As inflation rises interest rates offered to savers usually increase
true
In determining the purchase price of a new car, a trade-in vehicle should not be mentioned until the cost of the new car has been settled
true
Service contracts on vehicles usually are wise financial decisions
false
Abigail checked out brand name prices of blue jeans at several stores, she was impulse buying
false
Liquidity and rate of return are the same thing
false
Risk-based pricing charges lower rates to riskier customers
false
Closed-end credit is used for a specific purchase and involves a specific amount
true
Consumer credit payments should not exceed 20% of your net income
true
It is important to shop for credit
true
You should determine the financial services you need before choosing a financial institution
true
Bankruptcy should be the last resort because of its damage to your credit rating
true
APR is the percentage cost of credit on a yearly basis
true
The more new cars sold, the more used cars there are for Salem keeping the prices down
true
You should avoid lowballing when price bargaining for a new car, but highballing is okay
false
An asset management account is an all in one account that is also called a cash management account
true
Open end credit consists of loans made on a consistent basis for periodic payment
true
Fico and vantage score are used by creditors to predict if you will repay a loan
true
A loan from a pawn shop will be more expensive than one from a bank
true
Money market fund not covered by Federal Deposit Insurance
true
Closed end credit is used for specific purposes and involves a specific amount
true
During problem identification, a clear statement of a problem is: I need to have a car
false
Long term stability is achieved by spending your entire current income
false
A lease on a car is usually 3-5 years
true
what do we also call a demand deposit?
checking account
Asset management account (cash statement account) is an all in one account
true
what's another name for a regular savings account?
passbook savings or statement accounts
which of the following is a valid reason to use credit?
all of the following
what are 4 common money management mistakes?
overspending, insufficient liquid assets, using savings to pay for current expenses, & failing to put unneeded funds in an interest bearing savings account
what are 2 sources of quick cash that reduce net worth?
liquidate savings and borrow
what is the rate banks charge large corporations called?
prime rate
what are 3 questions to ask before choosing a financial institution?
where can I get the best return? how can I minimize costs? will I be able to borrow?
what are the 5 C's of credit?
character, capacity, capital, collateral, and conditions
what do you call an agency that collects information on how promptly people and businesses pay their bills?
credit bureaus
what are the 4 steps to research-based buying?
pre-shopping activities, evaluating alternatives, selection and purchase, and post-purchase activities
what is a money factor also called?
interest rate
what is the invoice price also called?
dealer's cost
what is the term for when your car is worth less than the amount still owed on the loan?
upside down equity
What type of company provides loans for home purchases
mortgage company
Which of following is not a valid reason for borrowing
paying for everyday living expenses
Greatest disadvantage of credit
temptation to overspend
Standard measurement for comparing cost
unit pricing
Insurance of used car can be deceptive what should you always do
test drive and have trusted mechanic of your choice check it out
When misused credit can result in
all of the above (default, bankruptcy, loss of credit worthiness, and a less satisfying life)
What do we call property or savings that we use to secure a loan?
collateral
Sally had a major problem with her car and thinks many other have had the same problem. What is the best way to solve the problem?
class action law suit (court)
The ability to turn your investment into cash
liquidity
Fair Credit Reporting Act places limits on who can view your credit report
true
a legal aid society provides free legal aid to low-income individuals with funds passed through the state welfare department from the U.S. Department of Health and Human Services
true
Thomas bought and returned a vehicle, refused to accept return because it was sold "as is." this is an example of a limited warranty.
false
Justin needs access to money in 5 months. He needs a fairly liquid investment so he would want to put that in a money market account
true
Mortgage is a:
close-ended credit
Home equity is an:
open-ended credit