standard of living
The primary objective of financial planning is to improve one's __________________.
Almost one third of credit card company profits are derived from _________.
The total _____ of stocks, bonds, savings accounts, cars and real estate owned by an individual is called wealth.
Personal ______ are the things you own.
Financial assets include stocks, bonds, _______ accounts and securities.
________ assets include real estate, cars, artwork and jewelry.
_______ is the amount of satisfaction received by an individual for purchasing goods and services.
Financial compatibility is one of the most important aspects of ________.
_____ term planning should include an emergency fund with 3 - 6 months of income.
Financial goals covering a period of six to forty _____ are called long term.
Liquid assets include cash, deposits in checking and savings accounts, mutual funds, and CDs that ______ within 1 year.
Income and assets can be protected by _________.
Land and _________ are considered real property.
Personal property includes vehicles, furniture, home electronics, and _______.
___________ are purchased to earn a return.
A _________ is represented by the amount of debt we owe.
The difference between assets and liabilities is _________.
A balance sheet is a _______ of a person's or organization's assets and liabilities.
All assets are recorded on the balance sheet at their _______ fair market value.
The government's programs of spending and taxation are called ______ policy.
Government programs for controlling the amount of money in ___________ make up monetary policy.
During an economic expansion phase, __________ and economic activity are both high.
A recession occurs when economic expansion continues to decline for more than ___ months.
Rising ____________ and a falling GDP (gross domestic product) are both early indicators of a recession.
A depression occurs when economic ______ declines to a near halt.
A recovery phase follows a recession or a __________.
Monetary and fiscal policy are the government's two tools for __________ the economy.
Changes in the GDP are used to measure economic ______.
During the height of the ________________, US unemployment reached 25 percent.
The law of supply and demand dictates that when more people want to buy, the price goes up and when more people want to ____, the price goes down.
_________ occurs when the general price level is rising due to excessive demand.
The CPI is used to measure _________.
Social Security payments are increased periodically as the ___ increases.
Stagflation occurs when inflation and ____________ both rise while at the same time economic growth declines.
Purchasing power is the ______ of goods and services that can be bought with our money.
People with the highest incomes are typically in the age group __-65.
The single most controllable factor that affects a person's income is _________.
High rates of _________ tend to drive up interest rates.
In the US, ______ is used to purchase almost every good and service.
Paying for __________ (i.e. stocks and bonds) on credit is called paying on margin.
When an investor purchases stocks or investment real estate with borrowed money this is called ________.
_______ examine a potential borrower's credit history to find out if the borrower is dependable, reliable and responsible.
_______________ is the amount of borrowing a person can realistically handle considering current income and expenses.
Collateral is an asset that is used to ______ a loan.
If you borrow money and use ________ property as collateral for the loan, this is called a chattel mortgage.
Capital is the amount of ______ owned by a borrower that are free and clear.
The ___________ ratio is determined by dividing a person's total monthly consumer credit payments by their monthly take home pay.
Most experts regard 20 percent as the _______ debt safety ratio.
When money is left over after subtracting the total expenses from the total income, the result is a ____________.
Credit extended to a consumer in _______ of any transaction is called open account credit.
Borrowers can avoid paying interest on open account credit by paying the full amount of the account _______ each month.
A ______ statement summarizes transaction charges, interest and fees on a consumer credit account.
A line of credit is the _______ amount a borrower can owe at any time on a credit card.
Most bank credit cards allow the cardholder to obtain a ____________ from any participating bank.
Transferring the balance from one or more credit cards to a new credit card is called a _______ transfer.
A rebate card combines the traditional features of a bank credit card with an additional _________.
In general, the interest rates on ____________ are higher than any other form of consumer credit.
The grace period is the number of days in which you can pay your credit card statement in ____ without being charged interest.
Most credit cards feature a ________ interest rate which is tied to an index which goes up and down depending on the market.
Affinity cards make money for the group backing the card in addition to the ____.
A _______ credit card requires the cardholder to provide collateral before receiving the card.
A _____ card works like writing a check.
A credit bureau collects and stores information about individual _________.
Factors such as ___, annual income, length of time in current job, and level of existing debt are used to determine a borrower's credit score.
