Credit Cards
DOUBLE POINTS!!!
What is the interest rate charged on borrowed money, expressed as a yearly rate?
What is the Annual Percentage Rate (APR)?
What is a numerical representation of a person's trustworthiness to pay back borrowed money?
What is a credit score?
What is a Bull Market vs a Bear Market?
Bull = Period of the stock market going up, optimism, growth
Bear = Period of the stock market going down, fear, decline
Which branch of the government prepares the budget each year?
Executive Branch
This is the maximum amount of credit that a financial institution extends to a cardholder.
What is a credit limit?
What is the term for the ratio of your current credit card balances to your credit limits?
What is credit utilization?
DOUBLE POINTS!!!
When you buy a stock, what title do you receive, indicating you own a small piece of the company?
What is a shareholder
Spending that Congress can change each year through the appropriations process is known as...
Discretionary Spending
What do you have to do to avoid penalties on a credit card?
Make the minimum payment
How much of your credit score is affected by your payment history?
35%
These investment funds pool money from multiple investors to invest in a diversified portfolio of stocks and bonds.
What are mutual funds?
What is unique about U.S. government shutdowns compared to the rest of the world?
Bonus: What has been the longest government shutdown in U.S. History?
No other country does it, they just continue using last year's spending bill
This one! 36 days baby!
Name at least two advantages of using credit cards.
What are rewards, building credit history, or fraud protection?
Why is having a good credit score important?
It affects loan interest rates, your ability to get loans, and if you're eligible to buy certain items.
What term describes a strategy to reduce risk by spreading investments across different assets?
What is diversification?
What is the federal budget's current deficit and total national debt?
$1.8 Trillion
$38 Trillion
Name at least three common types of rewards associated with credit cards.
Cash back, travel points, fuel points, easier refund process, gift cards, etc
What is a perfect credit score? What range is a "good" credit score?
850
~670 & up
What type of investment is a type of mutual fund that aims to replicate the earnings of the top performers in the market?
Index Funds
Name at least 3 major challenges Social Security faces
Aging population, declined birth rates, increased lifespans, increased disability claims, mismatched workforce to retiree ratios
What is the difference between revolving credit and installment credit?
Revolving - You can borrow up to a credit limit, repay it, and borrow again.
Installment - You receive a lump sum of money and pay it back in fixed amounts over a set period of time.
Describe how each of the following make money in the credit process:
Credit Card companies (Visa, Mastercard, Discover)
Lenders (Chase, Citi, Capital One)
Merchants (Businesses that accept credit cards)
Credit Card companies - Transaction & Merchant Fees
Lenders - Interest & Late Fees
Merchants - By accepting credit cards they expand their customer base
What are the 3 examples of risky investing into a hedge funds that we discussed in class?
Derivatives, short-selling, and leverage
Name the top 6 Federal spending categories
(100 points each)
Social Security, Medicare, Medicaid, defense, interest on the debt, veterans benefits, education