D363 - Personal Finance

Question 21: What are "Social Security credits"?

Tax credits given for early retirement

The number of quarterly credits earned through employment and paying FICA taxes

Refunds for overpayment of Social Security taxes

Benefits earned from volunteer work

Question 22: What does "fully insured Social Security status" mean?

A person has earned 40 credits and is entitled to full Social Security benefits

A person is covered for medical expenses by Social Security

A person receives 100% of their pre-retirement income from Social Security

A person qualifies for early retirement without penalty

Question 23: Which of the following is a key component of "disability benefits" from Social Security?

Benefits are only available after retirement

Benefits are paid for total disabilities where the individual is unable to work at any job

Benefits are tax-free and available to all workers

Benefits must be repaid upon recovery

Question 24: What does "basic retirement benefit" refer to in Social Security?

The amount of money saved in a retirement account

The minimum guaranteed benefit under an employers retirement plan

The monthly benefit a worker would receive at their full-benefit retirement age

The lump sum payment received upon reaching retirement age

Question 25: What is the "full-benefit retirement age" for individuals born in 1960 or later?

60

62

65

67

Question 26: What is the primary goal of a "retirement savings goal"?

To accumulate enough savings to support a desired lifestyle in retirement

To ensure all debts are paid before retirement

To guarantee a fixed income after retirement

To receive tax-free withdrawals in retirement

Question 27: What is the "replacement ratio" in retirement planning?

The ratio of pre-retirement income replaced by Social Security benefits

The percentage of pre-retirement income needed to maintain your lifestyle in retirement

The ratio of retirement savings to current income

The percentage of income replaced by an annuity

Question 28: What is a "consolidation loan"?

A loan used to merge multiple debts into one with lower interest rates and payments

A loan designed to consolidate all of your assets into one investment

A loan provided by the government for first-time homebuyers

A loan for retirement savings only

Question 29: What is a "credit bureau"?

A financial institution that provides credit cards

A firm that collects and maintains records of individuals credit histories

A bank that monitors credit card usage

A service that provides credit reports for a fee

Question 30: What is a "credit agreement"?

A contract outlining the terms of repayment for a loan or credit card

A verbal agreement between the lender and borrower

A guarantee that credit will be extended indefinitely

A contract that waives all fees and interest for a borrower

Question 31: What does "preapproved" mean in the context of a credit offer?

The individual is guaranteed to receive the credit without further review

The credit offer is conditional based on a preliminary review of the individuals credit

The credit card company has waived all interest rates for the borrower

The individual must apply and wait for a decision

Question 32: What is the "credit utilization ratio"?

The ratio of secured to unsecured credit

The amount of credit used compared to the total available credit

The percentage of credit card bills paid off in full

The ratio of income to credit card debt

Question 33: What is the purpose of the "Fair Credit Reporting Act" (FCRA)?

To ensure that consumers credit reports contain accurate and relevant information

To limit the interest rates charged by credit card companies

To allow consumers to borrow money at lower interest rates

To protect consumers from bankruptcy

Question 34: What is "negative option" in business practices?

The option for consumers to decline a service only after it has been provided

The practice of offering free services with no future obligation

The option to pay a penalty for unused services

The choice to opt into additional services for a fee

Question 35: What is "overindebtedness"?

Having more credit than necessary

Experiencing financial strain due to excessive personal debts

Paying off credit cards every month

Accumulating assets beyond your means

Question 36: What is "collateral" in the context of a loan?

A guarantee provided by the lender to the borrower

An asset pledged by the borrower to secure a loan

A bonus given to borrowers who repay loans early

A contract that waives interest on the loan

Question 37: What is a "billing cycle"?

The time period between when payments are due

The time period between credit card statements, typically one month

The number of times a bill must be paid within a year

The period during which no interest is charged on a credit card

Question 38: What is a "statement date" in credit cards?

The date when the billing cycle ends and a new statement is generated

The date by which a payment must be made

The last day to dispute charges

The date when a credit card is renewed

Question 39: What is an "average daily balance" on a credit card?

The total amount spent on a card in one month

The sum of the balances each day of the billing period divided by the number of days in the period

The amount of credit card debt that remains unpaid

The total interest accrued over a billing period

Question 40: What is a "penalty rate" (default rate) on a credit card?

The interest rate charged for exceeding the credit limit

A very high interest rate applied when a borrower violates the terms of the card

The standard interest rate applied to all balances

A reduced rate for paying off balances early

D363 Personal Finance - Set 3 - Part 2