Personal Finance
Unit C Review
5.01
1. The 8 basic rights of consumers are:
a.
b.
c.
d.
e.
f.
g.
h.
The Right to be ________ (safe)
The Right to be ___________ (informed)
The Right to ____________ (choose) products and services
The Right to be ______ (heard)
The Right to ________ (redress)
The Right to __________ ______________ (Consumer Education)
The Right to __________ (Service)
The Right to a ____________ __________ (Healthy Environment)
2. The 8 basic Responsibilities of Consumers are:
a.
b.
c.
d.
e.
f.
g.
h.
To _______ ______ ______ (use products safely)
To _______ _____ ______ ___________ (find and use information)
To ___________ ____________ ___________ (Choose purchases carefully)
To ______ __ (Speak up)
To ____ ________ (Seek redress)
To _____ (learn)
To _______ _____ ______ (reward good service)
To promote a healthy, caring _____________ ____ ____ ____________ (relationship
with the environment)
3. What are the 4 sources of consumer protection?
a. (Federal government agencies)
b. (State government agencies)
c. (Merchant Services)
d. (Consumer Advocacy Groups)
4. What are the components of a successful written complaint?
a. (Greeting/Salutation)
b. (Opening)
c. (Body)
d. (Closure)
5. What are the components of a successful verbal complaint?
a. Act Quickly
b. Address the right source
c. Be specific and factual
d. Be reasonable
e. Suggest a solution
6. Match the vocabulary term with the definition:
_____ a. Consumable Product
1. A physical object that is purchased
_____ b. Durable Product
2. One who sells goods and services
directly to consumers
_____ c. Good
_____ d. Marketplace
_____ e. Merchandise
3. A product or physical item
purchased
4. An action that is performed for
someone’s benefit
_____ f. Retailer
5. A product that last for a long time
_____ g. Service
_____ h. Warranty
6. A guarantee that a product is in good
working order and will give good
service for a reasonable amount of
time
7. A product that typically provides a
single use
8. All retailers’ goods and services
available to the general public
Key: A7, B5, C1, D8, E3, F2, G4, H6
Section 5.02
1. What information is required on food labels?
a. Common ______ of the food (name)
b. Net _____ or ______ (weight / volume)
c. ______ and ______ of the manufacturer, packer or distributor (name/address)
d. List of __________ (ingredients)
e. Nutrition facts panel containing:
i. _________ ______ is both household and metric measures (serving size)
ii. __________ per container (servings)
iii. __________ per serving and _______ from _____ (Calories, calories, fat)
f. Voluntary information that may be found:
i. _____________ directions and recipe ideas (cooking)
ii. _______ name (Brand)
iii. ________ information (price)
iv. ______ dating (open)
2. What information is required by the FTC to be permanently stamped/sewn in apparel?
a. ___________ or ______ or ______ name identification (manufacturer / seller /
brand)
b. _______ name and ________ by weight (fiber / content)
c. Country of _________ if not made in USA (origin)
d. _______ information (care)
3. Match the following laws governing clothing and textile apparel products with their
requirements.
____ 1. Wool products labeling Act
a. Products with wool must be labeled
with percent and type of fiber
____ 2. Textiles Fiber Products Act
b. Label with generic name, fiber content,
____ 3.. Permanent Care Labeling
and percent of each fiber by weight,
Rule
country or origin
____ 4. Flammable Fabrics Act
c. Label the best way to clean the product
d. Sets flammability standards for
children’s sleepwear
1A, 2B, 3C, 4D
4. What consumer information must be placed on personal hygiene products according to
the FDA?
