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CS 338 > Test 2 Review > Flashcards

Test 2 Review Flashcards

0
Q

The ease with which an asset can be converted to cash.

A

Liquidity

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1
Q

How you manage your assets.

A

Monetary asset management

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2
Q

Companies that provide monetary asset management and other services.

A

Financial services industry

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3
Q

Organizations licensed to take deposits and make loans.

A

Depository institutions

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4
Q

What are the three ways to use monetary assets?

A

Interest earning checking accounts
Interest earning savings accounts
Money market accounts

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5
Q

Member owned, not for profit insured financial institutions that provide checking, savings, and loan services to members.

A

Credit unions

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6
Q

Insures deposits, both principal amounts and the accrued interest, up to 250,000 per account for most accounts

A

Federal deposit insurance

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7
Q

Investment companies that raise money by selling shares to the public and then invest that money in a diversified investment portfolio.

A

Mutual funds

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8
Q

Any account on which you can write checks that pays interest

A

Interest earning checking account

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9
Q

Common type of NOW account that pays lower interest on smaller deposits and higher interest on larger balances

A

Tiered interest

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10
Q

A checking account that requires customers to keep a certain minimum amount for a specified time period to avoid fees

A

Minimum balance account

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11
Q

Checking account for which service fees are assessed if the accounts average daily balance drops below a certain level for a specified period of time

A

Average balance account

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12
Q

Treating savings as the first expenditure after or even before getting paid rather than simply the money left over

A

Pay yourself first

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13
Q

The period for which deposits or withdrawals can be made without any penalty

A

Grace period

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14
Q

The return on total interest received on a 100 dollar deposits for one yr given the simple interest rate and the compounding frequency

A

Annual percentage yield (APY)

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15
Q

An interest earning account that pays relatively high interest rates and offers limited check writing privileges

A

Money market account

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16
Q

Government insured MMA with a minimum balance and tiered interest rates.

A

Money market deposit account (MMDA)

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17
Q

A money market account in a mutual fund rather than at a depository institution.

A

Monday market mutual fund

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18
Q

Multiple purpose coordinated package that gathers most monetary asset management vehicles into a unified account and reports activity on a single monthly statement to the client

A

Asset management account (AMA)

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19
Q

Monthly reports that show all electronic transfers to and from accounts fees charged and opening and closing balances.

A

Periodic statements

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20
Q

A Firm that will notify all companies with which you have debit and credit cards if your cards are lost or stolen

A

A card registration service

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21
Q

An arrangement in which goods, services or money is recieved in exchange for a promise to repay at a future date.

A

Credit

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22
Q

Consumer credit that is repaid in equal amounts over a set period of time.

A

Loan

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23
Q

Hotels or other service providers use a credit card number to secure reservations and charge the anticipated cost of services

A

Credit card blocking

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24
Q

The total amount paid to use credit

A

The finance charge

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25
Q

Expresses the cost of credit on a yearly basis as a percentage rate.

A

Annual percentage rate (APR)

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26
Q

Overall maximum you believe you should owe based on your ability to meet repayment obligations.

A

Debt limit

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27
Q

Percentage of disposable personal income available for regular debt repayments aside from set obligations

A

Debt payments to disposable income method

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28
Q

Amount of income remaining after taxes and withholding for such purposes as insurance and unions dues

A

Disposable income

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29
Q

Ratio of your consumer debt to your assets

A

Debt to equity ratio

30
Q

Information compiled by a credit bureau from merchants, utility companies, banks, court records, and creditors about your payment history

A

Credit report

31
Q

A firm that collects and keeps records of many borrowers credit histories

A

Credit burea

32
Q

Statistical measure used to rate applicants based on various factors deemed relevant to creditworthiness and the likelihood of repayment

A

Credit score

33
Q

Contract that stipulates repayment terms for credit cards

A

Credit agreement

34
Q

Contract that stipulates repayment terms for a loan

A

Promissory note

35
Q

Requires that credit reports contain accurate relevant and recent information and that only binaries users be permitted to review a file for approved purposes

A

Fair credit reporting act (FCRA)

36
Q

Your version of a credit issue that shows up on your credit report when the credit bureau refuses to drop a disputed claim

A

Consumer statement

37
Q

Seller related lender whose primary business is financing sales for its parent company

A

Sales finance company

38
Q

A firm that specializes in making relatively small secured or unsecured loans that require monthly installment payments.

