Behavior Economics
3 Possible answers:
How does cognitive bias affect you?
limit your problem-solving abilities.
Increase anxiety and depression.
Decision making skills.
What does FDIC stand for?
Federal Deposit Insurance Corporation
Why is investing a more powerful tool to build long-term wealth than saving?
Investing yields higher average rates of return, so your investments will grow more than they would in a savings account.
Each of the following represents an installment loan EXCEPT…
Credit card
True or False:
Banks will cash checks for non-customers for free.
False
what is the Dunning-Kruger Effect
How are credit unions and banks different?
Banks are owned by shareholders, while credit unions are owned by members
What is the advantage of starting to invest at a young age?
You have a longer time horizon, so your money has more time to compound and grow.
Which word represents the total cost of the item you’re purchasing on credit minus any down payment you make upfront?
Principal
True or False:
Online banking systems make it even easier to see and organize purchase history from your desktop or mobile device
True
What is cognitive bias
a flaw in your reasoning that leads you to misinterpret information from the world around you and to come to an inaccurate conclusion.
When reconciling your checkbook, what are you primarily comparing?
Your checkbook register to your bank statements
Which of the following most accurately describes what a bond is?
A bond is an investment in which an investor lends money to a corporation or government and it must be paid back with interest.
Which of these credit payback strategies would lead to the HIGHEST overall cost?
Making the minimum payment (3% of your credit card balance) every month with an occasional late payment
Assuming you have a TCF Free Student Checking Account, which fee would end up costing you extra money?
Out-of-network ATM Fee
What is the Halo Effect
General impresssion of a person is being unduly shaped by a single characteristic
In addition to the written dollar amount, what other security feature is commonly found on modern checks to prevent fraud?
Microprinting
One difference between bonds and bond funds is…
A bond fund can help you diversify your investment portfolio
Duc has a credit card with a $1000 credit limit. His outstanding balance is currently $800. What is the maximum amount he can now spend on this credit card?
$200
Which of these TCF checking account fees is the MOST expensive?
Overdraft Fee
What is Attentional biases
probably evolved in human beings as a survival mechanism, have to evade or avoid threats.
While opening your checking account, the bank representative seems very interested in getting you to sign up for overdraft protection. What might explain his motivation?
He may receive a sales commission if you sign up because banks generate income by charging fees such as overdraft
Which of the following explains why risk is not always bad when it comes to investing?
As risk increases, so does the possibility of greater returns
It’s time for Roxanne to start repaying her student loans, which are amortized over the next ten years. Her first month’s payment due is $396. How much should she expect to owe next month?
Exactly $396
You choose Option B for Overdraft Options. Assume that you have $30 in your checking account and $50 in your savings account. What would happen if you tried to take out $45 at the grocery store using your debit card?
Your transaction would be approved since the bank would transfer money from your savings to your checking account, and you’d be charged a $10 fee.