The _____ Credit Opportunity Act of 1975 and 1977 prohibits credit discrimination based on sex, marital status, race, religion, or national origin.
The Consumer Credit Reporting Act of ____ requires the full and accurate disclosure of credit information.
The Fair Credit Billing Act of ____ dealt with billing procedures and recourse on unsatisfactory purchases.
With ___________________, a debtor petitions a court for protection from creditors and arranges for liquidation and distribution of their assets.
The result of a ________ bankruptcy is to wipe the slate clean and start anew.
A ________ bankruptcy is more formally known as a Chapter 7 bankruptcy.
The ___________ plan is an alternative to straight bankruptcy in which the debtor makes regular payments to the court which pays off the creditors.
Chapter 11 bankruptcy is for ________ owners and is similar to the wage earner plan.
A combination of straight bankruptcy and the wage earner plan is called a Chapter __ bankruptcy.
Sometimes bankruptcy is caused by a personal catastrophe, but typically it is caused by the individual's _____________ use of credit.
If you've had a bankruptcy in your past, that information may remain in your file for up to __ years.
A _______________ agency may be able to contact your creditors and get your payments reduced.
Home equity lines of credit are among the ________ forms of consumer credit.
A home equity line of credit is similar to a credit card in that it is a _________ credit account.
With a home equity line of credit, your ____ is the collateral.
________ paid on a home equity line of credit is tax deductible.
80 - On a home equity line of credit, most banks limit the maximum loan amount to _____ percent of the equity in the home.
Home equity is the difference between the amount you still owe on your mortgage and the ____________ of the home.
Most people buy a car every ___ years.
Your monthly car payment should be no more than __ percent of your monthly income.
out of pocket
Auto insurance, fuel, tires, and maintenance costs are some of the _____________ costs of operating a car.
The loss in value that occurs over a period of time for an asset (such as an automobile) is called ____________.
If Bob buys a car for $10,000 but is only able to sell it for $7,000 two years later, the depreciation is $_____.
The manufacturer's suggested retail price for a particular vehicle with its options is called the _______ price.
The __________ lease is the most popular form of automobile lease.
Open end leases are used primarily by __________, not individuals.
Often an auto lease specifies the ________ value as the price at which the lessee can buy the car for at the end of the lease term.
The _____ of a leased car is its capitalized cost.
The _______ cost on a lease is called the money factor.
To convert the money rate to the annual percentage rate you must ________ it by 2400.
Most auto leases include a ________ option which allows the lessee to buy the car at the end of the lease.
Generally auto lease terms run ___ years.
The Magnuson-Moss Warranty Act is more commonly known as the federal _____ law.
_____ laws are designed to protect consumers who purchase a defective car, truck, van, SUV, motorcycle, boat or computer.
If you knowingly purchase a car in _____ condition, you accept the defects and void your rights under the lemon law.
Although the ___ doesn't resolve individual consumer complaints, they do enter all complaints they receive into an online database that is used by law enforcement authorities worldwide.
In small claims court, the maximum claim amount varies depending on the _____.
You (do or do not?) need a lawyer to represent you in small claims court.
____________ can be apartments, cluster housing, or town houses.
In a ____ apartment, each tenant owns a share of the corporation that owns the building.
With a cooperative apartment, tenants pay a monthly __________ in proportion to ownership shares, based on the space they occupy.
A big disadvantage of _______ a home versus owning one is that rent is not tax deductible.
A _______________ is a legal document which protects both the lessor and the lessee.
Money that the bank requires a buyer to invest when purchasing a home is called ______.
loan to value
The _____________ ratio is the maximum percentage of the property value that the bank is willing to loan.
In general, the bank will require the buyer to purchase private mortgage insurance if the down payment is less than __ percent.
Mortgage ______ are up front fees charged by a lender.
Truth in Lending
Under the ________________ Law, lenders are required to quote their rates in terms of APR.
Buyer closing costs include the down payment, ________ fees, insurance, mortgage points, appraisal fees, taxes, inspections, title search, etc.
A ________________ letter is obtained from a bank or finance company prior to shopping for a home and includes interest rates, down payment information and the size of the loan the borrower can expect approval for.