A

Consumer finance company/small loan company

39
Q

When ones excessive personal debts make repayment difficult and cause financial distress

A

Overindebted

40
Q

Occurs when money raised by the sale of repossessed collateral doesn’t cover the amount owed on the debt plus any repossession expenses

A

Deficiency balance

41
Q

Prohibits third party debt collection agencies from using abusive deceptive or unfair practices to collect past due debts

A

Fair debt collection practices act

42
Q

A loan taken out to pay off several smaller debts

A

Debt consultation loan

43
Q

Firm that offers to help improve or fix a persons credit history for a fee

A

Credit repair company.

44
Q

Agency that can arrange payment schedules with unsecured creditors for overly indebted consumers and can provide individuals with credit counseling

A

Credit counseling agency

45
Q

A type of bankruptcy that is designed for individuals with regular incomes who might be able to pay off some or all of their debts given certain court protections

A

Chapter 13 bankruptcy

46
Q

A type of bankruptcy that provides for the liquidation of assets with proceeds applied to paying off excusable debts to the degree possible

A

Chapter 7 bankruptcy

47
Q

Credit arrangement in which the borrower must repay the amount owed plus interest in a specific number of equal payments

A

Installment credit

48
Q

An arrangement in which credit is extended in advance of any transaction so that borrowers do not need to reapply each time they need to use credit.

A

Open ended credit

49
Q

A payment that must be made to a credit account each month topcoat interest and a portion of the amount owed

A

Minimum payment

50
Q

An open ended credit account with a financial institution that allows the holder to make purchases almost anywhere

A

Bank credit card account

51
Q

A check equivalent way to take a cash advance on a credit card.

A

Cash advance checks

52
Q

Allow customers to make purchases on credit at any of the outlets of a particular retailer

A

Retail credit card

53
Q

Charges levied against cardholders for the privilege of having an open account but that are not included in the advertised APR

A

Annual fees

54
Q

A high APR that ins assessed whenever a borrower fails to uphold certain rules of the account such as making on time payments or staying within the credit limit

A

Default rate

55
Q

The time between the posting date of a transaction and the payment due date during which no interest accrues

A

Grace period

56
Q

The last day for which any transactions are reported on the credit statement

A

Billing, Closing or statement date

57
Q

Written evidence of any terms returned that notes the specific amount and date of the transaction.

A

Credit report

58
Q

An act that helps people who wish to dispute billing errors on revolving credit accounts

A

Fair Credit Billing Act

59
Q

The amount of the transaction is charged back to the business where the transaction originated in the case of a dispute or challenge by the cardholder

A

Chargeback

60
Q

Notices that make insistent demands for repayment

A

Dunning letters

61
Q

Written installment loan contract that spells out the terms of the loan

A

Promissory note

62
Q

A legal right to seize and dispose of property to obtain payment of a claim. Once the loan is paid the lien is removed

A

Lien

63
Q

Part of a credit contract stating that after a specific number of payments are unpaid the loan is considered in default and all remaining installments are due and payable upon demand of the creditor

A

Acceleration clause

64
Q

Requires lenders to disclose to credit applicants both the interest rate expressed as an APR and the finance charges

A

Truth in lending act

65
Q

Interest that is calculated by applying an interest rate to the amount borrowed times the number of years to arrive at the total interest to. E charged.

A

Add on interest

66
Q

What is the rule of 78 used for?

A

To determine the prepayment penalty when an add on loan is paid early

67
Q

A special charge assessed to the borrower for paying off a loan early

A

Prepayment penalty

68
Q

A common method of calculating the prepayment penalty on a loan that uses the add on method for calculating the interest.

A

Rule of 78

69
Q

Interest is calculated based on a discount rate multiplied by the amount borrowed and by the number of yrs to repay. Interest is then subtracted from the amount of the loan and the difference is given to the borrower in this method the interest is paid up front before amy part of the payment is applied to the principle

A

The discount method of calculating interest

70
Q

What are three reasons consumers use credit?

A

Convenience
Emergencies
Reservations

71
Q

What is the greatest disadvantage of using credit?

A

The loss of financial flexibility

72
Q

Three ways to protect your privacy

A

Review your credit report
Keep account information private
Never distribute your credit card or checking account number over the phone

73
Q

The three major credit unions

A

Experian
Transunion
Equifax

CS 338 (4 decks)

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