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