first test

Question 1

inflation

Answer 1

the rise of prices or drop in dollar value

Question 2

debt

Answer 2

owe money to institutions or individuals

Question 3

escrow

Answer 3

a deposit on land or home to insure payment of loan

Question 4

finance charge

Answer 4

the penalty charged for being late or missing a payment

Question 5

credit

Answer 5

the ability to buy now or pay later

Question 6

premium

Answer 6

an amount to be paid for insurance typically

Question 7

mortgage

Answer 7

a regular payment of principal and interest on land or home

Question 8

FICO score

Answer 8

credit score according to the Fair Isaac Corporation

Question 9

bankruptcy

Answer 9

filing a chapter of complete debt with the government

Question 10

ability to pay

Answer 10

the amount creditors estimate one’s ability to pay reasonably

Question 11

regressive tax

Answer 11

the parentage of tax stays the same as ability to pay increases

Question 12

impulse buying

Answer 12

buying unneeded purchasing due to impulse

Question 13

wage inequality

Answer 13

when wages rise but low paying jobs still suffer

Question 14

budget

Answer 14

taking income and figuring out how much to spend on expenses

Question 15

interest

Answer 15

the dollar amount you are charged for borrowing money

Question 16

portfolio

Answer 16

variety of all investments held by account

Question 17

money market

Answer 17

higher interest-bearing saving account with limited check-writing or withdraws

Question 18

return

Answer 18

the benefit of an investment divided by its cost

Question 19

capital gain

Answer 19

profit from the sale of property or investment

Question 20

P/E ratio

Answer 20

method for valuing company that measures its current share price in relation to earnings

Question 21

compound interest

Answer 21

addition of interest by reinvesting interest

Question 22

prime rate

Answer 22

interest rate commercial banks charge

Question 23

rule of 72

Answer 23

72 divided by rate of return = number of years for initial investment to double

Question 24

deffered compensation

Answer 24

portion of income paid out later as part of pension or retirement plan

Question 25

mutual fund

Answer 25

diversified portfolio managed by professional brokers with specific investment objectives

Question 26

depreciation

Answer 26

the decrease in value of an asset

Question 27

assets

Answer 27

cash, accounts receivable, inventory

Question 28

risk

Answer 28

potential of gaining or losing value of investment

Question 29

liquidation

Answer 29

assets are sold to repay creditors or redirect investment spending

Question 30

merger

Answer 30

combining of 2 companies into one large company