Chapter 13 Personal Finance Study Guide

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Exam 3 Study Guide Chapter 13 1. What is saving? 2. What savings amount do financial experts recommend for emergency purposes? 3-6 months 3. Historically, Americans have only saved what percentage of their incomes? 4. Name three reasons why people aren’t saving. 5. Name four reasons why people should save. Expenses, emergencies, future purchases, spending. 6. What are the four steps to developing a spending plan. Track spending for 1 mo evaluate and track and make adjustments. 7. What is “pay yourself first?” put your money away before you pay anything else. 8. What is the 70-20-10 rule?spend 70 save 20 invest 10 9. What is a depository institution? Funds will be insured to be there when you take a…show more content…
What is a checking account? A tool used to transfer funds deposited into the acct. to make a cash purchase. 29. What is the difference between a certified check and a cashier’s check? Personal check stamped to show the party who receives it knows there are funds available to deposit the check. Credit readily available and job stability. Chapter 15 30. What is a stock? ONLINEEEEEEEEE 31. What is a bond? 32. Why would a company issue stock? 33. Why is issuing stocks a popular way for companies to earn money? 34. What is the rule of thumb in regards to return and risk? 35. What is common stock? 36. What is a preferred stock? 37. What is a benefit/ advantage of preferred stocks? 38. What are some drawbacks of preferred stocks? 39. Who has the first rights to a company’s assets in the event that a company fails. 40. Name the seven stock classifications 41. What is a growth stock? 42. What is a Cyclical stock? 43. What are countercyclical stocks? 44. What are blue chip stocks? 45. What is book value? 46. How is book value calculated? 47. What are the three basic indicators of how well the stock market is doing? 48. What is the Dow

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