Earnest money is a _______ pledged by the buyer as a show of good faith when making an offer to purchase real estate.
The purpose of a ____________ is to verify the property has no liens or encumbrances and that the seller has the legal right to sell it.
A mortgage loan is secured by the ________.
A _______ statement is provided to both the buyer and seller before and after the closing.
A balloon payment mortgage features a ______ large payment due at a later date.
With a fixed rate mortgage, your ________ remain the same throughout the life of the loan.
Choosing an __________ rate mortgage offers the advantage of a lower initial interest rate to the borrower than a competing fixed rate loan.
On an adjustable rate mortgage, the interest rate cap is the _____ the interest rate can increase.
Loan payments that are lower than the amount of monthly interest charged results in ________ amortization.
The money a buyer puts down on a home is kept in an Escrow account until _______.
city and county
Title companies search _______________ records to verify the home you're buying has a clean title.
When buying a home, a professional __________ is designed to evaluate the physical aspects of the house.
One way to obtain a lower ________ rate home loan is to pay points.
________________ is informal and is based on information you provide the lender.
___________ is a formal process where the lender verifies the financial information you provide and runs a credit check on you.
An ____________ schedule shows how much of the mortgage payment will be applied to principal and how much to interest over the life of the loan.
In the early years of a mortgage, the majority of the payment is applied to ________.
PITI is an acronym that stands for principal, interest, property taxes and homeowner's _________.
When making a monthly mortgage payment the principal and interest go toward the loan and the tax and _________ goes into an escrow account.
The ____ of a mortgage refers to how many years it will take to pay off the loan.
When interest rates fall, it's possible to lower your payments by ___________ your mortgage.
Real estate ___________ are paid by the seller at closing.
The FHA does not make direct loans but instead _______ loans made by private lenders.
Gross income includes all income subject to _______ taxes.
Non-investment income, such as wages and salaries, tips and bonuses is classified as ______ income.
Earnings from ___________ are classified as portfolio income.
Income from ___________ and tax shelters is classified as passive income.
Capital gains are taxes assessed for making a profit selling stocks, bonds, and ___________.
Subtracting deductions and exemptions from _____ income results in taxable income.
head of household
An unmarried taxpayer who pays more than half of the costs for maintaining a home and an eligible dependent child or relative files taxes as _________________.
Married taxpayers can file separately or they can file a _____ federal income tax return.
___________ taxes include city, state, and federal income taxes as well as social security taxes (FICA).
In addition to your paycheck, _______________, bonuses, and pensions are also subject to withholding taxes.
Federal income taxes are filed on a ____ form.
_________ tax payments for federal income taxes must be submitted with a Form 1040ES.
_____________ persons are required to file federal income taxes annually and pay estimated taxes quarterly.
Form _____ is designed for taxpayers who can file a more simplified tax return than Form 1040 and yet are ineligible to file Form 1040EZ.
Filing an _______ federal tax return is done on Form 1040X.
Your employer determines how much money to ________ from your paycheck based on information you provide on a W-4 form.
On a W-4 form, the ____ exemptions an employee claims, the less that is withheld from his pay.
Your W-4 form changes whenever you get married, divorced, or have a _____.
Each January, your employer provides you with a W-2 form which indicates your earnings and withholdings for the ________ year.
The ____ form is a substitute for the W-2 form.
Taxpayers who don't have many deductions to claim can use the ________ deduction.
Itemized deductions are the alternative to using the ________ deduction.
If you make a _______ on your tax return, you can file an amended return.
Children who are ________________ can be claimed as dependents until age 24.
When calculating federal income tax deductions, taxpayers can deduct state and local income taxes or _____ taxes but not both.
A tax credit is a direct dollar for dollar _________ of total federal taxes due.
Single persons with no __________ can file a form 1040EZ.
________ deductions are listed on Schedule A of a 1040 form.
Married taxpayers can exclude up to $500,000 profit earned from the sale of a ____.
A progressive tax structure is one in which the ______ the amount of taxable income, the higher the tax rate.
Federal tax returns are due by ________ each year.
Each year the IRS randomly selects some returns for a _________.
________ agents are federally licensed and have passed a rigorous 2 day exam administered by the IRS.
When using a professional tax preparer, the ________ has primary responsibility for the accuracy of the tax return.
_______ activity such as overstating deductions and omitting income is called tax evasion.
Tax avoidance is the process of legally reducing taxes in ways that are compatible with the intentions of ________.
Creating trusts, custodial accounts and transferring income producing property as gifts are all examples of income ________.
____ taxes apply to gifts of personal property, real estate, and both direct and indirect gifts.
Income earned in a traditional ___ is an example of tax deferred income.
Income earned on municipal bonds is an example of tax ____ income.
____ free use of property is not taxable.
The ______________ tax is the biggest of all possible taxes arising at one's death.
In 2006, the ______________ tax paid on estates valued at over 2 million dollars was 46 percent.
In addition to private tax preparers, taxpayers can also use tax ________ to calculate their federal and state income tax payments.
Through the _________________ Tax Act of 1981 (ERTA), the Reagan administration accomplished several goals including across the board tax cuts.
The purpose of insurance is to protect you and your family from the _________ hardships associated with accidents, illness or death.
__________ insurance policies exist that will cover up to 70 percent of your income.
Any activity intended to reduce the likelihood that a loss will occur is called loss __________.
An activity which reduces the severity of a loss once it occurs is called loss _______.
Insurance companies use underwriters to determine who is eligible for insurance and how much the ________ will cost.
_______________ can be an effective method to cope with many types of small exposures to risk where insurance would be too expensive.
If someone who is afraid of dying in an air crash refuses to fly, they are practicing risk _________.
An insurance ______ is a contract between you and the insurance company.
The money you agree to pay the insurance company is called the _______.
A ___________ clause is a provision found in some health insurance policies that indicates the insurance company will only pay a portion of the insurance claim and not the entire amount.
For a monthly fee, HMO members receive a wide range of health care services, including hospital surgical and __________ medical care.
The purpose of ____ insurance is to protect your dependents from the financial loss associated with your death.
Credit insurance, also known as credit ____, is one of several kinds of insurance sold through lenders.
Life insurance benefits paid to your beneficiaries (are, are not?) taxable. _______.
In the event that no named ___________ survives the insured, typically the estate of the insured receives the death benefit.
________ life policies are more investment vehicles than they are life insurance products.
With the multiple of earnings method, the amount of life insurance you purchase is determined by multiplying your gross ______ earnings by some number.
Most insurance agents recommend that your life insurance coverage equal 5-10 times your current ______.
The ______________ method takes into account both your financial obligations and financial resources.
You should review and adjust your life insurance policy at least once every _ years.
Social Security Survivor's benefits are intended to provide basic support to families faced with the loss of their principal ____________.
18 or 19
Social Security survivor benefits are paid to unmarried children until age ________.
Nonworking surviving spouses can receive survivor benefits until their children reach age __.
A surviving spouse can receive partial Social Security survivor benefits as early as age __.
If a widow or widower is disabled, they can begin receiving social security survivor benefits at age __.
Someone in excellent ______ is usually considered preferred and pays the lowest premium.
With a ________ term life insurance policy, the coverage remains the same, but the premium may increase.
With a decreasing term life insurance policy, the coverage decreases but the _______ does not change.
_____ life insurance provides death benefits and has a savings feature called cash value.
Some people choose _____ life insurance because the periodic payments force them to save regularly.
__________ premium offers the greatest amount of death protection and the least amount of savings per premium dollar.
The higher the __________, the lower the premium.
The cheapest form of life insurance is ____ life.
Whole life, variable life, universal life and variable universal life insurance policies are all classified as __________ insurance.
The result of __________ earnings on paid in insurance premiums is called cash value.
Term life insurance doesn't have any cash value and is purchased for a fixed amount of protection for a _____ period.
__________ insurance provides income to a worker who becomes unable to work due to sickness or injury.
The ____________ insurance program is administered by the States.
The _________ component of a car insurance policy pays for damages to property and injuries to people caused by you.
To receive payment through _________ motorist insurance, you must prove that another motorist was at fault, damages were incurred, and that the motorist has no insurance or too little insurance.
