Personal Finance
According to the image below from the USDA's ChooseMyPlate initiative, which answer ranks dietary components in the order of what should be the biggest part of your diet to what should be the smallest part of your diet. a. Dairy, Fruit, Proteins/Meat,Grains, Vegetables b. Dairy, Vegetables, Grains, Fruit, Protein/Meat c. Vegetables, Grains, Protein/Meat, Fruit, Dairy d. Vegetables, Dairy, Grains, Protein/Meat, Fruit
C
Automated teller machine: a. functions like a check b. Used when you want to transfer a check made out to you to another person. This instructs the bank to pay the check to the new payee. c. a computer terminal that allows a withdrawal of cash from an account d. the percentage of increase in the value of your savings from earned interest
C
Savings accounts at banks are protected by: a. Mutual fund returns b. Risk and return curves c. FDIC insurance d. An annual percentage rate
C
What is the official retirement age, according to the US government? a. 70 b. 59 c. 67
C
When figuring out the total amount of debt you are responsible for, you should include: a. Car loans, home loans, and school loans b. Car loans and home loans c. Car loans, home loans, school loans, and any credit card debt d. Any debt that must be repaid within 3 years
C
Which is NOT a step in researching your purchase? a. Comparing prices b. Looking at customer reviews c. Getting your friends' approval d. Trying on appare
C
When you borrowed $50 from your rich cousin, and then had to pay her back $60, what is the original $50 called? a. Bribery b. Interest c. Credit d. Principal
D
Your automobile insurance includes premiums of $510 for liability, $220 for collision, and $130 for comprehensive. What is your total premium? a. $1,240 b. $510 c. $640 d. $860
D
A loan with a large down payment: a. annual percentage rate b. debt collector c. collateral d. grace period e. up-front cash
E
The income a person receives: a. creditor b. credit rating c. bankruptcy d. open-end credit e. net income
E
A borrower is a credit cardholder who does not pay off his or her balance in full each month. a. True b. False
A
A mortgage is an example of a closed-end credit. a. True b. False
A
A secured loan is one guaranteed to be repaid through safe collateral. a. True b. False
A
Calculate your GROSS PAY given the following scenario: You worked 35 hours this week Your hourly pay is $11 per hour a. 385 b. 395 c. 285 d. 351
A
It is best to eat several small meals each day (with healthy snacks as needed) rather than one big meal. A. True B. False
A
Match the payroll tax with the correct tax rate: Social Security Tax a. 6.2 b. 1.45
A
Which of the "five C's of credit" require that a person's assets exceed his or her liabilities? a. capital b. character c. collateral d. capacity
A
A business that gives you a loan is: a. A credit counseling agency b. A creditor c. A debt collection agency d. A credit bureau
B
A loan from a family member is an example of an expensive loan. a. True b. False
B
All investments eventually increase in value if held long enough. a. True b. False
B
Direct Deposit: a. allows purchaser to obtain cash and make purchases in another country b. an automatic deposit of net pay to an employee's designated bank account c. check written by a financial institution, payee is guaranteed funds, purchaser pays check amount plus a fee (money comes out of their account) d. the ability to easily convert financial assets into cash without loss in value
B
How can you tell the value of a purchase? a. Asking a friend b. Thinking of how it will affect your life c. Looking at the price tag d. Figuring out how much it cost to manufacture
B
Inflation increases the buying power of money. a. True b. False
B
Which one of the following is not part of your automobile operating costs? a. parking b. transaction fees c. insurance d. gas
B
You put $500 in an interest bearing bank account that pays 2% per year but has a fee of $2 per month. Are you getting ahead? a. Yes b. No c. Can't tell
B
A bear market: a. Can be an opportunity for long term investors to buy stocks of well run companies at lower prices b. Is when bond prices and interest rates are not as attractive as the growth in the stock market c. Is when people rush to buy stocks, sending prices surging upward d. Happens every year at about the same time, and can be avoided with proper attention to the calendar
A
A savings account: a. Should have your correct Social Security Number attached so that it helps your credit history b. Can be used to write checks and is a credit account c. Is no use in developing a credit history d. Can only be opened once you are 18 years old
A
A substantial one of these will keep you from going upside down on your loan, that is, owing more on your car than it is worth: a. down payment b. insurance c. interest d. finance charges
A
According to the pie chart below, how much of our taxes go to pay Social Security and Medicare? a. 33% b. 13% c. 21% d. 100%
A
An entity (bank, finance company, credit union, business, or individual) to which money is owed: a. creditor b. credit rating c. bankruptcy d. open-end credit e. net income
A
An installment loan is: a. A loan paid off in a certain amount of time, in installments, or equal payments b. Always a positive item on a credit report, even if it was not paid off c. A credit card paid off right away d. When an item is paid for before it is picked up
A
Career path: a. A planned progression of jobs within one or more professions throughout one's working life. b. A regular activity performed in exchange for payment. c. A fixed compensation paid regularly for services. d. What is lost by choosing one option instead of another.
