Unit 6 and Unit 7 test

This involves buying and holding property with the goal of generating rental income or appreciation in value.

• Real estate investing

• Stock trading

• Cryptocurrency mining

• Bond purchasing

This refers to the act of paying back a debt or loan over a period of time, typically according to the terms of an agreement between the borrower and the lender. This usually involves making regular payments over a specified period of time, which may include interest charges and fees.

• Amortization

• Depreciation

• Collateralization

• Liquidation

What is the first step in creating a spending plan?

• Analyzing expenses

• Setting financial goals

• Determining income

• Allocating funds

This refers to the act of purchasing a property outright and becoming the legal owner of the house and the land it sits on. Here, they are responsible for maintaining the property, paying property taxes, and any repairs or improvements that may be needed.

• Owning a home

• Renting a home

• Leasing a car

• Taking a vacation

These are a common source of credit for consumers, offering a revolving line of credit that can be used for purchases and cash advances. They often come with rewards programs and other perks, but may also charge high interest rates and fees for late payments or cash advances.

• Credit cards

• Savings accounts

• Certificates of deposit

• Debit cards

What are some strategies for effective debt management?

• Creating a budget, prioritizing debt payments, negotiating payment terms with creditors, and seeking professional help when necessary

• Ignoring debts and hoping they will go away

• Declaring Bankruptcy to clear the debt and start fresh

• Defaulting on loans and declaring bankruptcy

This is a term used in finance to describe a failure to fulfill a financial obligation or debt. When a borrower is unable or unwilling to make payments on a loan or other financial obligation according to the agreed-upon terms, they are said to be in this.

• Default

• Dividend

• Equity

• Amortization

What is the purpose of allocating funds to each financial goal in creating a spending plan?

• To create a budget

• To determine how much money you have left over for discretionary spending

• To prioritize your financial goals based on importance

• To monitor and adjust your spending plan

This is a numerical rating assigned to an individual or business based on their credit history, which is used by lenders to assess creditworthiness and determine the likelihood of loan repayment.

• Credit score

• Interest rate

• Loan term

• Collateral

These are individuals or businesses that offer loans to customers in exchange for collateral, usually in the form of personal property such as jewelry, electronics, or musical instruments. Customers can bring in items of value to a this entity and receive a loan based on the value of the collateral. This entity will hold onto the item until the loan is repaid, at which point the item is returned to the customer.

• Pawn shop

• Bank

• Credit union

• Payday lender