Uninsured motorist insurance protects the insured and the insured's passengers from _____________ losses resulting from an automobile accident caused by an uninsured motorist.
If your car is old and isn't worth much, it doesn't make sense to carry _________ insurance.
If your car were to be damaged by fire, hail or water, _____________ insurance would pay for the loss.
Comprehensive homeowners insurance (does / does not?) cover damage from floods, landslides, and earthquakes. ________
In addition to factors such as age, sex, and _______ record, how much you pay for insurance is influenced by your credit history.
You should avoid filing insurance ______ for small losses.
Medigap is a type of private insurance designed to supplement ________ coverage.
_______ insurance comes in various plans that are labeled A through L.
The principle of _________ states that insurance will pay no more than the actual financial loss suffered.
COBRA is a law that allows a person to maintain their group ________________ coverage for up to 18 months if they lose their job.
_____ is a law that was designed to protect the privacy of patient medical records.
The day to day administration of liquid assets by an individual or family is called _______________.
Issued by the US Treasury, T-bills are _____ term highly marketable securities.
Issued by the US Treasury, savings bonds mature in about _ years.
Savings bonds and T-bills are examples of loans we make to the _______ government.
A _______ account is a loan to a financial institution.
_______ accounts have the highest level of pledge value of any investment.
_________ bonds are loans made to cities and states.
Deposit insurance protects deposits at banks against institutional _______.
The ____ insures accounts in commercial banks and mutual savings banks.
A ________ account held at a bank is an example of a demand deposit.
Savings accounts are an example of _____ deposits and are expected to remain in the bank longer than demand deposits.
A ___ account is a type of interest bearing checking account.
An MMDA is an insured savings account offered by banks and are intended to compete with ___________ accounts.
A ___________ is a widely diversified portfolio of securities which is sold to the public by an investment company.
With __________ mutual funds, the fund manager is allowed to buy and sell securities at will.
___________ 12(b)-1 fees were designed to help cover distribution and marketing expenses.
____ are similar to mutual funds.
With an _______ type security, interest is paid when the security is cashed in, not periodically.
A checkbook ______ is used to maintain accurate records of checkbook transactions.
An _________ results when a check is written that exceeds the current account balance.
When an account holder orders the bank to refuse payment of an issued check, this is called a ____________.
Investing involves purchasing __________ which are stable and offer a somewhat predictable level of return.
To buy and sell securities which have a very uncertain future value is ___________.
A _____ certificate implies partial ownership of a business.
_____ refers to how much money your investments or savings will earn.
Dividends are a portion of the _______ a company distributes to its stockholders.
The SEC is the federal agency that regulates the trading of ______.
over the counter
Nasdaq stocks are commonly referred to as ________________ stocks.
Stocks traded on the Nasdaq and the AMEX are generally riskier than stocks traded on the ____.
With _____, the market value may change but the yield you receive while you own it will remain constant.
With bonds, you will get back your principal on the ________ date.
High risk bonds are also known as ____ bonds.
______ risk is the possibility that a company can't make the scheduled principal and interest payment it owes you.
________ bills are short term and mature in one year or less.
Municipal bonds pay interest ____________.
The more frequent the ___________ of interest, the higher the return to the investor.
The default risk on _________ bonds is very low.
The income from _________ bonds is taxable at the federal, state and local level.
Interest earned on ________ savings and money market accounts is fully taxable.
The main disadvantage to ________________ accounts is their low interest rates.
The current price of a stock divided by its most recent ____ quarters of earnings is called the price earnings ratio.
Preferred stock pays a ___ dividend each quarter.
______ REITs own office buildings, condominiums, hotels, apartments, and industrial plants. Mortgage REITs provide permanent mortgages and short-term construction loans.
All ______ corporations, as well as mutual funds, file reports with the SEC.
The biggest pitfalls to a sound __________ include starting too late, saving too little, and being too conservative with investments.
CDs and Treasury notes are examples of low yield, _____ income securities.
The three main sources of income for retired people are _______________, assets, and pension plans.
The single largest source of income for the average American retiree is _____________________.
Employees of state and local governments are exempt from mandatory participation in the _______________ system.
