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5 Written questions

5 Matching questions

  1. Disability Insurance
  2. Tax Credit
  3. Creditworthy
  4. Payroll Deduction
  5. Time Value of Money
  1. a The potential of an investment to increase in value through periodically compounded earnings.
  2. b The presumption that a specific borrower has sufficient assets, income, and/or inclination to repay a loan.
  3. c An amount an employer withholds from a paycheck. Mandatory deductions include various taxes. Voluntary deductions include loan payments, charitable contributions, and direct deposits into financial institution accounts.
  4. d Replaces a portion of income lost when a person cannot work because of illness or injury.
  5. e An amount that a taxpayer who meets certain criteria can subtract from tax owed. Examples include a credit for earned income below a certain limit and for qualified post-secondary school expenses. (See Tax deduction and Tax exemption.)

5 Multiple choice questions

  1. A risk management tool that protects an individual from specific financial losses under specific terms and premium payments, as described in a written policy document.
  2. A legal declaration of a person's wishes for the disposition of his or her estate after death.
  3. Calculating interest on both principal and previously earned interest.
  4. Stock ownership in a corporation.
  5. The quality of an asset that permits it to be converted quickly into cash without loss of value. For example, a mutual fund is more liquid than real estate.

5 True/False questions

  1. Open-end CreditAn agreement with a financial institution that gives a borrower the use of money up to a specified limit for an indefinite time as long as repayment of the outstanding balance and finance charge proceeds on schedule; also known as revolving credit or a revolving line of credit. A credit card is an example.


  2. Contract1. Cost of borrowing money. 2. Earnings from lending money.


  3. RepossessionConfiscation of collateral, often without notice, if a borrower defaults on a loan.


  4. Collection AgencyPhysical objects—such as fine art, stamps, and antiques—that an investor buys in the hope that they will grow in value.


  5. MortgageA long-term loan to buy real estate, that is, land and the structures on it.