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Anika looks through her balance sheet. She is categorizing her liabilities.
Which liability would be considered a short-term liability?
Student loan
Automobile loan
Credit card balance
Mortgage - ANSWER Credit card account balances are considered a short-term
liability, as they can be paid off within one year.
Eva is evaluating her personal budget. She is certain there are things she could do
differently to improve her financial habits.
What is one suggestion that financial experts make to turn bad habits into good
ones?
Search for checking accounts with low monthly fees
Keep checking account balance high
Pay all monthly bills on time
, Open one savings account only - ANSWER Financial experts suggest paying
all bills on time to avoid paying late fees or interest.
Maria knows that she has to keep certain documents secure, especially ones that
relate to her personal budget and net worth.
Which document is an example of a financial document that Maria should keep in
a fireproof home safe?
Copies of income tax filings for the past three years
List of credit card accounts and telephone numbers
List of safe-deposit box contents
Financial institutions and account numbers - ANSWER A list of items that are
stored in a safe-deposit box is an example of a financial document that Maria
would keep at home.
Jack is analyzing his personal budget to see how healthy it is. He knows there are
several ratios that he can calculate to determine health.
Which financial ratio will Jack need to calculate to determine whether he owns
enough things with monetary value to meet his debt obligations?
Debt payments-to-disposable-income ratio
Asset-to-debt ratio
Debt-to-income ratio
Liquidity ratio - ANSWER This is calculated by dividing total assets by total
debt. A high ratio is desirable.
, Leilani wants to save money, and she prefers to do so in a traditional savings
account.
Which monetary asset provider should Leilani use?
Brokerage firm
Depository institution
Insurance company
Mutual funds - ANSWER Depository institutions, or banks, offer many
financial services including checking and savings accounts
Ren learned about the Federal Deposit Insurance Corporation (FDIC), so he wants
to be sure his new savings account is covered.
Which financial institution should Ren use to open an account to be sure it is FDIC
insured?
Depository institution
Brokerage firm
Mutual funds
Bond investment - ANSWER Accounts held at depository institutions are
federally insured to $250,000 per person across all accounts held at that bank.
Oliver wants to grow his monetary assets. He decides to check into purchasing
bonds and other investments.
Which monetary asset provider should Oliver meet with?
Insurance company
Thrift institution
, Stock brokerage firm
Mutual fund company - ANSWER Stock brokerage firms specialize in stocks,
bonds, and many other investments.
What is a reason one should consider opening a savings account at a credit union?
Credit unions have lower required balances than those at a traditional bank.
The federal insurance coverage is $300,000 instead of $250,000 at traditional
banks.
Credit unions charge lower fees and pay higher interest rates than traditional banks
. The account is covered by the Federal Deposit Insurance Corporation (FDIC).
correct - ANSWER Credit unions are a good way to pay less in fees and earn
more interest on deposits.
What is a risk associated with opening an account with a mutual funds company?
There is greater risk with mutual fund investments than with other investments.
The management fees are higher for mutual funds than brokerage firms.
Dividends are not automatically reinvested, so growth is limited.
The account is not insured by the Federal Deposit Insurance Corporation. -
ANSWER These investment companies make money by selling shares and then
use the money for investing. However, these investments are not FDIC insured.J