Unit 0-1

Question 1

exchange value

Answer 1

how much $ something is worth, monetary (ex. diamond has more $ value than water bottle)

Question 2

use value

Answer 2

how useful something is, utility/usefulness, (ex. water bottle is more useful than diamond in the desert)

Question 3

opportunity cost

Answer 3

what you could’ve been doing or have instead, (ex. you could make $ now but you don’t & go to school instead to make even more money in the future)

Question 4

diminishing marginal utility

Answer 4

the more you have of something, the less useful it becomes to you (ex. 3 servings of food but by the 100th you become sick and don’t want another)

Question 5

4 things financial behavior is driven by

Answer 5

1. inner values
2. social values
3. physical values
4. financial values

Question 6

inner values

Answer 6

how we see ourselves and how others see us

Question 7

social values

Answer 7

desire to belong in a group

Question 8

physical values

Answer 8

desire to be healthy, tangible aspects of life, external world, physical health, general well-being

Question 9

financial values

Answer 9

what we think or believe about money

Question 10

endowment effect

Answer 10

assigning more value to things you own already rather tahn things you could own

Question 11

sunk cost fallacy

Answer 11

feeling like you need to get your “money’s worth”

Question 12

transaction utility

Answer 12

chasing a bargain “high”, feeling like you got a deal

Question 13

mental accounting

Answer 13

separating money into imaginary categories in your mind, different sources of income feel like different kinds of $ to spend on different things

Question 14

ways to put $ into your bank account

Answer 14

bring to bank
check deposit
ATM deposit
mobile deposit
direct deposit
mobile transfer

Question 15

ways to take $ out of your account

Answer 15

ATM withdrawal
debit/credit card purchases
online bill payments
mobile transfer
check payment
withdraw from teller @ bank

Question 16

checking account

Answer 16

doesn’t earn interest, meant for daily transactions

Question 17

avoidable banking fees

Answer 17

1. maintenance/service fee
2. out-of-network ATM fees
3. overdraft fee
4. insufficient funds fee (if you don’t opt for overdraft protection)
5. wire transfer fees
6. early account closing fee

Question 18

savings account

Answer 18

earns compound interest, not meant for regular transactions (fee if use too frequently)

Question 19

compound interest

Answer 19

investment plus interest on interest, more effective long-term

Question 20

compound interest equation

Answer 20

A=P(1+r/n)^nt

Question 21

rule of 72

Question 22

excessive transaction fee

Answer 22

charged when savings acct holders withdraw over the fed limit (6 withdrawals/transfers per month)

Question 23

budget savings system

Answer 23

50% needs, 30% wants, 20% savings

Question 24

habit cycle steps

Answer 24

cue, routine, reward, start with small tweaks rather than drastic changes

Question 25

3 challenges to savings

Answer 25

1. credit cards 2. inflation 3. living paycheck to paycheck

Question 26

advantages of personal internet banking

Answer 26

easier bill payments, ability to sync accounts with apps, 24/7 access, direct deposit, payment apps

Question 27

interpolation line of best fit

Answer 27

used to estimate a value between two known data values

Question 28

extrapolation line of best fit

Answer 28

used to estimate a value outside the range of known values

Question 29

correlation coefficient

Answer 29

number from -1 to 1 that tells you how closely the equation models the data. the closer r is to 1 or -1, the stronger fit the line is. the sign just tells you negative or positive correlation.

Question 30

freemium

Answer 30

service offered as free with additional service charges

Question 31

traditional/online savings account

Answer 31

low interest rates, can only withdraw a few times a month to avoid fee

Question 32

certificate of deposit

Answer 32

deposit a fixed amount of $ for a fixed amount of time, mid-ish interests

Question 33

money market account

Answer 33

interest-bearing account (middle ground btwn checking and savings account), can write checks/pay bills directly from account

Question 34

how to boost banking security

Answer 34

multi factor authentication automatic logging out after inactivity skip public wifi, cellular data on a VPN, check for web page encryption by looking for https ask for text alerts when large transactions occur/balance falls below a threshold

Question 35

direct deposit

Answer 35

automatic transfer, don't have to wait for funds to clear to use, commonly used for paychecks, tax refunds and benefits

Question 36

person to person payment apps fee characteristics

Answer 36

standard transfer=no fee instant transfer=usually a fee

Question 37

pros of cashless society

Answer 37

reduced crime rates, digital paper trail, less money laundering, less time/cost to handle $, easier currency exchange internationally

Question 38

cons of cashless society

Answer 38

personal info exposed to data breach, no alternative $ source in tech issues/hackers, tech learning curve, lack of control over spending, poor/unbanked will have harder time