2024 Exam II Finance Questions and Answers 100- Correct(Counts 20- of Course Grade)

2024 Exam II Finance Questions and Answers 100%
Correct(Counts 20% of Course Grade) : MGT 8803

annual percentage rate (APR) - ANSW -the cost of credit on a yearly basis, expressed as a percentage,
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the annualized interest rate on a credit account
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asset - ANSW -any items of value that an individual or company owns including cash, property,
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personal possessions, and investments
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bank reconciliation - ANSW -a report that account for the difference between the bank statement and
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a checkbook balance
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bank statement - ANSW -a list of all transactions for a bank account, according to the bank
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bond - ANSW -a written pledge of a corporation, government, or municipality to repay a specific sum
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of money with interest
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budget - ANSW -a plan for using money to wants and needs
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check - ANSW -a document used to make a payment to an individual or business
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checkbook register - ANSW -a list of transactions for a bank account, according to the individual
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account holder
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checking account - ANSW -ATM withdrawals, writing checks, debit card takes funds directly from
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account, easy transfers to pay bills or shop
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collision insurance - ANSW -insurance that covers damage to your vehicle when it is involved in an
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accident
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common stock - ANSW -a unit of ownership of a company, and it entitles the owner or stockholder to
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voting privileges, this can also provide a source of income if a company dividends
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compound interest - ANSW -interest is earned on both original amount you deposited and any
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previously earned interest
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consumable good - ANSW -purchases that you make often and use up quickly
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credit rating/score - ANSW -a measure of a person's ability and willingness to make credit payments
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on time
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deductible - ANSW -the set amount that the policyholder must pay per loss on an insurance policy
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deficit - ANSW -a financial situation that occurs when more money is spent then earned or received
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(net cash flow is negative)
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demand - ANSW -the amount of goods and services people are willing to buy
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deposit slip - ANSW -a document used to put money into an account
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, direct deposit - ANSW -an automatic deposit of new pay to an employee's designated bank account
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discretionary income - ANSW -the money left over after paying for essentials (food, shelter, clothing,
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transportation, and medication)
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diversification - ANSW -the process of spreading your assets among several types of investments to
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reduce risks
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down payment - ANSW -a portion of the total cost that is required at the time of purchase
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durable good - ANSW -expensive items that last three years or more when used on a regular basis
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economics - ANSW -the study of decisions that good into making, disturbing, and using goods and
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services; the study of the allocation of scarce resources
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Federal Reserve System - ANSW -a central US banking organization, also known as Fed
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1. regulates money supply
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2. sets interest rates
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3. buys and sells government securities
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five Cs of credit - ANSW -1. character (credit history)
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2. capacity (debt to income ratio)
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3. capital (amount of money an applicant has)
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4. collateral (an asset that can back or act as security)
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5. conditions (purpose of a loan, amount of the loan, prevailing interest rates)
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four risk management methods - ANSW -1. risk avoidance
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2. risk reduction
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3. risk assumption
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4. risk shifting
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goals - ANSW -things you want to accomplish
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good - ANSW -a physical item that is produced and can be weighted or measured
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Good budgets should be... - ANSW -carefully planned, practical, flexible, and written and easily
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understood
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hazard - ANSW -anything that increases the likelihood of loss through peril
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How does overdraft protection work? - ANSW -if you overdraw your account, the bank covers the
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purchase and charges you a fee plus the amount of coverage
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inflation - ANSW -a rise in level of prices of goods and services
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