Personal Finance

1. Personal Finance • Final Review

2. Groups • Get in groups of 4 or 5, no more than 5. Each group needs 4 blank sheets of paper. • No need for computers

3. Rules • No computers. Leave them shut off • Groups of 5 or 4. No other number combination. • A person may not answer a question more than once before all members of their group have answered. • All groups will have the chance to answer questions. Don’t be impatient or go crazy because you get the answer in .0000001 second because you are so brilliant. On the flip side, when I say time is up, that means for everyone. • You HAVE a chance, even if you don’t have the most points from getting the right answers. You just don’t have as good a chance. • All groups will hold up • I will subtract points for: getting on the computer, cheating, being obnoxious to another team or me, or for whatever reason I come up with.

4. Least of all.... • These are questions from YOUR final!!! No one is stopping you from taking notes. You can’t use computers because I want you all to pay attention, and some of you would spend the whole time playing games....... but Paper and pencil will work!!!!

5. Finally • THIS CLASS IS REQUIRED TO GRADUATE. IF YOU ARE BORDERLINE OR NOT PASSING.....

6. QUESTION 1 • Are you Ready?

7. Choose the statement which best describes the relationship between values and financial decisions. • a. Because a value is a fundamental belief, it has no effect on a person’s financial decisions. • b. Financial decisions are not determined by values; they are determined only by the amount of income one has. • c. Because values are not influenced by family, friends, and experiences, they have an effect on financial decisions. • d. Because values are influenced by family, friends, and experiences, they affect a person’s financial decisions.

8. Question 2

9. A well written financial goal includes the following elements: • a. Specific, money, action, result, and time bound. • b. Specific, measurable, attainable, realistic, and time bound. • c. Personal values, financial planning, direction, and action. • d. Specific, measurable, action, realistic, and time bound.

10. Question 3

11. How are financial decisions influenced by a person’s interpretation of needs and wants? • a. Financial decisions are influenced because everyone has the same needs and wants. • b. Financial decisions are not influenced because everyone has the same needs and wants. • c. Financial decisions are influenced by needs and wants because they guide a person’s choices. • d. Financial decisions are not influenced by needs and wants because choices are influenced only by values.

12. Question 4

13. A person would choose to take an interest inventory test to: • a. Learn about available jobs in the area. • b. Build a personal inventory of household goods. • c. Learn about possible career areas related to one’s interests. • d. Develop personal values and goals.

14. Question 5

15. What type of goals are ones that it will take you more than a year to achieve them: • a. Long-term goals. • b. Short-term goals. • c. Intermediate-term goals. • d. none of the above

16. Question 6

17. Deductions taken from a person’s paycheck include: • a. Net pay, FICA, and employee benefits. • b. Regressive taxes, gross pay, and city withholding tax. • c. progressive taxes, gross pay, and medical. • d. Federal withholding tax, state withholding tax, and FICA.

18. Question 7

19. When starting a new job, what form(s) must an employee complete to receive a paycheck? • a. only a W-4 • b. W-2 and I-9 • c. W-4 and I-9 • d. W-2 and W-4

20. Question 8

21. Using the rule of 72, what rate of return is needed for a person to double an investment in six years. • a. 6% • b. 8.3% • c. 10% • d. 12% • (Remember, Rule of 72 is how you figure out how long it will take to double your invest at a given rate, and you divide it into 72. This question is asked a little backwards.)

22. Question 9

23. According to the time value of money, the power of time benefits an individual because: • a. The longer a person holds onto money, the less likely they are to spend it. • b. Money paid out or received in the future is not equivalent to money paid out or received today. • c. The more time a person has to save, the lower the return on the money. • d. Time does not benefit an individual because the value of money does not change over time.

24. Question 10

25. Which of the following is true about saving and/or investing? • a. Savings cannot be converted into cash easily for emergencies. • b. Investing allows people to have cash easily accessible for emergencies. • c. The money in both savings and investing is considered liquid. • d. Savings are generally considered liquid and easily accessible.

26. Question 11

27. What do financial experts recommend an individual have for emergencies in a savings account? • a. 1-2 months of income • b. 3-6 months of income • c. 6-12 months of income • d. 1-3 years of income

28. Question 12

29. What can a person do to work toward the goal of buying a house? • a. Continue the current financial plan and with luck, be able to buy a house within the next 2 years. • b. Create a financial plan and start using credit cards to pay for current expenses in order to save money for a house quicker. • c. Create a financial plan to save up for the down payment and other housing costs; this probably means cutting current expenses to save money. • d. Pay for all large purchases in cash and apply for numerous credit cards in order to increase his/her credit rating.

30. Question 13

31. Sally won a $150 cash prize for winning the school science fair. She wants to save the money for her senior trip in five years. What type of cash management tool is the best option? • a. A certificate of deposit because it would be for a specified time length. • b. A savings account because it has the highest interest rate. • c. A checking account because it is the most liquid cash management tool. • d. A cash management tool would not benefit her; she can keep it in her closet.

32. Question 14

33. Which of the following statements does not describe a housing lease? • a. The terms of the lease agreement are not legally binding. • b. It is a legal contract between the tenant and the landlord. • c. It specifies the responsibilities and rights of both parties involved. • d. It should not be signed until the tenant understands the entire document.

34. End of Round 1 • You will add your team points to the points your team scores

35. Question 15

36. A customer is protected against loss at a financial institution if it is insured by the: • a. CB, S&L, or CU. • b. NYSE, AMEX, or DJIA. • c. APR, FIR, or INS. • d. FDIC, SAIG, or NCUA.

37. Question 16

38. What is true about automobile loan variables? • a. The higher the APR, the less interest is paid. • b. The shorter the length of the loan, the smaller the payments. • c. The larger the down payment, the higher the principle. • d. The lower the APR, the more interest paid.

39. Question 17

40. BOOYAHBonus Question- All groups Answer

41. The minimum insurance coverage you are required to have in Missouri for your car is:: • a. Comprehensive. • b. Collision. • c. Liability. • d. Full.

42. Question 18

43. Tom has liability insurance for his truck. With this insurance what is covered if he gets in an accident? • a. Injuries to himself. • b. Injuries to the other driver and their automobile. • c. Damages to his truck. • d. Towing charges for his truck.

44. Question 19

45. Comparison shopping for a vehicle is necessary because: • a. Large purchases do not need to be planned. • b. The price does not matter; choose the vehicle based on personal preference. • c. Different dealers offer the same prices on different options. • d. The vehicle price is not the only cost involved with owning a vehicle.

46. Question 20

47. Electronic banking allows customers to: • a. Access accounts only during business hours 9 hours a day. • b. Perform transactions with the help of a teller during business hours. • c. Perform transactions via electronic fund transfers 24 hours a day. • d. Stop reconciling accounts because of the electronic tracking.

48. Question 21

49. Identify how a young adult can begin to establish a good credit rating. • a. Get a small bank loan or credit card and make your payments on time. • b. Keep high balances on various credit cards. • c. Open as many credit card accounts as you can. • d. Nothing. A person begins with a good credit rating.

50. Question 22