Question 1

The higher the annual percentage rate, the lesser your interest expense on unpaid balances.

Accepted Answer

The statement is false. The higher the annual percentage rate, the higher your interest expense on unpaid balances.

Question 2

Investing involves reducing consumption today in order to acquire assets that build future wealth.

Accepted Answer

Investing requires sacrificing present consumption in order to accumulate assets that will appreciate in value and provide future wealth.

Question 3

Your credit score is a numerical indicator that determines how much credit you should be able to obtain.

Accepted Answer

Your credit score is a reflection of your creditworthiness and is considered by lenders when you apply for credit. The higher your credit score, the more likely you are to be approved for credit and offered a favorable interest rate.

Question 4

Candice purchased an iced coffee from the local coffee shop. Candice's purchase is an example of a nondiscretionary payment.

Accepted Answer

Nondiscretionary payments are essential expenses, such as rent or utilities. An iced coffee is a discretionary purchase, not essential.

Question 5

One key provision of the Dodd­Frank Act was the establishment of the Consumer Financial Protection Bureau.

Accepted Answer

The establishment of the Consumer Financial Protection Bureau (CFPB) is a key provision of the Dodd-Frank Act.

Question 6

The FDIC insures individual deposits up to $250,000 per account in FDIC­ insured banks.

Accepted Answer

The FDIC insures individual deposits up to $250,000 per account in FDIC­ insured banks.

Question 7

Federal law allows credit card companies to charge as much as they want for late fees.

Accepted Answer

Federal law caps credit card late fees, with the Credit CARD Act of 2009 setting limits on how much companies can charge for late payments.

Question 8

The Credit Card Accountability, Responsibility, and Disclosure Act of 2009 requires issuers to give a 5­day notice before making significant changes to credit agreements.

Accepted Answer

The Credit Card Accountability, Responsibility, and Disclosure Act of 2009 requires issuers to give a 45-day notice before making significant changes to credit agreements.

Question 9

A grace period is the period of time you have to pay your credit card balance before interest or fees are assessed.

Accepted Answer

This statement is true. A grace period is a period of time during which a credit card company does not charge interest on new purchases or fees on payments made. This period usually ranges from 21 to 25 days, but may vary depending on the credit card issuer and the terms of the card agreement.

Question 10

A debit card allows you to make "cash­like" purchases, because your bank balance is reduced immediately each time your card is used.

Accepted Answer

A debit card is linked to your bank account and the funds are deducted immediately when you use the card for a transaction, making it similar to using cash.

Question 11

Currently, the most commonly used credit scoring system is the Fair, Isaac and Company (FICO) scale.

Accepted Answer

The most commonly used credit scoring system is indeed the FICO scale.

Question 12

Your ability to purchase goods or resources without making immediate payment is known as an investment.

Accepted Answer

The ability to purchase goods or resources without making immediate payment is actually known as credit, not investment. Investment refers to the act of putting money into a business or project with the expectation of making a profit in the future.

Question 13

You recently purchased 100 shares of Sand Box Software. One benefit of buying and owning these shares is that you are sure to receive dividends.

Accepted Answer

Owning shares of a company does not guarantee the payment of dividends. While Sand Box Software could choose to pay dividends to its shareholders, it is not guaranteed.

Question 14

Nondiscretionary payments include your monthly rent or car payment, which are set by contract.

Accepted Answer

Nondiscretionary payments are obligations that you are required to pay and are typically set by contract, such as rent or car payments.

Question 15

The largest single asset for many households is the equity they have in their home.

Accepted Answer

It is true that for many households, the largest single asset is the equity they have in their home. This can be due to a combination of factors such as rising home values, paying down the mortgage over time, and making improvements to the property.

Question 16

The difference between discretionary costs and nondiscretionary costs is that discretionary costs are less controllable.

Accepted Answer

Discretionary costs refer to expenses that a company incurs voluntarily, such as marketing expenses or employee training. These costs are more controllable as the company can choose to reduce or eliminate them. On the other hand, nondiscretionary costs are essential expenses that a company must incur, such as rent or insurance. These costs are less controllable as they are necessary for the company's operations.

Question 17

You can use your budget to develop your financial plan and to monitor your progress toward achieving your financial goals.

Accepted Answer

Your budget is an essential tool for developing a financial plan, as it helps you identify your income, expenses, and savings. It also allows you to allocate your resources effectively and prioritize your financial goals. By tracking your spending and reviewing your budget regularly, you can monitor your progress and make adjustments as needed to stay on track toward achieving your long-term financial objectives.

