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Personal Finance Standards Database

Council for Economic Education
Council for Economic Education

12th Grade

State Standards
I. Earning Income
12-1Compensation for a job or career can be in the form of wages, salaries, commissions, tips, or bonuses, and may also include contributions to employee benefits, such as health insurance, retirement savings plans, and education reimbursement programs.
12-1aResearch potential income and employee benefit packages that are likely to be offered to new employees by various companies, government agencies, or not-for-profit organizations.
12-1bExplain why people should evaluate employee benefits in addition to wages and salaries when choosing between job and career opportunities.
12-1cDifferentiate between contributory and non-contributory employee benefits.
12-1dExamine the benefits of participating in employer-sponsored retirement savings plans and healthcare savings plans.
12-2In addition to wages and paid benefits, employees may also value intangible (non-cash) benefits, such as good working conditions, flexible work hours, telecommuting privileges, and career advancement potential.
12-2aGive examples of intangible job benefits.
12-2bDescribe how intangible benefits can affect a worker's career choices and income.
12-2cEvaluate the tradeoffs between income and non-income factors when making career or job choices.
12-3People vary in their opportunity and willingness to incur the present costs of additional training and education in exchange for future benefits, such as earning potential.
12-3aEvaluate the costs and benefits of investing in additional education or training.
12-3bExplain how differences in people's life circumstances can affect their opportunity and willingness to further their education or training.
12-3cCompare earnings and unemployment rates by level of education and training.
12-4Employers generally pay higher wages or salaries to more educated, skilled, and productive workers than to less educated, skilled, and productive workers.
12-4aIdentify different types of jobs and careers where wages and salaries depend on a worker's productivity and skills.
12-4bExplain why wages or salaries vary among employees in different types of jobs and among workers in the same jobs.
12-4cDiscuss possible explanations for the persistence of race and gender pay gaps.
12-5Changes in economic conditions, technology, or the labor market can cause changes in income, career opportunities, or employment status.
12-5aDiscuss how economic and labor market conditions can affect income, career opportunities, and employment status.
12-5bEvaluate the impact of technological advances on employment and income.
12-5cDiscuss the effects of an economic downturn on employment opportunities for people with different characteristics, such as education, experience, employment type, ethnicity, and gender.
12-6Federal, state, and local taxes fund government-provided goods, services, and transfer payments to individuals.
12-6aCalculate the amount of taxes a person is likely to pay when given information or data about the person's sources of income and amount of spending.
12-6bIdentify which level(s) of government typically receive(s) the tax revenue for income taxes, payroll taxes, property taxes, and sales taxes.
12-6cDescribe the benefits they receive, or may receive in the future, from government-collected tax revenue.
12-7The major types of taxes are income taxes, payroll taxes, property taxes, and sales taxes.
12-7aInvestigate the federal and state tax rates applicable to different sources of income.
12-7bCompare sales tax rates paid on different types of goods in their state and for online purchases.
12-7cDifferentiate between gross, net, and taxable income.
12-7dExplain why some income is reported on an IRS Form W-2 and some is reported on an IRS Form 1099, and how that could affect their taxes.
12-8The type and amount of taxes people pay depend on their sources of income, amount of income, and amount and type of spending.
12-8aExplain the difference between earned and unearned income.
12-8bCompare the tax rates assessed on earned income, interest income, and capital gains income.
12-9Interest, dividends, and capital appreciation (gains) are examples of unearned income derived from financial investments. Capital gains are subject to different tax rates than earned income.
12-9aComplete IRS Form W-4.
12-9bExplain the difference between a tax credit and a tax deduction.
12-9cIdentify several examples of tax credits, determining whether they are refundable or non-refundable, and the groups of people who benefit most from each type.
12-10Tax deductions and credits reduce income tax liability.
12-10aIdentify different potential sources of retirement income.
12-10bDescribe the importance of having multiple sources of income in retirement, such as Social Security, employer-sponsored retirement plans, and personal investments.
12-10cExplain the importance of participating in employer-sponsored retirement plans, when available, and contributing enough to qualify for the maximum employer match.
12-10dReport the average benefit paid to a retiree living on Social Security today.
12-11Retirement income typically comes from some combination of continued employment earnings, Social Security, employer-sponsored retirement plans, and personal investments.
12-11aEvaluate the benefits and costs of gig employment, such as driving for a cab or delivery service.