a. ________ and _________ of the product (name/ description)
b. ______ listed from largest to smallest (ingredients)
c. Ingredients of products classified as drugs into to categories: _____ and ____
ingredients (Active / other)
d. _________ by count, measure or weight (quantity)
e. ________ of origin if imported (country)
f. _____ and __________ of the firm marketing the product (name / address)
g. _________ of the manufacturer if different from the distribution (name)
h. _______/____ use instructions (warning / safe)
i. _________-________ packaging (tamper-resistant)
5. Who regulates medicinal drugs? (The Food and Drug Administration)
6. What are the types of drugs as defined by the FDA? (Prescription and Over-the-counter
drugs)
7. Match the open-dating description with the definition:
_____ 1. Sell by, or pull, date
_____ 2. Freshness date
_____ 3. Expiration date
_____ 4. Pack date
a. Date a food product was
processed or packaged
b. Last date a product should be
sold
c. Last date a product should be
used
d. Last date you can expect highest
Key: 1B, 2D, 3C, 4A
quality of a food product
8. Match the cosmetic information with the general description.
____ 1. Dermatologist-tested
____ 2. Hypoallergenic
____ 3. Natural
____ 4. Noncomedogenic
____ 5. Vitamin-enriched
____ 6. Fragrance-Free
a. Implies that the product is less likely
to cause an allergic reaction
b. The product claims not to clog the
pores
c. The product contains none or small
amounts of fragrance ingredients
d. Implies that the product came from a
plant or animal source
e. Vitamins have been added to the
product
f. Manufacturer does not have to
provide information about test
Key: 1F, 2A, 3D, 4B, 5E, 6C
9. Prescription drugs are available only by ________ ______ from a doctor. (Written order)
10. Prescription drugs are more ___________ than over-the-counter drugs. (effective)
11. FDA requires prescription drugs to contain:
a.
b.
c.
d.
e.
f.
g.
__________ name, address and phone number (pharmacist’s)
prescription _______ (number)
date of __________ (prescription)
names of _______ and ________ (doctor/patient)
___________ for use (directions)
_____________ date (expiration)
Whether _____________ (renewable)
12. Over-the-counter drugs are available ______ a written order from a doctor. (without)
13. Over-the-counter drugs are considered _____ if taken according to directions. (safe)
14. The FDA requires labels on over-the-counter drugs to contain:
a.
b.
c.
d.
e.
f.
_______ and _____ of manufacturer, packer or distributor (name/address)
________ of contents (quantity)
________ of medication (purpose)
_________ for use/storage (directions)
__________ dosages (recommended)
_________ of ______ medication may be taken (Length/time)
g. ________ for times to avoid use (cautions)
h. Possible _____ ________ and _________ with other medicines (side
effects/interactions)
i. __________ ingredients and quantity per does (active)
j. ______ ingredients (other)
k. _______-forming properties (habit)
l. _________ date (expiration)
15. Indicate whether each example listed is a national brand, a store brand, or a generic
brand.
National
X
Tylenol
No-Name Ibuprofen
Sam’s Choice Cola
Pepsi
Levi’s
Great Value Chips
No-Ad Sunblock
Store
Generic
X
X
X
X
X
X
16. What does UPC stand for and what does it do? (Universal Product Code – a scanning
code used to help with inventory control and pricing.)
17. Determine the unit price of the following products:
Item
3.1 oz. Box of Sour Patch Kids
60 oz. Pine Sol
Hefty Soak Proof Bowls, 50 Ct.
Gerber Good Start Baby Formula 24 oz.
TRESemme Shampoo 32 oz.
Suave Professional Shampoo 32 oz.
Total Cost for Item
$1.00
$3.47
$6.92
$14.98
$3.87
$2.87
Unit Price
$.032
$0.057 or $0.06
$0.1384 or $0.14
$0.624 or $0.62
$0.1209 or $0.12
$0.0896 or $0.89
Unit 6.01
1. Match the following store options with the definitions.
____ 1. Consignment Shops
____ 2. Department Stores
____ 3. Discount Stores
____ 4. Factory Outlet Stores
____ 5. Retail Stores
____ 6. Specialty Stores
____ 7. Warehouse Clubs
a. Stores that sell merchandise at
greatly reduced prices.
b. Stores that sell a wide variety of
goods and services from a single
store.
c. Stores that obtain goods from
wholesale sources and sell directly to
consumers.
d. Stores that offer price advantages
and wide product selections.
e. Stores that sell specialized
goods/services.
f. Stores that sell certain lines of
merchandise at lower prices.
g. Stores that are owned by the
manufacturer or distributor of the
merchandise.