Question 18

The benefits of having a credit card include not having to carry cash and the ability to track expenditures.

Accepted Answer

Credit cards allow you to make purchases without carrying cash, and the transactions are recorded on your statement or online account, making it easier to track your expenses.

Question 19

Credit history is the study of financial markets and their impact on interest rates.

Accepted Answer

Credit history is the record of an individual's or company's past borrowing and repayment behavior, not the study of financial markets and interest rates.

Question 20

A checking account is often referred to as a person's "safety net."

Accepted Answer

A checking account is typically used for daily transactions and managing expenses, not as a "safety net," which usually refers to savings or emergency funds.

Quiz 18: Appendix Studentinstructor Review Cards

The higher the annual percentage rate, the lesser your interest expense on unpaid balances.

Investing involves reducing consumption today in order to acquire assets that build future wealth.

Your credit score is a numerical indicator that determines how much credit you should be able to obtain.

Candice purchased an iced coffee from the local coffee shop. Candice's purchase is an example of a nondiscretionary payment.

One key provision of the DoddFrank Act was the establishment of the Consumer Financial Protection Bureau.

The FDIC insures individual deposits up to $250,000 per account in FDIC insured banks.

Federal law allows credit card companies to charge as much as they want for late fees.

The Credit Card Accountability, Responsibility, and Disclosure Act of 2009 requires issuers to give a 5day notice before making significant changes to credit agreements.

A grace period is the period of time you have to pay your credit card balance before interest or fees are assessed.

A debit card allows you to make "cashlike" purchases, because your bank balance is reduced immediately each time your card is used.

Currently, the most commonly used credit scoring system is the Fair, Isaac and Company (FICO) scale.

Your ability to purchase goods or resources without making immediate payment is known as an investment.

You recently purchased 100 shares of Sand Box Software. One benefit of buying and owning these shares is that you are sure to receive dividends.

Nondiscretionary payments include your monthly rent or car payment, which are set by contract.

The largest single asset for many households is the equity they have in their home.

The difference between discretionary costs and nondiscretionary costs is that discretionary costs are less controllable.

You can use your budget to develop your financial plan and to monitor your progress toward achieving your financial goals.

The benefits of having a credit card include not having to carry cash and the ability to track expenditures.

Credit history is the study of financial markets and their impact on interest rates.

A checking account is often referred to as a person's "safety net."

Quiz 18: Appendix Studentinstructor Review Cards

The higher the annual percentage rate, the lesser your interest expense on unpaid balances.

Investing involves reducing consumption today in order to acquire assets that build future wealth.

Your credit score is a numerical indicator that determines how much credit you should be able to obtain.

Candice purchased an iced coffee from the local coffee shop. Candice's purchase is an example of a nondiscretionary payment.

One key provision of the Dodd­Frank Act was the establishment of the Consumer Financial Protection Bureau.

The FDIC insures individual deposits up to $250,000 per account in FDIC­ insured banks.

Federal law allows credit card companies to charge as much as they want for late fees.

The Credit Card Accountability, Responsibility, and Disclosure Act of 2009 requires issuers to give a 5­day notice before making significant changes to credit agreements.

A grace period is the period of time you have to pay your credit card balance before interest or fees are assessed.

A debit card allows you to make "cash­like" purchases, because your bank balance is reduced immediately each time your card is used.

Currently, the most commonly used credit scoring system is the Fair, Isaac and Company (FICO) scale.

Your ability to purchase goods or resources without making immediate payment is known as an investment.

You recently purchased 100 shares of Sand Box Software. One benefit of buying and owning these shares is that you are sure to receive dividends.

Nondiscretionary payments include your monthly rent or car payment, which are set by contract.

The largest single asset for many households is the equity they have in their home.

The difference between discretionary costs and nondiscretionary costs is that discretionary costs are less controllable.

You can use your budget to develop your financial plan and to monitor your progress toward achieving your financial goals.

The benefits of having a credit card include not having to carry cash and the ability to track expenditures.

Credit history is the study of financial markets and their impact on interest rates.

A checking account is often referred to as a person's "safety net."

One key provision of the DoddFrank Act was the establishment of the Consumer Financial Protection Bureau.

The FDIC insures individual deposits up to $250,000 per account in FDIC insured banks.

The Credit Card Accountability, Responsibility, and Disclosure Act of 2009 requires issuers to give a 5day notice before making significant changes to credit agreements.

A debit card allows you to make "cashlike" purchases, because your bank balance is reduced immediately each time your card is used.