People Money and Pyschology Final
Terms in this set (92)
This is the price that the dealer paid for the automobile.
This is the price that the dealer has marked on the automobile.
Sticker price or MSRP
This information source does independent testing of items and takes no advertising, thus reducing bias in reviewing major purchases.
In house buying lingo, "PITI" stands for this.
Principal, Interest, Taxes, Insurance
The "effective credit interest rate" that you will pay on a loan or card.
This is the total dollar cost of using a loan, found on the promissory note.
For credit cards, this interest calculation method is NOT recommended for people carrying a balance because it averages daily balances for two months instead of one.
Two-cycle average daily balance
The law that states that people cannot be discriminated against in receiving credit due to their retirement status, gender, or race.
Equal Credit Opportunity Act
The law that requires that borrowers be provided with APR, finance charge, and other terms of the loan BEFORE borrowing.
Truth in Lending Act
In automobile insurance, the coverage that covers repairs to your car if you hit a tree (and you, not the tree, are at fault).
In automobile insurance, the insurance that covers costs related to injuries to people in another car if you are at fault.
Personal Injury Liability
If you rent a house or apartment, you will need this type of policy to cover your belongings.
This type of homeowner's coverage covers a limited list of named perils.
In homeowner's coverage, this type of policy covers any perils except those specifically named.
Open Policy (HO3, if you're interested)
When you put more money into your car than it's worth because you can't stand losing that car.
When we ignore the effects of inflation or taxes
When we search for information that confirms our own prejudices or preferences
When we get stuck on a piece of information that has little to do with the quality of our buying decision and use it to make our decision.
I'm so sure I know that I won't check it out.
The person who receives the life insurance benefits if you die during the insured term.
The name for the amount of money actually paid out in life insurance, which may be less than the face value because of outstanding cash value loans.
The least expensive life insurance policy for younger people
A type of "whole life" insurance policy that lets you decide where you want to invest the cash value money.
Most life insurance policies require this exam before you are covered for proof of insurability.
Financial experts estimate that retirees need at least ____ percent of their preretirement income to live comfortably.
Women need to save more money for retirement than men because they
get less from Social Security.
get fewer retirement benefits from employer plans.
The main purpose of using a tax-sheltered retirement account to invest for retirement is to
let you accumulate more money for retirement.
An employer-sponsored retirement plan in which the employer or the employee puts money in a retirement account for the employee, and the amount of the retirement benefit depends on how well the investment yields, is called a
Many employers encourage their workers to participate in the company's retirement plan by offering a _________ equal to all or a portion of the amount the employee contributes into the plan.
People who start saving and investing for retirement during their twenties should aim to reserve ____ percent of their pretax income every year.
12 to 15
A positive aspect of defined-benefit plans is that
there is more certainty about the amount of the benefit than with defined-contribution plans.
If you borrow funds from your employer-sponsored retirement account you must
pay the money back within 30 days of changing employers.
In which of the following is the retirement plan contribution for the employee dependent on the financial success of the employer?
Retirement plans available to the self-employed include
all of these.
In insurance, risk is defined as the ____ a financial loss will occur.
uncertainty about whether
Fire, theft, illness, and accidents are all examples of
In managing property and liability risk, you should
keep good records that could serve to document insured property losses.
Homeowner's insurance includes
both property coverage and liability coverage.
After a Halloween night of madness on Sixth Street, Mark and two friends took Mark's four-wheel-driving Bronco for a midnight tour of campus. The next morning campus police found Mark and his Bronco in the middle of the campus fountain. Damage to the fountain is covered by Mark's ____ insurance, and damage to the Bronco is covered by ____ insurance.
property damage liability; collision
Life insurance needs are ____ until your first child is born, then the need is ____ until the youngest child is ten, and then the need ____ until retirement.
low; high; decreases
The largest final expense for most families would be
A term life insurance policy will pay out the ____ value if the insured dies during the term of the contract.
The best use of the money saved when you buy term versus cash-value life insurance is for
investing for the future; especially retirement.
Which of the following items is least appropriate to purchase with a credit card unless you will pay the bill in full when the statement is received.
The full additional cost of credit measured in dollars is called the
You are seriously overindebted if your debt payments-to-disposable income ratio is
People slip up in building and maintaining good credit when they
pay more than 14 percent of disposable income toward non-mortgage debt payments.
Interest rates that go up and down according to interest rates in the economy as a whole are referred to as
Most credit cards have a grace period only if
you paid the balance in full the previous month.
Federal law states that bills must be mailed to cardholders at least ____ days before payments are due.
Single-payment, open-ended, and service credit are lumped together under the category of
If you weigh one piece of information that confirms your suspicions as more important than information that does not confirm your suspicions, you are falling into the heuristic of:
Suppose you start out with a credit card at 18% APR. Later on in your life, you don't even think about changing your credit card because you're used to 18% interest and "that's as good as it gets". Your lack of curiosity about credit card APRs might be due to which bias?