Key 1A, 2B, 3F, 4G, 5C, 6E, 7D
2. What are options for shopping at home? (Door-to-door, catalog shopping, telemarketing,
T-commerce and E-Commerce)
3. List and describe the 4 different types of warranties. (Implied: product is in proper
condition and does what is intended; written: goes beyond implied & provide written
guarantee; Full – must provide all 5 standards stated in Magnusson-Moss act; Limited –
does not meet one/more of the Magnuson-Moss standards)
6.02
1. What are options for meeting transportation needs? Public transit, taxi,
walking/bicycling, motorcycle and carpooling.
2. Explain what depreciation is and how it affects your decision to buy a vehicle.
Depreciation is when the value of an item decreases after you buy it – new vehicles
depreciate more quickly than used.
3. Explain the difference between base price, invoice price, manufacturer’s suggested retail
price and sticker price. Base Price – price of vehicle with basic standard equipment,
invoice price – the price the dealer paid the manufacturer for the vehicle, MSRP = base
price + options + mftr transportation charge; Sticker Price – dealer’s initial asking price
(sticker on the window).
4. What are some advantages to leasing a vehicle versus owning a vehicle?
5. What are some advantages to buying a used vehicle versus a new? What about
advantages of buying a new versus used?
6. Match the insurance term with the definition:
___ 1. Collision Insurance
___ 2. Comprehensive Physical Damage
___ 3.Insurance
___ 4. Deductible
___ 5. Liability Insurance
___ 6. No-Fault Auto Insurance
___ 7. Premium
___ 8. Rental Reimbursement
___ 9. Underinsured Motorist Insurance
a. Covers when liable or responsible
for an accident where others are
injured or killed
b. Pays for loss or damages to insured’s
car due to accident
c. Pays for loss or damage not resulting
from a collision
d. Pays claims regardless of who is at
fault
e. Covers difference between liability
coverage and underinsured motorist
and the amount of losses
f. Covers the cost of renting a car while
yours is being repaired
g. The cost for insurance coverage for
the term of the insurance policy
h. The amount an insured person must
pay before the insurance company
pays on a claim
KEY: 1B, 2C, 3-, 4H, 5A, 6D, 7G, 8F, 9E
6.03
1. Housing wants and needs can be affected by :
a. The _______ of persons in a family (number)
b. The _____ of the individual/family life cycle (stage)
c. How individuals/family prefer to spend their ____ (time)
d. What one can _____ (afford)
e. Preferred housing _________ (Location)
2. Match the type of housing with the description:
___ 1. Apartments
___ 2. Condominium
___ 3. Cooperative
___ 4. Single Family Home
___ 5. Mobile Home
___ 6. Duplex
___ 7. Townhome
___ 8. Residence Hall
a. Usually located on college/university
campuses
b. Single-wide or double-wide movable
homes
c. A building that houses more than one
family; person owns the unit
d. Building that houses more than one
family in separate living units
e. A person buys a share in a
corporation that owns/manages the
property
f. A building that contains two separate
living units
g. A dwelling of two or three stories
that attaches at sidewalls to other
units
h. Custom-built, development, modular
or kit houses/townhouses
Key: 1D, 2C, 3E, 4H, 5B, 6F, 7G, 8A
3. What are the advantages of renting/leasing a living space?
Fewer financial responsibilities, more free time, greater mobility
4. What are the advantages of owning a living space?
Investment, authority to make changes, tax benefits
5. What are the costs involved in buying a home? Down payment, closing costs, monthly
loan payments, continuing costs, escrow account
6. Match the types of mortgages and special loans with the definitions:
___ 1. Adjustable Rate Mortgage
___ 2. Conventional Fixed Rate Mortgage
___ 3. FHA Loans
___ 4. VA Loans
a. Insure loans to people who have
served in the military, no down
payment required
b. Interest rate changes to reflect
changes in economy
c. Interest rate and monthly payment
amount remains the same for the life
of the loan
d. Insure loans to low and moderateincome families who might
otherwise not qualify for a mortgage
Key: 1B, 2C, 3D, 4A
7. Answer the following questions and calculate the following costs for a home that is
advertised at $130,000.
a. The Washington Family will be purchasing this home with a 20% down Payment.
