Personal Finance Unit Test

The bank requires collateral for a loan. What is collateral?

• signed statement that the loan will be repaid
• increased interest rate for a high risk loan
• something of value which bank will receive if loan is not repaid
• money deposited in bank which is greater than amount of loan

Rent is a:

• fixed expense
• discretionary expense
• variable expense
• intermittent expense

Groceries are a:

• Fixed Expense
• Discretionary Expense
• Variable Expense
• Intermittent Expense

The following are guidelines for budgeting with an irregular income except:

• Prioritize the list in order of importance.
• Budgeting w/ an irregular income is no different than w/ a regular income.
• Make a list of all of your expenses for the month ahead.
• When your check comes in, spend your money all the way down the list.

The zero-based budget is the best method of budgeting because:

• This type of budget is less complicated than other types of budgets.
• A zero-based budget allows less money for wants.
• It ensures that every dollar you make is assigned a specific purpose.
• Sticking to a zero-based budget requires less discipline.

Which of the following is not a record-keeping feature you could expect from your bank?

• A reconciliation sheet
• A monthly account statement
• An account register
• Customer service reconciles your account for you

Which of the following account records would have the most current balance?

• Account balance statement from the ATM
• All of these records will have accurate account balances
• Your own account register
• Your monthly bank statement

Which of the following is NOT one of the 3 C's?

• collateral
• creditworthiness
• capacity to pay
• character

Which of the following is not a factor in determining a FICO score?

• Getting a personal loan from a bank
• Using credit cards
• Paying cash for all purchases
• Taking out a mortgage on a house

Which of the following is not a good idea for getting out of debt?

• Quit borrowing money
• Borrow money from your parents to pay for the debt
• Sell something
• Get a part-time job or work overtime