Banking
What are the three functions of money ?
Medium of exchange, unit of account, store of value
What is a budget ?
A way to balance income, expenses and financial goals for a specific length of time AND/OR a spending plan based on income and expenses .
What is interest ?
Fee for using other people’s money
What is insurance ?
Contract for financial protection from risk of loss.
What is a stock ?
A share of ownership in a company
What are the two types of bank accounts ?
Checking and Savings
Name two different budgeting strategies.
Options : the 50/20/30 budget, pay yourself first, zero based budget, envelope budget
What is the difference between assets and liabilities ?
Assets are things we own, liabilities are things we owe.
What is a premium ?
The amount you pay for insurance
What is the difference between the bull and bear market ?
Bull market = increasing , bear market = decreasing
What is the criteria for money ? Say at least 3
Options :
Dutable, portable, divisible, uniform, limited, accepted.
What does 50/20/30 budget mean ?
50% of net incomes to needs, 20% to savings, 30% to wants.
What is a credit card ?
Account that represents short term revolving loan.
What are 2 different types of insurance ?
Auto, Renters, Home, Health
What is diversification ?
Spreading risk over variety of asset classes
What percent of your income should you save ?
20 percent
What is cognitive bias ?
A systematic error in thinking or mental shortcut
Name at least two things you should consider when applying for a credit card.
Annual fee, APR, penalty rates, late fees, or grace period.
What are at least 2 factors that determine auto insurance rates ?
Deductible, the make, model, and year, mileage you drive, your driving record, personal info.
How do funds work ?
You’re buying shares in the fund, not individual stocks
Name the type of saving accounts, name at least 2
Traditional, online or high yield, CD certificate of deposit, money market account
Explain what loss aversion is
The pain of loss is twice the joy of gain
Who creates credit reports ?
equifax, experían, tranUnion
Why is a co - payment ?
The fixed amount you pay for medical expense after meeting deductible
What are two types of retirement savings accounts ?
401k and IRA