What is the amount of the down payment? ______________ ($26,000)
b. How much will the Washington Family need to borrow to pay for this house?
__________________ ($104,000)
c. What is the principal? ___________ ($104,000)
d. The Washington Family has shopped around for loans and found two banks that
are willing to lend them the money they need to purchase the home. The first
bank wants $300 in fees and will charge them 5% interest on the loan. The
second bank was $500 in fees and will charge them 4% interest on the loan. What
advice would you give to the Washington Family on which loan to take? (I would
tell them to pay the higher fee and go with the 4% interest because the interest is
over the life of the loan and it will cost them more to pay 5% on $104,000 over
the life of that loan than it would to pay the extra $200 in fees and pay 4% on
$104,000.
8. What is a contingency? A condition that must be met in order for a house sale to occur.
9. Why do some people/banks require earnest money? Because they want to be sure the
buyer is serious about buying the home.
10. What is the purpose of an Open House? To promote interest in an home that is for sale
11. What is an escrow account? An account held in trust to pay taxes and insurance when
due
7.01
1. What is the purpose of insurance? To protect someone from financial loss.
2. Match the types of health coverage with the description.
___ 1. Accident Insurance
___ 2. CHIP
___ 3. COBRA
___ 4. Dental Insurance
___ 5. Disability Insurance
___ 6. Long-Term Care Insurance
___ 7. Major Medical
___ 8. Medicaid
___ 9. Medical Benefits
___ 10. Medicare
___ 11. Medigap Insurance
___ 12. Vision Benefits
a. Pays a large part of hospital and surgical
care.
b. Pays for long-term illness expense after
basic medical benefits limits have been
reached
c. Covers all or part of routine dental
services
d. May cover all or part of eye
examinations, glasses and contact lenses
e. Supplies all/part of a worker’s pay if
unable to work due to illness or injury
f. Intended to cover the costs of extended
home nursing care and related expenses
which are not covered by regular
medical benefits
g. Covers costs from injuries that occur at
an eligible location and/or time
h. Private insurance available to citizens 65
or older who have Medicare A and B
plans
i. The federal government program for
payment of some of the medical
expenses of the elderly ages 65 and older
and some disabled persons
j. State and federal governments share the
cost to pay certain medical bills for lowincome persons
k. Health insurance for children under 18
whose parents earn to much to qualify
for Medicaid but not enough to buy
private insurance.
l. The Consolidated Omnibus
Reconciliation Act that gives one the
right to pay one’s own premiums and
continue employer-sponsored group
health insurance plan for a limited time
after leaving a job.
m. A Health Care group that provides health
care services to members for a set fee
and small co-pay
KEY: 1G, 2K, 3L, 4C, 5E, 6B, 7F, 8J, 9A, 10I, 11H, 12D, (13M)
3. What is the difference between a PPO, an HMO and a POS? HMO – Members provided
services for a small fee and co-pay; PPO –Members are provided services at a reduced
rate negotiated by employees and health care providers; POS – members use primary
physician who refers them as needed.
4. What is the benefit of an Health Savings Account? The money is taken out before taxes
so you pay taxes on less income and can still use the H.S.A. account for medical
expenses later.
5. What is the difference between a co-pay and a deductible? Co-payments are payments
made at the time of services which have been set by your health-care provider in
agreement with the doctor (i.e., $10 for a doctor visit – all remaining billing is handled by
Insurance company). Deductibles are the money that you pay directly out of your pocket
for medical expenses.