To qualify for full retirement benefits, workers must be employed in a job covered by Social Security for at least __ years.
The cash benefits paid out by Social Security are derived from ____ taxes.
For people born in 1960 or later, full retirement age is age __.
Workers can retire as early as age __.
When you work and pay Social Security taxes, you earn up to a maximum of ____ credits for each year.
The number of work credits you need to qualify for Social Security __________ benefits depends on your date of birth.
A _______ is the specific property or money given to a beneficiary.
A trust is a ________________ way of passing property or money to a beneficiary.
A trustee is a person appointed by the will to take legal ownership of the property, the benefit of the ownership of which is to go to ______.
A will that is prepared in the handwriting of the testator is called a ___________ will.
When a person dies _________ (without leaving a will), his property must be disposed of in accordance with the law and to do that the probate court appoints an administrator.
_______ is a court proceeding in which the validity of a will is established.
_____ changes to a will can be made via a document called a codicil.
Before the _________ can receive their shares of the estate, remaining debts, funeral expenses, and taxes must be paid.
The clause in a will in which the witnesses confirm that they performed their duties in accordance with the law is the ___________ clause.
A person who makes out a will is called the ________.
In the ___________ clause of a will, the testator states that he is signing the document as his last true will and testament.
A ________ is a person who has died.
A ___________ is a bequest where the beneficiary is given the use of a designated property for the remainder of his life.
The trustee is the institution or person who has _______ of someone else's property or money to be given to a third party.
The person or institution named in a will to handle the estate is called the ________.
The most important deduction that can reduce estate tax liability is the _______ deduction.
The goal of estate planning is to ______________ while still having your wealth go where you want it to go.
An estate is considered _________ if after paying all debts and expenses, nothing remains for the survivors.
If you receive property as an inheritance and later sell it at a profit, that ______ is subject to income taxes.
______ taxes are paid out of the estate's assets before anything is distributed to the heirs.
When business partners take out life insurance on the life of each other, this is called _______ life insurance.
In the context of estate planning, ____________ refers to who gets what.
It's possible to be affected by the estate laws of more than one _____.
An estate ______ is the best qualified individual to manage the problems of estate planning.
During the initial estate planning meeting, you should inform the lawyer of all your assets, liabilities and your estate planning __________.
Liquidity refers to the ability to convert assets quickly to ____.
Liquidity is important not only because it allows your survivors to continue to pay their bills, but liquidity is also essential so that any ____________ that arise can be paid when due.
One of the key reasons one's wealth increases gradually over time is _________.
With a Roth IRA the money you invest is not tax deductible but the earnings are ________.
A standard IRA is tax ________.
A _____ plan allows self employed individuals to set up a self directed retirement account for themselves and their employees.
A SEP-IRA is similar to a _____ account and is targeted at small business owners who want a plan that is simple to set up and administer.
A non-contributory pension plan is one that is funded entirely by the ________.
Tax ________ provide ways to legally reduce or defer taxes.
Insolvency, reduction of days in account receivables, increasing collection rates, selecting
shortterm investment and increasing days cashonhand are characteristics of what type
15 Years Fixed Rate
Mortgage and 30 Years Fixed
Two types of fixed rate mortgages are: _____
The percentage of a yearly gross income dedicated toward paying each month mortgage
is known as _____
An unbiased examination and evaluation of the financial statements of an organization is
known as _____
_____ insurance offers protection for your entire life and more flexibility
Whole Life Insurance
A predictable policy that provides a guaranteed benefit and earning rate on cash value
and level premium are known as ____
An added layer of security for those at risk for being sued for damages to other people's
property or injuries caused to others in an accident it protects against libel, vandalism,
slander and invasion of privacy is known as _____
Policy limit fair of fair
market of structure
In the case of total loss of the structure, what must be considered for the Actual Cash
Value (ACV) to be determined
A policy that allows the individual to choose any doctor and hospital that the individual
wish when seeking health care services is known as _____
Dollar Cost Average
The technique of buying a fixed dollar amount of a particular investment on a regular
schedule, regardless of the share price is known as _____
Standard and Poor
A financial services company that rates stocks and corporate and municipal bonds
according to risk profiles