Details Title: FCE 238 Exam #1 Description: n/a Total Flash Cards: 43 Created: 09/29/2009 18:19:49		New Users: To study from this flashcard set, or to create your own your own study flash cards, REGISTER HERE. Existing Users: CLICK HERE. Additional Finance Flashcards
Cards in this set: Term fair market value Definition amount a willing buyer would pay to a willing seller for a charitable item; also, the price that a buyer would likely pay for a home based on comparisons with other home sales in the area Term fixed expenses Definition expenses that recur at fixed intervals Term variable expenses Definition expenses over which you have substantial control Term disposable (personal) income Definition Amount of income remaining after taxes and withholding Term discretionary income Definition money left over after necessities such as housing and food are paid for Term tangible (use) assets Definition personal property used to maintain your everyday lifestyle Term liquidity Definition speed and ease with which an asset can be converted into cash Term investment (capital) assets Definition tangible and intangible items acquired for their monetary benefits Term short-term (current) liability Definition Obligation paid off within one year Term long-term liability Definition debt that comes due in more than one year Term budget Definition paper or electronic document used to record both planned and actual income and expenditures over a period of time Term balance sheet (or net worth statement) Definition snap-shot of assets, liabilities, and net worth on a particular date Term expenses Definition total expenditures made in a specified time Term income Definition total payments received over a specified time period Term credit Definition a term used to describe an arrangement in which goods, services, or money is received in exchange for a promise to repay at a future date Term bankruptcy Definition constitutionally guaranteed right that permits people (and businesses) to ask a court to find them officially unable to meet their debts Term Annual Percentage Rate (APR) Definition The cost of credit on a yearly basis as a percentage rate Term Annual Percentage Yield (APY) Definition Return on total interest received on $100 deposit for 365-day period, given institution's simple annual interest rate and compounding frequency Term savings Definition income not spent on current consumption Term Examples of Fixed Expenses Definition Loan payments, Insurance premiums, Rent payments; it is difficult to reduce a fixed expense Term Examples of Variable Expenses Definition food, entertainment, clothing, household supplies Term Example of liquid assets Definition cash, checking account, savings account, tax refund due, money owed to you Term example of tangible assets Definition your home, appliances, furniture, auto, jewels, tools Term example of investment assets Definition Provides additional income • May increase in net worth over time • Includes tangible and intangible that is acquired for the monetary benefits they provide: • Generating additional income • Increasing in value • Generally appreciate Term Well stated goal Definition Amount? For what? By when? Term Consumer Expenditure Survey Definition • Income • Size and type of consumer unit • Number of earners • Age • Region • Occupation • Education Term Consumer Price Index Definition • Changes in prices of a market basket of goods and services •Adjusted every ~ 10 years Used in Adjusting: • Income payments • Social Security • Child support • Food stamps • School lunches • COLA Term secured loan Definition loan that is backed by collateral or a cosingning Term unsecured loan (signature loan) Definition loan granted based solely on borrower's good creditworthiness Term You usually pay your balance in full every month. Definition Look for a card with no annual fee. Interest rates are not a priority. Term You usually carry a balance. Definition You need the lowest possible interest rate. May be worth paying an annual fee. Make sure rate is not just an introductory rate. You pay in full and you have an excellent credit rating. Gold or Platinum card. Grab the freebies and try to find one with no annual fee. You charge a lot of business expenses and your employer reimburses you promptly. Consider a rebate card. You have damaged your credit but need a credit card for emergencies and car rental. Secured card Term You pay in full and you have an excellent credit rating. Definition Gold or Platinum card. Grab the freebies and try to find one with no annual fee. Term You charge a lot of business expenses and your employer reimburses you promptly. Definition Consider a rebate card. Term You have damaged your credit but need a credit card for emergencies and car rental. Definition Secured card Term FICO Score Definition • 35% Payment History • 30% Amounts owed • 15% Length of credit history • 10% Taking on more debt? • 10% Types of credit used Term Equal Credit Opportunity Act Definition Prohibits discrimination. Term Fair Credit Reporting Act Definition To insure: 1. confidentiality, 2. accuracy and 3. consumers right to know. Term Fair Credit Billing Act Definition To correct mistakes and errors. Term Fair Debt Collections Practices Definition Prohibits debt collectors from unfair or deceptive practices. Term Fair and Accurate Credit Transactions Act (2003) Definition • Requires Federal Trade Commission (FTC) to address identity theft concerns. • Defines identity theft as FRAUD. Term Credit summary Definition • Buy assets. • 2 - 3 cards MAX. • Pay on time. • Debt payments under 16% of monthly take home salary. • Good debt. Term Chapter 7 Bankruptcy Act - Immediate Liquidation Plan (straight bankruptcy) Definition Provides for the liquidation of assets with proceeds applied to paying off excusable debts to the degree possible Term Chapter 13 Bankruptcy Act (wage earner or regular income plan) Definition Designed for individuals who might be able to pay off some or all of their debts