Personal Finance 3.04-3.07 Study Guide Review Question Preview (ID: 47310)


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It is recommended that one's educational loan payments require no more than 10–15% of one's estimated starting income. What should a student consider in order to calculate this amount?
a) Opportunity cost
b) Career pathway
c) Benefit
d) Debt-to-income ratio

Mallory has set a career goal of becoming a veterinarian but does not have the money to complete this goal without taking out very large student loans. She decides to attend a 2‐year program to become a veterinary technician, and then work for 3 year
a) career pathway
b) opportunity cost
c) debt‐to‐income ratidebt‐to‐income ratioo
d) SMART goal

As Jonah plans for his future, his family has challenged him to create a SMART goal for his career education and training. Which question is the least important one to consider at this point?
a) What kind of training and education do I need and how much will it cost?
b) Is there a career pathway available if I continue my education and training?
c) Can I get the education and training I need near where I currently live?
d) Will a job be available and will I earn enough in my career to pay for the education and training it requires?

The money one would have earned if she/he had worked instead of continuing her/his education is called the:
a) debt-to-income ratio
b) opportunity cost.
c) benefit
d) total estimated cost

Jaimen is struggling to make his student loan payments after college. He is considering defaulting on the student loan. Which is not a potential consequence if he decides to default on the student loan?
a) He could be denied credit cards, car or home loans, or apartment leases
b) The bank could refuse to allow him to open a checking account
c) He may not be able to obtain a marriage license
d) His wages may be garnished

Direct Subsidized Stafford Loans offer some features that are different when compared to borrowing money from a bank to pay for college. Which is not a difference between a Direct Subsidized Stafford Loan and a typical bank loan?
a) Interest rates for Stafford loans tend to be higher because the loans are held for a relatively long period of time
b) Stafford loans have deferment options
c) Stafford loans typically have a grace period
d) Student families must complete a FAFSA (Free Application For Federal Student Aid) in order to apply for a Stafford loan.

Carson’s family has always struggled financially due to his parents leaving high school before graduating and working lower paying jobs to support the family. His parents do not want him to make the same mistake and are encouraging him to apply for s
a) Perkins Federal Loan Application
b) Direct Subsidized Stafford Loan Application
c) Federal Work Study Application
d) Free Application for Federal Student Aid (FAFSA)

Sean plans to attend college in 2 years. He and his family have saved some money to help pay for it but he wants to explore ways he can receive money he won’t have to repay. Which set of options should he explore?
a) Federal Perkins Loans, PLUS loans, and local bank loans
b) Federal Student Grants, PLUS loans, and scholarships
c) Pell Grants, work-study, and scholarships
d) Work-study, scholarships and PLUS loans

Susan is currently working in Kansas City, MO earning $30,000 per year. She is offered a position in Indianapolis, IN earning $32,000 per year. If Kansas City’s Cost of Living Index is 100 and Indianapolis’ Cost of Living Index is 125, which is true?
a) Susan will have more spending power if she moves to Indianapolis
b) Susan will have more spending power if she stays in Kansas City
c) Susan will have the same spending power in Indianapolis as she has in Kansas City
d) There is not enough information to decide

To be considered for lifelong employment a person must continually maintain their employability. Which of these actions will not help maintain employability?
a) Maintain high standards in honesty, reliability, and punctuality
b) Adjust your actions to be appropriate for different situations you find yourself in,
c) Continue to learn by taking classes and striving for continual improvement on the job.
d) Seek ways to blend your personal and professional images online to enable current and future employers to see that you have a

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