Phase 2 Exam Review35 M/C, 35 T/F Questions

Chapters 6 - 12

Personal Financial PlanningFIN 235

Chapter 6Building and Maintaining Good Credit

• Types of Credit– Closed-end– Open-end– Reasons for using credit– Credit score and interest rates– Role of credit bureaus

• Advantages vs. Disadvantages– #1 advantage – life style– #1 disadvantage – easy to overspend– Protecting your credit

Chapter 7

• Warranties– Full– Expressed– Limited– Implied

• Buying Wisely– Information – Compare – Select/Buy – Post-Purchase

• Inducements to Buy– Rebates, Discounts, add-ons

Chapter 7Credit Cards & Consumer Loans

• Importance of APR• Credit Limits• Types of Credit– Revolving / Open-ended– Home equity

• Penalties for Late Payments• Cash Advances from credit cards

Chapter 8Vehicle Purchases

• Wants vs. Needs in Selection process• MSRP vs. Negotiated Sale Price• Impact of down payment– Relation to being upside-down in loan/lease

• Importance of:– Pre-shopping– Decision Making– Negotiating Price– Vehicle history when buying a used vehicle

Chapter 9Obtaining Affordable Housing

• Renting (Lease Agreements)– Terms and Conditions (contractual obligations)– Subletting

• Mortgage Financing– Qualifications, Points– Types of Mortgages• Second Mortgages and Home Equity Loans

– Importance of down payments, PMI requirement– Short-sales, Flipping

Chapter 10: Managing Risk

• Relationship between risk, uncertainty and financial Loss

• Rationales for buying insurance• Risk Reduction vs. Risk Avoidance• Steps in risk management process• Hazards, Perils, & Exposure

Chapter 11: Health Insurance

• Objectives of Health Care [policies]• Types of Plans:– Comprehensive– Blue Cross / Blue Shield– Medicare– Medicaid– Health savings Accounts

• Disability Benefits eligibility• Parental Coverage of children under PPAHCA.

Chapter 12: Life Insurance

• Rationales for Life Insurance• Survivor Social Security Benefits• Difference between Term and Whole Life

insurance policies– Motives for selecting term over whole life

• Primary v-v Contingent beneficiaries