12-11bDiscuss the pros and cons of small business ownership as their primary source of income.
II. Spending
12-1A budget helps people achieve their financial goals by allocating income to necessary and desired spending, saving, and philanthropy.
12-1aIdentify their short-term and long-term financial goals.
12-1bDevelop a budget to allocate current income to necessary and desired spending, including estimates for both fixed and variable expenses.
12-1cExplain methods for adjusting a budget for unexpected expenses or emergencies.
12-1dEvaluate the advantages of using budgeting tools, such as spreadsheets or apps.
12-2Consumer decisions are influenced by the price of products or services, the price of alternatives, the consumer's budget and preferences, and potential impact on the environment, society, and economy.
12-2aSelect a product or service and describe the various factors that may influence a consumer's purchase decision.
12-2bDescribe a process for making an informed consumer decision.
12-2cList the positive and negative effects of a recent consumer decision on the environment, society, and the economy.
12-3When purchasing a good that is expected to be used for a long time, consumers consider the product's durability, maintenance costs, and various product features.
12-3aExplain the factors to evaluate when buying a durable good.
12-3bAnalyze the cost and features of three competing products or services.
12-3cCompare product choices based on their impacts on the environment or society.
12-4Consumers may be influenced by how prices of goods and services are advertised, and whether prices are fixed or negotiable.
12-4aList different ways retailers advertise the prices of their products.
12-4bDescribe how inflation affects purchase decisions and the price of goods and services.
12-4cSummarize how negotiation affects consumer decisions and the price of goods and services.
12-5Consumers incur costs and realize benefits when searching for information related to the purchase of goods and services.
12-5aExplain how pre-purchase research encourages consumers to avoid impulse buying.
12-5bBrainstorm consumer research strategies and resources to use when making purchase decisions.
12-5cAnalyze social media marketing and advertising techniques designed to encourage spending.
12-6Housing decisions depend on individual preferences, circumstances, and costs, and can impact personal satisfaction and financial well-being.
12-6aIdentify financial and personal reasons that younger adults often choose to rent a home instead of buying.
12-6bCompare the short-term and long-term costs and benefits of renting versus buying a home in their city of residence.
12-6cDefine key rental contract terminology, including lease term, security deposit, grace period, and eviction.
12-7People donate money, items, or time to charitable and non-profit organizations because they value the services provided by the organization and/or gain satisfaction from giving.
12-7aDiscuss the motivations for and benefits of donating money, items, or time.
12-7bDevelop a list of charitable organizations and provide a possible reason that a donor might want to give money to each organization.
12-7cIdentify specific steps one should take when researching charitable and other not-for-profit organizations.
12-8Federal and state laws, regulations, and consumer protection agencies (e.g., Federal Trade Commission, Consumer Affairs office, and Consumer Financial Protection Bureau) can help individuals avoid unsafe products, unfair practices, and marketplace fraud.
12-8aDescribe the roles and responsibilities of government agencies that help protect consumers from fraud.
12-8bIdentify state and federal consumer protection laws based on the issues they address and the safeguards they provide.
12-8cInvestigate common types of consumer fraud and unfair or deceptive business practices, including online scams, phone solicitations, and redlining.
12-8dMake recommendations for sources of help for consumers who have experienced fraud.
12-9Having an organized system for keeping track of spending, saving, and investing makes it easier to make financial decisions.
12-9aExplain how having a system for financial record-keeping can make it easier to make financial decisions.
12-9bDevelop a system for keeping track of spending, saving, and investing.
12-9cResearch financial technology options for financial record-keeping.
III. Saving
12-1Financial institutions offer several types of savings accounts, including regular savings, money market accounts, and certificates of deposit (CDs), that differ in minimum deposits, rates, and deposit insurance coverage.
12-1aCompare the features of regular savings accounts, money market accounts, and CDs.
12-1bExplain why CDs typically pay higher interest rates than regular savings accounts or interest-bearing checking accounts.
12-2Deposit account interest rates and fees vary between financial institutions and depend on market conditions and competition.
12-2aSelect a preferred location for a savings account based on comparison of interest rates and fees at different types of financial institutions.
12-2bExplain why an increase in the number of people who want to borrow money might result in banks paying higher rates on deposits.
12-2cDiscuss types of market conditions that could result in financial institutions paying lower rates on savings accounts.
