NAF Exam Study Guide questions and answers 100% guaranteed success.

NAF Exam Study Guide questions and answers 100% guaranteed success. Financial Literacy - correct answers.Being Financial Literate is when your able to manage your money well, plan for the future and make reasonable decisions. Needs - correct answers.Things you can't live without Wants - correct answers.Things you would like to have Time value of Money - correct answers.It refers to the idea that a dollar in hand today is worth more than a dollar in the future. In other words, money avaliable now is worth more than the same amount in the future. Interest - correct answers.It is a payment made in exchange for using money over time. Interest part 2 - correct answers.If you borrow money from the bank, you pay the bank interest. If you lend the bank money, it pays you interest. Future Value - correct answers.It refers to the value an investment at some point in the future. Simple interest - correct answers.Simple interest refer to the interest that you earn on your money. Simple interest is paid when the interest is not reinvested each interest period. (linear) Compound interest - correct answers.Refers to the interest that you earn on your money. The processor compounding refers to earning interest on your interest. (exponential) Financial Service - correct answers.The financial services industry helps people, businesses, and governments manage their money. They are heavily regulated by the government and they keep money flowing through the economy. Financial service institutions may - correct answers.Hold an protect people's money, lend money people, help people make more money, protect people from being financially hurt by unfortunate event. Examples of financial service institutions are, - correct answers.Banks, credit unions, saving and loans associations, insurance companies Savings account - correct answers.It is a place to keep your money. Checking account - correct answers.Allows you to write checks against the money in the account. Insurance - correct answers.It is a form of risk manage; it protects your finance depending on what of insurance it is (health, car, etc.) Financial Intermediary - correct answers.Is an institution or even an individual who acts as the middleman between those who want to lend money and those who want to borrow it; (etc: commercial banks). Thrifts - correct answers.Are typically savings institutions and include savings and loan associations and saving banks. Specialize in savings accounts and real estate financing Credit Unions - correct answers.Financial institutions formed by an organized group of people with a common bond, such as the one that exist between teachers, government or industry employees Insurance companies - correct answers.Designed to protect individuals and businesses from risks Mutual Fund - correct answers.A professionally managed investment company that pools money from investors and invests the money into stocks, bonds, or other securities Pension Funds - correct answers.Workplace plans designed to provide income for employees when they retire. Capital - correct answers.A business's cash or property Importance of Capital - correct answers.Capital is something that touches everyone, financial intermediaries facilitate the transfer of capital. If a financial institution is struggling, the money it needs to support itself and the economy becomes unavailable, (economy slows down). Cash flow - correct answers.How your money comes and goes Income - correct answers.The money that comes in Earned income- Income from working Portfolio income- Income from managing investments (bonds, stocks) Passive income- Money from items you have purchased or created Expenses - correct answers.Money that goes out Assets - correct answers.Anything you own that has monetary value, (car, house, phone) Liabilities - correct answers.Any debts or payments you owe to an individual or business Wealth - correct answers.What assets are left after you've paid your liabilities What is a SMART goal? - correct answers.Popular method used by individuals and even companies to help provide a framework for how a goal should be created. S.M.A.R.T. - correct answers.Specific Measurable Attainable Realistic Time-Bound Budget - correct answers.Way to keep track of money; financial plan Fixed/Variable expenses - correct answers.Variable expenses change from time to time, (gas price) Fixed don't, (rent) Discretionary expenses - correct answers.Things you choose to spend money on Bank Statement - correct answers.A document issued by a bank to its customers Debit - correct answers.Money paid out Credit - correct answers.Money received Account summary - correct answers.Gives you a quick snapshot of your beginning balance, your total deposits and withdrawals, (money taken out of the account), the total service charges and/or feeds, and you ending balance for the specific statement record dates Online banking services - correct answers.Allow you to do many of the same things you would do in a bank, all on your computer Mobile Banking - correct answers.Its trendy :) Account reconciliation - correct answers.Is a process that compares two sets of forms to make sure they correspond Economic Risk and Market Risk - correct answers.Economic Risk (the investment risk associated with the overall health of the economy) affect the entire market, wheres market risks ( the risk that the value of an investment will decrease due to changes in the market), may affect just one sector.