6. What is an open enrollment period? The time during which a person will need to make a
decision about healthcare for the year.
7. Preauthorization – some elective or expensive tests require approval before the insurance
company will cover the costs – or a preauthorization.
8. Exclusions – Things insurance will not cover
9. Match the types of Term Life Insurance with their definitions:
___ 1. Convertible Term
___ 2. Decreasing Tem
___ 3. Level Term
___ 4. Permanent Life Insurance
___ 5. Renewable Term
a. Premiums and death benefits stay the
same for the life of the policy
b. Premiums stay the same but benefits
decrease over the life of the policy
c. The insured person can renew the policy
without taking a physical
d. The insured person can change the
policy from convertible to permanent
without taking a physical.
e. Provides coverage for a person’s entire
life and includes an investment
component.
KEY: 1D, 2B, 3A, 4E, 5C
10. Explain the 3 types of Whole Life Insurance. Limited Payment Life – coverage for entire
life but premiums are higher because pd. For a set # of years or until a set age; Universal
Life – allows adjustments of premium, face value & level of protection; Variable Life –
premiums are fixed but face amt. varies with results.
11. What are the main differences between Term Life and Whole Life insurance? Term Life
is temporary and less expensive but it does not cover for entire lifetime. Whole life is
more expensive, permanent and usually includes a savings component.
12. What is a beneficiary? Someone who benefits from a life insurance policy
13. What is face value? The amount of money paid to a beneficiary upon termination of the
policy (death)
14. What is maturity date? The date that a life insurance policy will reach its full value
Unit 7.02
1. Who are the two parties in a credit transaction? The lender and the borrower
2. What is sales credit? Credit from a retailer or lending institution that allows you to
purchase goods or services from retailers.
3. What is cash credit? Most likely a loan – money granted for a variety of purposes.
4. What is the difference between a secured and an unsecured loan? Secured loans require
some form of collateral while unsecured loans are given based on good credit.
5. What is the difference between an installment loan and a single-payment loan? An
installment loan is one in which a regular payment is made over a period of time, a single
payment loan is a one-time payment in a lump sum.