12-3Unless offered by insured financial institutions, mobile payment accounts and cryptocurrency accounts are not federally insured and usually do not pay interest to depositors.
12-3aResearch mobile payment account alternatives.
12-3bCompare and contrast the features of mobile payment accounts, cryptocurrency accounts, and checking/savings accounts.
12-3cExplain why storing money in a mobile payment account can reduce the ability to grow savings.
12-4Inflation can erode the value of savings if the interest rate earned on a savings account is less than the inflation rate.
12-4aExplain why savers typically earn a higher nominal rate of interest when inflation is high.
12-4bIllustrate how inflation can reduce the purchasing power of savings over time if the nominal interest rate is lower than the inflation rate.
12-4cInvestigate how federal I bonds provide inflation protection for savers.
12-5Government agencies such as the Federal Reserve, the FDIC, and the NCUA, along with their counterparts in state government, supervise and regulate financial institutions to improve financial solvency, legal compliance, and consumer protection.
12-5aInvestigate the areas of financial institution operations that are subject to state and/or federal regulation and supervision.
12-5bIdentify the state agency responsible for regulating financial institutions where they live.
12-5cExplain the importance of solvency regulation for financial institutions.
12-6Tax policies that allow people to save pretax earnings or to reduce or defer taxes on interest earned provide incentives for people to save.
12-6aExplain how traditional IRAs (individual retirement accounts), Roth IRAs, and education savings accounts provide incentives for people to save.
12-6bCompare the tax advantages of traditional and Roth IRAs.
12-6cCompare the tax advantages of different types of education savings accounts.
12-7Employer defined contribution retirement plans and health savings accounts can provide incentives for employees to save.
12-7aExplain how an employer match of employee contributions to its retirement plan provides an incentive for employees to save.
12-7bCompare the impact of employee "opt in" versus "opt out" of employer retirement plans and explain why it makes a difference.
12-7cDescribe the pros and cons of saving through an employer retirement plan as compared to saving outside of an employer plan.
12-7dExplain the benefits of saving money in a health savings account for individuals with high-deductible health plans.
12-8People can reduce the potential for future financial strife with a partner or spouse by sharing personal financial information, goals, and values prior to combining finances.
12-8aAssess the value of sharing financial goals and personal financial information with a partner before combining finances.
12-8bDiscuss how personal financial decisions can affect other people.
12-9There are many strategies that can help people manage psychological, emotional, and external obstacles to saving, including automated savings plans, employer matches, and avoiding personal triggers.
12-9aExplain how external influences (e.g. peers, family, or social media) can impact personal savings decisions.
12-9bIdentify strategies to manage psychological and emotional obstacles to saving.
12-9cDiscuss strategies for avoiding personal triggers that result in deviating from a savings plan.
12-9dExplain how the saving strategy "pay yourself first" can help people achieve their saving goals.
IV. Investing
12-1A person's investment risk tolerance depends on factors such as personality, financial resources, investment experiences, and life circumstances.
12-1aGive examples of factors that can influence a person's risk tolerance.
12-1bDiscuss how a person's risk tolerance influences their investment decisions.
12-1cAssess their personal risk tolerance using an online tool or worksheet.
12-2Investors earn investment returns from price changes and annual cash flows (such as interest, dividends or rent). The nominal annual rate of return is the annual total dollar benefit as a percentage of the beginning price.
12-2aDescribe the different types of annual cash flows that can be received by investors.
12-2bCompare nominal annual rates of return over time on different types of investments, including cash flows and price changes.
12-2cExplain why assets that do not produce income or are exposed to large price fluctuation (such as collectibles, precious metals, and cryptocurrencies) are described as speculative investments.
12-3Investors expect to earn higher rates of return when they invest in riskier assets.
12-3aDiscuss the advantages and disadvantages of investing in riskier assets.
12-3bInvestigate the long-run average rates of returns on small-company stocks, large-company stocks, corporate bonds, and Treasury bonds.
12-3cExplain why the expected rate of return on a value stock or mutual fund is likely to be lower than that of a growth stock or mutual fund.
12-3dExplain why bonds with longer maturities generally earn a higher return than shorter-term bonds.
12-4Because inflation reduces purchasing power over time, the real return on a financial asset is lower than its nominal return.
12-4aDescribe the impact of inflation on prices over time.
12-4bExplain the relationship between nominal and real returns.
12-4cFind the current rate paid on CDs at a bank and calculate the expected real rate after inflation.
12-5The prices of financial assets change in response to market conditions, interest rates, company performance, new information, and investor demand.
12-5aDescribe factors that influence the prices of financial assets.
12-5bPredict what could happen to the price of a stock if new information is reported about the company or its products.
12-5cDiscuss how economic downturns that result in high unemployment can affect the prices of financial assets.
12-5dExplain why the market price of some assets, such as bonds and real estate, increase when interest rates decrease.
12-6When making diversification and asset allocation decisions, investors consider their risk tolerance, goals, and investing time horizon.
12-6aRecommend portfolio allocation between major asset classes for a short-term goal versus a long-term goal.
12-6bDiscuss the pros and cons of investing in a diversified mutual fund versus investing in a small number of individual stocks.
12-6cSuggest an appropriate asset allocation for a very risk averse person versus a very risk tolerant person.
12-6dExplain how target date retirement funds reallocate investments over time to meet their investment objective.
12-7Expenses of buying, selling, and holding financial assets decrease the rate of return from an investment.
12-7aDiscuss how the expenses associated with buying and selling investments can impact rates of return and investment outcomes.
12-7bCompare the expense ratios for several mutual funds.
12-7cExplain why an actively managed mutual fund usually has a higher expense ratio than an index fund.
12-8Tax rules affect the rate of return on different investments, and can vary by holding period, type of income, and type of account.
12-8aCompare tax rates paid on interest income versus short-term and long-term capital gains.
12-8bDescribe the advantages of investing through a tax-deferred account such as an IRA or 401(k) versus a taxable account.
12-8cInvestigate the contribution limits and tax advantages of a traditional IRA versus a Roth IRA.
12-9Common behavioral biases can result in investors making decisions that adversely affect their investment outcomes.
12-9aIdentify several behavioral biases that can result in poor investment decisions (e.g. loss aversion, investing in employer stock, home bias, mental accounting).
12-9bBrainstorm methods for avoiding negative consequences from behavioral biases.
12-10Financial technology can counterbalance negative behavioral factors when making investment decisions.
12-10aExplore common financial technologies used for investing, including automated trading platforms.
12-10bExplain how automating investment activities can help people avoid making emotional investment decisions.
12-11Many investors buy and sell financial assets through discount brokerage firms that provide inexpensive investment services and advice using financial technology.
12-11aDiscuss how the development of financial technology has made it easier for people of all income and education levels to participate in financial markets.
12-11bChoose a discount broker and research the minimum starting account balance, minimum monthly investment, and trading costs.
12-11cIdentify the advantages and disadvantages of robo-advising and other investment-related financial technologies.
12-12Federal regulation of financial markets is designed to ensure that investors have access to accurate information about potential investments and are protected from fraud.
12-12aExplain the role of federal regulators in financial markets.
12-12bDiscuss why insider trading is illegal and harmful to investment markets.
12-12cExplain the importance of having access to full and accurate information about potential investments.
12-13Investors often compare the performance of their investments against a benchmark, such as a diversified stock or bond index.
12-13aExplain why investors often compare portfolio performance to a benchmark such as the S&P 500 Index.
12-13bResearch the composition of the most popular benchmark indices and compare their recent performance.
12-13cDiscuss the advantages of investing in an exchange-traded fund (ETF) that tracks a market index rather than investing in actively managed mutual funds or individual stocks and bonds.
12-14Criteria for selecting financial professionals for investment advice include licensing, certifications, education, experience, and cost.
12-14aDiscuss reasons that a person might want to hire a financial professional to manage their investments or provide investment advice.
12-14bExplain the importance of licensing, certifications, education, and experience as criteria for selecting a financial professional for investment management or advice.
12-14cInvestigate where and how to find qualified financial professionals.
V. Managing Credit
12-1Borrowers can compare the cost of credit using the Annual Percentage Rate (APR) and other terms in the loan or credit card contract.
12-1aDescribe how credit card grace periods, methods of interest calculation, and fees affect borrowing costs.
12-1bCompare the cost of borrowing $1,000 using consumer credit options that differ in rates and fees.
12-2Loans that are secured by collateral have lower interest rates than unsecured loans because they are less risky to lenders.
12-2aGive examples of unsecured and secured loans.
12-2bExplain why lenders charge lower interest rates on secured loans than on unsecured loans.
12-2cCompare what happens if a borrower fails to make required payments on a secured loan, such as an auto loan or a home mortgage, versus failing to pay a credit card account.
12-3Monthly mortgage payments vary depending on the amount borrowed, the repayment period, and the interest rate, which can be fixed or adjustable.
12-3aIdentify the type of collateral required for a mortgage loan.
12-3bDifferentiate between adjustable-rate and fixed-rate mortgages.
12-3cCompare monthly mortgage payments for loans that differ in repayment period, amount borrowed, and interest rate.
12-4Post-secondary education is often financed by students and families/caregivers through a combination of scholarships, grants, student loans, work-study, and savings.
12-4aDescribe the different sources of funding for post-secondary education.
12-4bExplain the role the FAFSA plays in applying for college financial aid.
12-4cIdentify scholarships and grants for which they are eligible.
12-4dEstimate the reduction in total cost of education and potential student loan debt if they complete their first two years of college at a community college before transferring to a four-year institution.
12-5Federal student loans have lower rates and more favorable repayment terms than private student loans, and may be subsidized.
12-5aCompare federal and private student loans based on interest rates, repayment rules, and other characteristics.
12-5bDescribe the process of applying for a student loan.
12-5cEstimate total interest on various student loans based on interest rates and repayment plans.
12-5dPredict the potential consequences of deferred payment of student loans.
12-6Down payments reduce the amount needed to borrow.
12-6aIdentify examples of loans that may require down payments.
12-6bGiven the price of a home, estimate the amount of down payment required.
12-6cFor a specified loan amount, compare the monthly loan payment with a 10% down payment versus a 20% down payment.
12-6dExplain how a down payment makes a borrower more attractive to a lender and motivates loan repayment by the borrower.
12-7Lenders assess creditworthiness of potential borrowers by consulting credit reports compiled by credit bureaus.
12-7aIdentify the primary organizations that maintain and provide consumer credit reports.
12-7bAssess the value to a potential lender of the information contained in a credit report.
12-7cExplain how a person can get a free copy of their credit report and why this is advisable.
12-7dOutline the process of disputing inaccurate credit report information.
12-8A credit score is a numeric rating that assesses a person's credit risk based on information in their credit report.
12-8aIdentify the main factors that are included in credit score calculations.
12-8bExplain how a borrower's credit score can impact their cost of credit and their ability to get credit.
12-8cRecommend ways that a person can increase their credit score.
12-9Credit reports and credit scores may be requested and used by entities other than lenders.
12-9aExplain how landlords, potential employers, and insurance companies use credit reports and credit scores in decision-making.
12-9bProvide examples of benefits associated with having a good credit score.
12-9cCompare the effect of soft versus hard credit inquiries on a person's credit score.
12-10Borrowers who face negative consequences because they are unable to repay their debts may be able to seek debt management assistance.
12-10aDescribe how failing to repay a loan can negatively impact a person's finances and life.
12-10bIdentify sources of assistance with debt management.
12-10cCreate a plan for a person who is having difficulty repaying debt.
12-10dCompare the costs and benefits associated with for-profit versus non-profit credit counseling services.
12-11In extreme cases, bankruptcy may be an option for people who are unable to repay their debts.
12-11aDescribe the purpose of bankruptcy laws.
12-11bInvestigate the effects of bankruptcy on assets, employment, and future access to credit.
12-11cCompare the results of liquidation versus reorganization bankruptcy.
12-12Consumer credit protection laws govern disclosure of credit terms, discrimination in borrowing, and debt collection practices.
12-12aExplain the rationale behind laws that require people to have access to full information about credit cards and loans before they borrow money.
12-12bDiscuss the importance of protecting borrowers from discrimination and abusive marketing or collection practices.
12-12cResearch where to find credible sources of up-to-date information on credit rights and responsibilities.
12-13Alternative financial services, such as payday loans, check-cashing services, pawnshops, and instant tax refunds, provide easy access to credit, often at relatively high cost.
12-13aIdentify products and practices that are classified as alternative financial services.
12-13bDiscuss the costs and benefits of using alternative financial services relative to traditional banking.
12-13cExplain how using payday loans can cause a cycle of debt.
VI. Managing Risk
12-1People vary with respect to their willingness to accept risk and in how much they are willing to pay for insurance that will allow them to minimize future financial loss.
12-1aDiscuss whether a premium paid to insure against a crash that never happens is wasted.
12-1bAnalyze the conditions under which it is appropriate for young adults to have life, health, and disability insurance.
12-2The decision to buy insurance depends on perceived risk exposure, the price of insurance coverage, and individual characteristics such as risk attitudes, age, occupation, lifestyle, and financial profile.
12-2aIdentify individual characteristics that influence insurance purchase decisions.
12-2bRecommend types of insurance needed by people with different characteristics.
12-3Some types of insurance coverage are mandatory.
12-3aExplain why homeowners' insurance is required by a lender when a homeowner takes out a mortgage.
12-3bDiscuss why most states mandate auto liability coverage.
12-3cResearch the minimum auto liability insurance required in the state they live in and whether it is sufficient to cover typical auto accident financial losses.
12-4Insurance premiums are lower for people who take actions to reduce the likelihood and/or financial cost of losses and for those who buy policies with larger deductibles or copayments.
12-4aResearch factors that result in lower auto insurance premiums.
12-4bExplain why taking a safe driving course can lower a driver's auto insurance premium.
12-4cDiscuss the pros and cons of buying an auto insurance policy with a higher deductible.
12-5Health insurance provides coverage for medically necessary health care and may also cover some preventive care. It is sometimes offered as an employee benefit with the employer paying some or all of the premium cost.
12-5aDiscuss the advantages of obtaining health insurance coverage through an employer plan versus buying private insurance or being uninsured.
12-5bCompare the cost of health insurance to the potential financial consequences of not having health insurance.
12-5cEstimate the effect on different health insurance deductibles and coinsurance rates on out-of-pocket medical costs.
12-6Disability insurance replaces income lost when a person is unable to earn their regular income due to injury or illness. In addition to privately purchased policies, some government programs provide disability protection.
12-6aCompare disability coverage offered by individual policies, employee benefit plans, Social Security, workers' compensation, and temporary disability programs (in some states).
12-6bAssess the extent of financial risk and need for disability insurance using hypothetical disability scenarios.
12-7Auto, homeowner's and renter's insurance reimburse policyholders for financial losses to their covered property and the costs of legal liability for their damages to other people or property.
12-7aExplain the primary types of losses covered by auto, homeowner's, and renter's insurance policies.
12-7bDescribe situations where someone may be liable for injuries or damages to another person or their property.
12-7cIdentify factors that influence the cost of renter's insurance and homeowners' insurance.
12-8Life insurance provides funds for beneficiaries in the event of an insured person's death. Policy proceeds are intended to replace the insured's lost wages and/or to fund their dependents' future financial needs.
12-8aExplain how a person's death can result in financial losses to others.
12-8bDiscuss the benefits and costs of purchasing life insurance on the primary earners in a household.
12-9Unemployment insurance, Medicaid, and Medicare are public insurance programs that protect individuals from economic hardship caused by certain risks.
12-9aDiscuss how state unemployment programs can help reduce economic hardship caused by job losses during a recession or pandemic.
12-9bCompare the Medicare and Medicaid programs based on who they cover and how they are funded.
12-10Insurance fraud is a crime that encompasses illegal actions by the buyer (e.g., falsified claims) or seller (e.g., representing non-existent companies) of an insurance contract.
12-10aProvide examples of insurance fraud.
12-10bInvestigate the legal consequence for individuals who are convicted of insurance fraud.
12-11Online transactions and failure to safeguard personal documents can make consumers vulnerable to privacy infringement, identity theft, and fraud.
12-11aProvide examples of how online behavior, e-mail and text-message scams, telemarketers, and other methods make consumers vulnerable to privacy infringement, identity theft, and fraud.
12-11bDescribe conditions under which individuals should and should not disclose their Social Security numbers, account numbers, or other sensitive information.
12-11cRecommend strategies to reduce the risk of identity theft and financial fraud.
12-11dExplain the steps an identity theft victim should take to limit losses and restore personal security.
12-12Extended warranties and service contracts are like an insurance policy.
12-12aEvaluate the costs and benefits of buying an extended warranty on a specific item (e.g. cellphone, laptop, or vehicle) considering the likelihood of product failure, cost of replacing the item, and price of the warranty.
12-12bExplain how extended warranties or service contracts are similar to and different from insurance.