Exam 18: Appendix: Personal Finance

Owing to his impulsive buying habits, Ronnie's unpaid credit card balances pile up to $9,000. As Ronnie does not have enough money to clear his bills, he is in a deep financial crisis. In this scenario, the first step that Ronnie should take is to:

Karen is the sole breadwinner of her family. Every month, Karen has to pay electricity bills, water bills, and house rent. In this scenario, Karen's fixed monthly expenses are referred to as _____.

Gladia is fond of shopping. However, most of the time she does not have cash at her disposal. Gladia hence purchases items by using a card issued by her bank that allows her to pay later. In the given scenario, Gladia is using a _____.

Internships usually offer no monetary compensation, but they pay off in other ways.

Delores had invested in an individual retirement account (IRA) over the 25 years of her service and then invested the money from the IRA in government securities. The contributions that Delores had made to the account were not tax deductible at the time they were made, but she did not have to pay taxes on the distribution she received from the IRA on retirement. In this scenario, Delores had invested in a _____.

Norman, a musician, needs to buy sound equipment for his stage shows, but he does not have the required funds for it. He, therefore, purchases the equipment using a card issued by his bank that lets him clear the balance later. Although Norman does not need to pay the due amount immediately, he can only make purchases using the card for a limited amount of money. In this scenario, Norman's purchases are limited because he has a low _____.

Which of the following statements is true of the Dodd-Frank Act?

Discount brokers offer a wide range of additional services to their clients free of cost.

The benefit of a(n) _____ is that the contributions you make reduce your taxable income in the same tax year and the earnings on your contributions are tax deferred, allowing them to grow more rapidly.

The Federal Deposit Insurance Corporation (FDIC) insures individual deposits up to $250,000 per account in FDIC-insured banks.

Frank bought furniture worth $5,230 for his new house and used his credit card to make the payment. However, because of financial constraints, he was unable to clear the outstanding amount within the bank's stipulated time. This resulted in the bank charging Frank an additional $25. This additional amount that Frank needs to pay to the bank is referred to as the _____.

Roderick has made an investment in a credit union for a fixed term of four years. He receives a high interest rate on it. However, because of unexpected financial difficulties, Roderick is forced to cash in before the investment reaches its maturity and ends up incurring a heavy penalty. In the context of financial securities, Roderick has most likely invested in: