Personal Finance Homework #10

This term pays for protection against loss of life, property, and finances.

• collision

• premium

• insurance

• deductible

The out of pocket cost to the insured when a loss occurs is called...

• Premium

• Deductible

A document containing an individual's financial information focusing on payment of their credit obligations over time

• Net Worth

• Thin File

• Credit

• Credit Report

A three-digit number (ranging from 300-850) based on an individual's credit history detailed in a credit report

• Credit Score

• High Rate Method

• Bankruptcy

• Credit History

A measurement of your assets (money you've saved or things of value you own) minus your liabilities (money you owe others); also called wealth

• Credit History

• Credit Score

• FICO Score

• Net Worth

Which should you use when creating a budget - your NET PAY or GROSS PAY?

• Net pay, because it’s what is reported to the government by your employer for tax purposes

• Gross pay, because it’s the total amount you’ve earned that month

• Net pay, because it’s the total amount you’ve earned minus taxes and other deductions

• Gross pay, because it’s the total amount you’ve earned minus any recurring bills you owe for the month

What is cognitive bias?

• A logical strategy humans use to come to a decision that is in their best interest

• An argument that is based on fact, usually backed up by scientific evidence

• A theoretical-based approach to solving problems that most humans face 

• A systematic error in thinking that can influence humans’ decisions and judgements

All of the following are benefits of taking out a loan with a cosigner EXCEPT…

• There are no penalties for late payments

• You gain access to loans you might not have been approved for on your own

• Your interest rate might be lower

• Your credit score will be positively impacted by making timely payments

Which of the following can be found in your credit report?

• Your checking and savings account balances

• How long you’ve been a member of a bank or credit union

• Your credit payment history

• A list of items you’ve purchased using credit

Which of the following will result in your paying the LARGEST amount of interest to the credit card company?

• Paying 20% of your credit card balance every month

• Making the minimum payment every month

• Paying off your balance every month

• Saying "credit" every time the cashier asks "Debit or credit?"