x Rate x Time = Interest

What is the formula for calculating simple interest?

DEPENDENT

Person who is financially supported by someone else; usually a child.

Co-signer

Another adult that is willing to take responsibility for your debt if you can not afford it.

Investor

Someone who risks funds by purchasing financial products with the hope the investments will increase in value over time.

Accounts

Your bank houses these.

Minimum wage

a wage required by law that most employers pay employees no less than a certain amount

debtor

A person who owes money.

"Banks" or Deposit-type financial institutions

Financial institutions that provide traditional checking and savings accounts

Can an Insurance agents charge an additional fee for services when those services also result in payment of a commission?

No. Insurance agents may not charge an additional fee for services when those services also result in payment of a commission.

This financial institution specializes in mortgages and savings deposits.

What is a savings and loan for thrift?

Commercial bank

A for-profit institution that offers a full range of financial services, including checking, savings, and lending.

Which of the following would increase the amount you would need to save to meet a given retirement goal?

The higher rate of return you expect

income tax return

a form, such as 1040 or 1040EZ, on which a taxpayer reports how much money he or she received from working and other sources and the exact taxes that are owed

Higher risk = higher return

Lower risk = lower return

What is the relationship between risk and return?

INCOME

Money you receive, usually from your employer.

This country boasts having the largest department store in the world, coming in at nearly 5.5 million square feet. A.Bolivia B.South Korea C.USA

B. Bolivia

This financial institution specializes in mortgages and savings deposits.

What is a savings and loan for thrift?

What fees can an agent charge for?

Agents may charge for motor vehicle reports and photographs of property, but those fees may not exceed actual incurred costs. That agent may also charge for special delivery or postal charges, printing and reproduction costs, electronic mail costs, telephone transmissions and similar costs. Also, the agent may collect an inspection fee, credit report fee, taxes, finance charges, and policy fees.

IPO

Initial Public Offering; the initial sale of stock to the public by investment bankers.

Gross earnings

After tax money

Currency

describes the actual bill and coins used to represent money in a particular country

default notice

A document from a lender stating that a person has failed to carry out the terms of the contract.

Nondeposit-type financial institutions

Mutual fund companies, brokerage firms, insurance companies offer similar services as those offered by banks.

Savings and loan association (S&L)

A financial institution that traditionally specialized in savings accounts and mortgage loans but now offers many of the same services as commercial banks.

This bank has no tellers or branches.

What is a cyber bank.?

Fire and Police Protection

What is purchased with generated funds from local taxes?

exclusion

income that is not subject to taxes, also called tax-exempt income

Inflation

What is the steady rise in the general level of prices?

EXEMPTION

Amount of money you may subtract from your income for each dependent.

Hyper-Inflation

It's situation of extremely rapid inflation often resulting from a condition of economic or political breakdown.

This bank has no tellers or branches.

What is a cyber bank.?

What does the agent have to do before charging any of these fees?

The agent must advise the client of these fees in advance and obtain the client's written consent before the expenses are incurred.

Preferred Stock

Shares of ownership of a company in which the share holder is guaranteed a dividend if one is declared and whose shares are usually not as volatile as common stock. Preferred stock holders do not have voting rights in company elections and decisions.

APR

Annual percentage rate

Cash

often used interchangeably with currency

dividend

Sum payable as profit for shares.

Online banking

1. Access to your accounts to:

a. Check balances

b. Transfer funds

c. Pay bills and view financial information

Anyone to whom you owe money.

What is a creditor?

Credit union

A nonprofit financial institution that is owned by its members and organized for their benefit.

Both Emily and her employer (split equally)

Who pays FICA for Emily at her job?

Albert Einstein

Who discovered the mathematical equation for the "Rule of 72?"

FILING STAUTS

How you define your family situation for tax purposes.

Which of the following is a disadvantage of a sole propnetorship business organization?A.The business owners have unlimited legal liability B.There are fewer legal restrictions C.It's the easiest to organize

A.The business owners have unlimited legal liability

Anyone to whom you owe money.

What is a creditor?

adjusted gross income

gross income after certain reductions are calculated

Checking accounts

Advantages: Liquid, safe, low minimum balance, convienient

Non-Interest bearing - Demand deposits

Interest bearing NOW accounts, Disadvantages: Minimum balance required, monthly fee, opportunity cost, interest less than alternatives

equities

Stocks and shares held by an individual.