Banking
Experts recommend that you accumulate enough to cover 3 to 6 __________________ of expenses in your emergency fund.
Months
By receiving a dividend or selling it at a higher price than they bought it.
True or False: Debit, Credit, and Prepaid Cards are all essentially the same.
False
Is an auto loan considered to be secured or unsecured?
Secured
What is an insurance premium?
The amount you pay for insurance coverage regardless of whether you have a claim.
You are at the checkout counter at the local supermarket and use your debit card to pay for your groceries. Where does the money for this purchase come from?
Checking Account
What type of fund is managed by a fund manager who charges a fee?
An actively managed fund
How can you avoid paying interest on a credit card?
Pay it off in full every month
Each time you make a loan payment, what happens to the amount you pay in principal and interest?
The amount applied to principal increases and the amount applied to interest decreases
What is the term for the percentage of covered medical expenses you are responsible for paying after your deductible is met?
Co-insurance
Jocelyn gets a text alert from the bank that her account balance has dropped below $100 after a series of $20 ATM withdrawals. She has not used her ATM in over a week and wonders what she should do. What would you recommend?
Contact her bank as it appears her account may have been hacked.
Generally, as the risk on an investment increases, what happens to the potential for return and the potential for loss?
The potential for return increases, but the potential for loss also increases.
Purchasing something with a credit card essentially means that you are doing what?
Taking out a loan for whatever it is you are purchasing, which you will then have to pay back later.
What is one benefit of having a good credit score?
Lower interest, more likely to get approved, better loan terms
How do insurance companies make money?
By receiving more in premiums than they pay out in claims each year.
FDIC Insurance protects your bank account funds up to this amount of money?
$250,000
What is the difference between an individual bond and a bond fund?
A bond fund is multiple bonds combined and provides greater diversification.
Provide one benefit of using a credit card.
It can be used in emergency situations and/or provide rewards when used properly.
What is the term for paying off a loan slowly over time (hint: killing the loan)?
Loan Amortization
Your renter's insurance policy costs $20/month and has a $1,000 deductible. A thief breaks into your apartment and steals your $800 TV set. How much would your insurance company pay?
$0
How often do customers typically receive a bank statement for their checking account?
Monthly
What is compounding interest?
Interest that accumulates on principal and interest earned.
What is the name for the table that shows information about a credit card (e.g. fees and interest rates)?
Schumer Box
Besides the loan amount, what else might be built into your monthly mortgage payment?
Homeowners Insurance and Taxes
A person who does this job calculates risk in order to determine how much to charge in premiums?
Actuary