6. What are the 3 Cs of Credit? Character, Capacity and Capital
7. Which law protects consumer access to credit? Equal Credit Opportunity Act
8. Which law requires lenders to disclose the terms of credit and loan agreements? Truth in
Lending Act
9. Which law guarantees consumers the right to access their credit file and dispute incorrect
information? The Fair Credit Reporting Act
10. Which law outlines steps for settling credit card billing disputes? The Fair Credit Billing
Act
11. Which law protects consumers against unfair methods of collecting debts? Fair Debt
Collection Practices Act
12. Which law requires lenders to disclose information to aid consumers in managing their
credit accounts? The Credit Card Act of 2009
13. Which law helps protects consumers rights during electronic funds transactions? The
Electronic Funds Transfer Act
14. Complete the matching activity on credit terms below:
__ 1. APR
__ 2. Asset
__ 3. Bankruptcy
__ 4. Balloon payment
__ 5. Collateral
__ 6. Collection agency
__ 7. Cosigner
__ 8. Credit counseling
__ 9. Finance Charge
__ 8. Grace Period
__ 9. Garnishment
__ 10. Interest
__ 11. Loan Shark
__ 12. Open-end credit
__ 13. Repossession
A. The annual rate of interest that is
charged for using credit
B. An item of value you own, including
money
C. Legal relief from paying certain
debts
D. A final loan payment that is much
larger than the other installments
E. Property that is pledged to guarantee
payment of a loan
F. A business that collects unpaid debt
for other companies or organizations
G. A responsible person who signs a
loan as a co-borrower and thereby
agrees to pay the obligation if the
primary borrower fails to do so
H. Guidance provided by trained people
who help consumers learn to live
within their means
I. What the consumer pays for the use
of credit
J. Period of time during which a
balance on a credit card may be paid
in full to avoid finance charges
K. The legal withholding of a sum from
a person’s wages in order to collect a
debt
L. A fee paid for the opportunity to use
someone else’s money over a period
of time
M. Unlicensed lender who operated
illegally and charges excessive
interest
N. Credit that can be used repeatedly
O. Taking away property due to failure
to make loan or credit payments
KEY: 1A, 2B, 3C, 4D, 5E, 6F, 7G, 8H, 9I, 10J, 11K, 12L, 13M, 14N, 15O
Unit 7.03
1. Identity theft is a form of ______. (Fraud)
2. List at least 3 ways to protect yourself from identity theft.
3. What is the limit of liability for most credit cards? $50.00
4. _______ are small files stored on a computer that enable web sites to remember
information about a visitor. (Cookies)
7.04
1. Match the forms of advertising listed below with the examples:
___ 1. Billboards and signs
___ 2. Commercials
___ 3. Direct Mail
___ 4. Infomercials
___ 5. Pop-up ads
___ 6. Print Ads
a. Newspapers, Magazines, Telephone
Directories
b. Catalogues, Flyers, Newsletters
c. Radio, Television, Movies
d. 30-minute ads with demonstrations
e. Web pages, emails
f. Located along the highway, in subways,
on buses and trucks
KEY: 1F, 2C, 3B, 4D, 5E, 6A
2. Give an example of each of the following types of advertising techniques
Beauty appeal
Escape
Lifestyle
Bandwagon
Rebel
Unfinished Comparisons
Trendsetter
Hidden Fears
Puffery
3. Explain the following deceptive advertising techniques:
Loss Leader:
Bait and Switch:
Introductory Offer:
Deceptive Pricing:
Hidden Catches:
8.01
1. What is the PRIMARY purpose for saving? Setting aside present income for future use.
2. What is the PRIMARY purpose for investing? Putting money to work so that it earns
interest over time
3. What is liquidity? How easily money can be turned into cash.
4. What is risk? The chance of loss
5. What is volatility? How the value of an investment changes suddenly and significantly
6. Compute the following items using the 70-20-10 rule:
a.
b.
c.
d.
If you had $1000, how much money would you need to save? ($200)
If you had $10,000, how much money would you need to invest? ($1,000)
If you had $5,000, how much money would you spend? ($3,500)
If you had $10,000, how much money would you need to save? ($2,000)
7. Which is the most liquid: Savings, Money Market, CD or Savings Bonds? (Savings)
8. Which of these has the highest rate of return: Savings, Money Market, CD or Savings
Bonds? (Savings Bonds)
9. Which of these costs less than $1 per share? Common stock, Preferred stock, Blue Chip
stock, Growth stock, and Penny Stock. (Penny Stock)
10. Which of these comes from growing companies? Common Stock, Preferred Stock, Blue
Chip Stock, Growth Stock, and Penny Stock (Growth Stock)
11. Which of these comes from large companies? Common Stock, Preferred Stock, Blue
Chip Stock, Growth Stock and Penny Stock (Blue Chip Stock)
8.02
1. How do you determine net worth? By subtracting liabilities from assets.
2. What does a balance sheet include? Income and Expenses
3. What should be included in a spending plan? An itemized list of your expenses and
income.
4. If you have extra money after subtracting expenses from income, you have a _____
_____. Net Gain
5. If you do not have any extra money after subtracting expenses from income, you have a
____ _____. Net Loss
8.03
1. What does the SMART in SMART Goals stand for?
A.
B.
C.
D.
E.
S___________ (Specific)
M ____________ (Measurable)
A____________ (Attainable)
R___________ (Realistic)
T______ _________ (Time Bound)
2. What is the difference between an anticipated expense and an actual expense?
Anticipated expenses are what you think you will spend on something, but actual
expenses are what you actually spent on something.
3. What is the difference between a fixed and flexible expense? A fixed expense is one that
doesn’t change and is regular (paid each month) while a flexible expense is one that
changes or may be a non-regular payment.