Wise Practice Test Study/88 Questions and
Answers with correct solutions.
budget variance. - -the difference between the budgeted amount and the actual amount
that you spend
-debt ratio - -shows the relationship between debt and net worth.
-debt ratio - -The lower the ratio the better off financially the person is.
-debt ratio - -calculated by dividing liabilities by net worth
-excise tax - -government imposes a tax on specific goods and services such as alcohol,
cigarettes, gasoline, and airline
-capital gains - -are profits made from the sale of capital assets such as stocks and
bonds
-Capital gains - -tax deferred until the asset is sold,
-Capital Gains Tax - -If held over one year are considered long-term capital gains and
are taxed at a lower tax rate or in some cases are not taxed at all.
-variable expenses - -change from one period to another,examples Electricity and food
expenditures
-get advice from your friends - -will help you the least in managing your money?
-Financial planning - -the process of developing and implementing a coordinated series
of actions to achieve financial success.
-Financial planning - -need to be reviewed and adjusted to accommodate changing
needs and goals.
-emergency fund - -Should be an important consideration when saving money
-liquidity - -being in cash or easily convertible to cash, How easily an asset can be
converted into cash
-Social Security - -benefits depends on the person?s earnings over a lifetime of work
-Department store charge cards. - -open-end credit
-Department store charge cards. - -is a revolving live of credit that is offered by banks
There is a limit set on the line of credit and the funds
-mortgage loan - -closed-end credit,made at a specified interest rate for a specified time
period.
, -collateralized loan. - -A loan that is secured by collateral, properties or assets that are
subject to seizure on default.
-collateralized loan. - -When a person brings an item to a pawnshop to obtain cash, the
transaction is considered
-Federal Housing Administration (FHA) loan - -insures lenders who make mortgage
loans that are riskier than regular bank loans because
-uncollateralized loan - -A personal loan without assets to cover the loan amount.
-Collateral - -tangible asset that is used to secure a loan. In the case of a mortgage, the
actual house or apartment serves as the collateral for that loan.
-bankruptcy - -will appear on the person?s credit report for 10 years
-Notify the credit card companies in order to negotiate a new payment plan. - -Notify
the credit card companies in order to negotiate a new payment plan.
-Installment loan - -a loan repaid with interest in equal periodic payments
-dispose of a credit card - -Cut up the card, put parts in different garbage bags, and
instruct the credit card company in writing or by phone to close the account
-Garnishment - -Occurs when a creditor obtains a court order requiring an employer to
attach an employee's earnings in order to pay back a debt.
-rate of inflation - -determines the time value of depositing into a savings account, and
the interest rate and
-Rising interest - -Can lower stock prices because of lower business profits
-Short-term savings instruments - -your money will be available to invest in a higher
interest instrument in the near future.
-Short-term savings instruments - -Which investment would you choose today if you
believe interest rates will go up?
-Credit unions - -Credit unions usually pay the highest rates of interest because they
have lower risks and costs of operation. They are not-for-profit organizations
-Truth in Lending Act - -The Truth in Lending Act requires that the finance charge and
annual percentage rate be disclosed to the consumer in advance
-Finance charge - -The finance charge is the amount charged by the lender for any kind
of credit
-Finance charge - -Finance charge = principal x stated interest rate x time (in years).
The finance charge is used to calculate the annual percentage rate (APR)
Answers with correct solutions.
budget variance. - -the difference between the budgeted amount and the actual amount
that you spend
-debt ratio - -shows the relationship between debt and net worth.
-debt ratio - -The lower the ratio the better off financially the person is.
-debt ratio - -calculated by dividing liabilities by net worth
-excise tax - -government imposes a tax on specific goods and services such as alcohol,
cigarettes, gasoline, and airline
-capital gains - -are profits made from the sale of capital assets such as stocks and
bonds
-Capital gains - -tax deferred until the asset is sold,
-Capital Gains Tax - -If held over one year are considered long-term capital gains and
are taxed at a lower tax rate or in some cases are not taxed at all.
-variable expenses - -change from one period to another,examples Electricity and food
expenditures
-get advice from your friends - -will help you the least in managing your money?
-Financial planning - -the process of developing and implementing a coordinated series
of actions to achieve financial success.
-Financial planning - -need to be reviewed and adjusted to accommodate changing
needs and goals.
-emergency fund - -Should be an important consideration when saving money
-liquidity - -being in cash or easily convertible to cash, How easily an asset can be
converted into cash
-Social Security - -benefits depends on the person?s earnings over a lifetime of work
-Department store charge cards. - -open-end credit
-Department store charge cards. - -is a revolving live of credit that is offered by banks
There is a limit set on the line of credit and the funds
-mortgage loan - -closed-end credit,made at a specified interest rate for a specified time
period.
, -collateralized loan. - -A loan that is secured by collateral, properties or assets that are
subject to seizure on default.
-collateralized loan. - -When a person brings an item to a pawnshop to obtain cash, the
transaction is considered
-Federal Housing Administration (FHA) loan - -insures lenders who make mortgage
loans that are riskier than regular bank loans because
-uncollateralized loan - -A personal loan without assets to cover the loan amount.
-Collateral - -tangible asset that is used to secure a loan. In the case of a mortgage, the
actual house or apartment serves as the collateral for that loan.
-bankruptcy - -will appear on the person?s credit report for 10 years
-Notify the credit card companies in order to negotiate a new payment plan. - -Notify
the credit card companies in order to negotiate a new payment plan.
-Installment loan - -a loan repaid with interest in equal periodic payments
-dispose of a credit card - -Cut up the card, put parts in different garbage bags, and
instruct the credit card company in writing or by phone to close the account
-Garnishment - -Occurs when a creditor obtains a court order requiring an employer to
attach an employee's earnings in order to pay back a debt.
-rate of inflation - -determines the time value of depositing into a savings account, and
the interest rate and
-Rising interest - -Can lower stock prices because of lower business profits
-Short-term savings instruments - -your money will be available to invest in a higher
interest instrument in the near future.
-Short-term savings instruments - -Which investment would you choose today if you
believe interest rates will go up?
-Credit unions - -Credit unions usually pay the highest rates of interest because they
have lower risks and costs of operation. They are not-for-profit organizations
-Truth in Lending Act - -The Truth in Lending Act requires that the finance charge and
annual percentage rate be disclosed to the consumer in advance
-Finance charge - -The finance charge is the amount charged by the lender for any kind
of credit
-Finance charge - -Finance charge = principal x stated interest rate x time (in years).
The finance charge is used to calculate the annual percentage rate (APR)
