Foundations in Personal Finance Exam Review Topic 1

Foundations in Personal Finance Exam Review

Topic 1 Topic 2 Topic 3 Topic 4 Topic 5 100 100 100 200 200 200 300 300 300 400 400 400 500 500 500

Question 1 - 100 • Joe tries to bargain at an electronic store but is unable to negotiate a deal. What should his next step be?

Answer 1 – 100 • Walk away

Question 1 - 200 • “The Lucky Seven” rules can get you incredible deals on stuff you buy everyday, but they only work if you:

Answer 1 – 20 • Use them

Question 1 - 300 • The Federal Trade Commission found that people who work having more debt than they can handle were more likely to be victims of consumer fraud involving:

Answer 1 – 300 • Credit repair and debt consolidation

Question 1 - 400 • Name three ways why using cash is a great bargaining tool:

Answer 1 – 400 • Immediacy • Visual • Emotional

Question 1 - 500 • Explain why students should learn about personal finance?

Answer 1 – 500 • Learning to manage money at this stage can eliminate financial mistakes and promote huge financial benefits for the future.

Question 2 - 100 • What is NOT recommended if you are trying to get a good deal?

Answer 2 – 100 • Buying only name-brand products

Question 2 - 200 • What is NOT recommended when selling something?

Answer 2 – 200 • Find an uninformed buyer and charge them more

Question 2 - 300 • Personal financial success is primarily a result from what?

Answer 2 – 300 • Managing your money behavior

Question 2 - 400 • Name three consequences of spending more than you make:

Answer 2 – 400 • Missed opportunity to save and invest • Cycle of debt • Stress

Question 2 - 500 • What best describes how Americans are being outsmarted by banks and other lenders?

Answer 2 – 500 • Credit is marketed so well that we desire to have it while completely dismissing the fact that interest rates and fees continue to destroy our financial well-being.

Question 3 – 100 • When it comes to managing money, success is about ___% knowledge and ___% behavior.

Answer 3 – 100 • 20, 80

Question 3 - 200 • When it comes to personal finance, the math is easy. What’s challenging is managing your _____.

Answer 3 – 200 • Behavior

Question 3 - 300 • During the Great Depression, New Deal policy makers came up with mortgage and consumer lending policies that convinced commercial bankers that:

Answer 3 – 300 • Consumer credit could be profitable

Question 3 - 400 • Name four common marketing tactics are:

Answer 3 – 400 • Personal selling, financing, repetition, and product positioning

Question 3 – 500 • The widespread financial insecurity of Americans is primarily because:

Answer 3 – 500 • The saving rate in America is low and many borrow in order to spend more than they earn

Question 4 - 100 • What concept is best explained by statement, “Money spent here cannot be spent there. ”

Answer 4 – 100 • Opportunity Cost

Question 4 - 200 • Identify the method companies are using to compete for your money: car salesman

Answer 4 – 200 • Personal selling

Question 4 - 300 • Dave tells a story of a man who bought his dream car, drove it home, but then returned the car the next day after some money calculations. This story is an example of:

Answer 4 – 300 • Buyers remorse

Question 4 - 400 • The purpose of insurance is to:

Answer 4 – 400 • Transfer financial risk

Question 4 - 500 • List three things you should do when communicating with your parents about money:

Answer 4 – 500 • Communicate your wants, needs, and money goals • Be honest • Be a good listener

Question 5 - 100 • Men tend to find good deals by:

Answer 5 – 100 • Negotiating

Question 5 - 200 • The number one cause of divorce in America is:

Answer 5 – 200 • Money fights

Question 5 - 300 • For women, the _____ is the most important key to financial security.

Answer 5 – 300 • Envelope System

Question 5 - 400 • Saving is about:

Answer 5 – 400 • Contentment and earning money

Question 5 - 500 • What does it mean to have a negative savings rate?

Answer 5 – 500 • Spending more money then you make and acquiring debt