Anna received a brochure in the mail about a work-at-home opportunity promising she could make up to $500 in six months. For $99, she could receive an exclusive mailing list and a set of brochures (oddly just like the one she received). She was told in instructions that if she got all the brochures addressed and mailed out, and sent confirmation to a PO Box, she would receive $50 plus reimbursement for stamps, another mailing list, and another pile of brochures. She sent her $100, mailed out her first set of brochures, sent confirmation to the PO Box, and waited. She never received her check for $50 and she was out $99. What kind of fraud is this most like?
Charging too much for a legitimate good or service is known as:
A deliberate misrepresentation of key facts in order to secure an unfair financial gain is called:
People often get defrauded by people who appear to be "like them" and thus trustworthy (for example, Bernie Maddoff targeted fellow Jews specifically. Which heuristic you've previously learned about does this sound most like:
When an elderly woman was asked why she had put $80,000 of her life savings into an investment boiler room fraud, she said, "The man on the phone sounded like such a nice young man, working his way through college. He couldn't possibly have stolen my money." Which heuristic does this sound the most like?
If you are suspicious about a "great opportunity", which is the best place to contact first(because they'll be able to help you the most)?
State Attorney General's Office
Which of the following is a ripoff rather than fraud
A spring break package where you're informed of all the terms of the package --- in fine print.
Which of the following is considered fraud?
Taking money for a service, but not performing the service.
Some people who have fallen for frauds have previously said, "I'll never fall for a fraud!" What would behavioral economics say about that?
It's overconfidence -- most people think they're smarter than they are.
In fraud, people often get involved because their neighbor gets involved, and he/she must know something I don't. What is this called?
____ publishes a list of recommended used cars in various price ranges each April.
The dealer cost of new cars averages about ____ percent lower than the sticker price.
The true cost of an automobile to the dealer is
invoice price less any dealer discounts..
Owing more on a vehicle loan than the vehicle is actually worth is called being
An automobile buyer can call the National Highway Traffic Safety Administration website www.safecar.gov to get information on government safety test results, recalls, and
____ has (have) historically been favored by Americans as the most preferable housing alternative.
____ are typically characteristic of older homes.
____ rarely appreciate(s) in value.
An increase in the value of a home is called
Homeowners today often spend up to ____ percent of disposable income on housing.
30 to 40
Of these four items, which is most aptly described as a need?
A consumer can save money by
paying cash for purchases.
avoiding buying on impulse.
stocking up on advertised specials.
all of these.
Buying without fully considering priorities and alternatives is called
Which is not a step in the planned buying process?
Purchasing on credit
Most people should not make buying decisions for expensive purchases
inside a retail store or in a showroom
The term used to describe righting a wrong is
The Fderal Trade Commission's "cooling off" rule allows you to
cancel a contract to purchase an item costing over $25 that is signed away from the dealer's normalplace of business within three days.
When you have a consumer complaint, it is important to deal with ____ before moving to other channels.
the actual seller
Dan Arielyand a colleague hired on as waiters in a pub in North Carolina. Half their customers were to tell them their beer order out loud; the other half received order forms to order their beer. What happened?
The customers who gave their beer order aloud ordered a wider range of beers.
Taxable income is determined by subtracting all but which of the following from gross income.
____ taxes are based on one's ability to pay.
Adjustments to gross income
are subtracted from gross income.
help one qualify for other deductions.
can be taken even if one takes the standard deduction.
all of these.
Qualifying contributions to personal retirement accounts are subtracted as
adjustments to income.
Total itemized deductions must be ____ to reduce your tax liability.
greater than your standard deduction
Iris Rosales is an unmarried college student age 21, and is claimed as a dependent on her married parents' tax return. What is the maximum number of personal exemptions Iris can legally claim on her own tax return?
The penalty for tax evasion can include
all of these.
A way to defer income taxes to later years is to
contribute to individual retirement accounts.
contribute to defined-contribution retirement plans.
all of these.
Which of the following demonstrates the "Lake Wobegon Effect"?
In a 1981 survey of Swedish drivers, 90% considered their driving above average.
The tendency to overestimate our abilities and underestimate the amount of time it takes for us to do something is called:
YOU MIGHT ALSO LIKE...
Series 7 Top-Off Exam Preparation | Knopman Marks Guide
Unit 05 - Credit, Debit and Consumer Skills
People, money, psych final
Personal Finance Test 2
OTHER SETS BY THIS CREATOR
OB Final EXAM Chapter 11
OB Chapter 7
OB Chapter 6
THIS SET IS OFTEN IN FOLDERS WITH...
Personal Finance 7.2
BUSA 1131- Exam 1
For AGI vs From AGI