A
Chandra likes her new credit card. She uses it whenever she can, but she's careful to stay below her credit limit. After two months she notices her credit card bill includes huge finance charges. She chose her card because it featured 0% APR, so she doesn't think she should have any finance charges at all. What is the most likely explanation for the finance charges on Chandra's bill? a. The introductory rate on the card is no longer in effect b. This is a case of credit card fraud c. The APR does not apply because she is under the credit limit d. The credit card company made a billing error
A
Check clearing: a. System that ensures the money you deposited in the account is available for withdrawal b. the process in which interest is earned on both the principal and on any previously earned interest c. an automatic loan made to an account if the balance will not cover checks written d. allows travelers to use ATM to get money and make purchases abroad
A
Commercial bank: a. a for-profit institution that offers a full range of financial services, including checking, savings, and lending b. The payee simply signs his or her name on the back of the check. c. a cash card that allows you to withdraw money or pay for purchases from your checking or savings account d. a savings alternative in which money is left on deposit for a stated period of time to earn a specific rate of return
A
Contributions to which type of IRA are tax deductible? a. Traditional IRA b. Roth IRA
A
Credit union: a. a nonprofit financial institution that is owned by its members and organized for their benefit b. rise in the level of prices for goods and services over time c. a purchase by a debit card of a good or service d. Use when mailing checks to be deposited in a checking or savings account. If stolen, it will be almost impossible to deposit the check.
A
Diversification is good because: a. It spreads the risk of investment b. It focuses investments on a single stock to take advantage of growth potential c. Mutual funds have higher fees than individual stocks d. Interest rates rise and fall
A
Equifax is a credit bureau. a. True b. False
A
Goals: a. Things you hope to achieve in your life, like getting a good job, completing your college degree, getting married, owning your own home, or running in a marathon. b. Natural or acquired skills or talents. c. An inherent ability or talent. d. Proficiency acquired through training or experience.
A
How can you make the most of a tight budget? a. All of these b. Buying on sale c. Making a list before shopping d. Setting good priorities
A
If a person in your house was bitten by your dog, which type of insurance would you be covered under? a. Homeowners insurance b. Health insurance c. Disability insurance d. Life insurance
A
If you are a self-employed professional, which plan would work for you? a. Keogh plan b. Employer-sponsored 401(k) c. Traditional pension plan
A
If you file for Chapter 7 Bankruptcy, you will have to sell most of your assets. a. True b. False
A
If your DVD player is stolen from your apartment, what type of insurance would it be covered under? a. Renters insurance b. Homeowners insurance c. Life insurance d. Auto insurance
A
In a Chapter 13 bankruptcy, the debtor usually gets to ____. a. keep most of his or her property b. discontinue alimony payments c. avoid paying debts arising from fraud d. stop payments on educational loans
A
Inflation is: a. A number measured by the government that describes the changing prices of everyday goods. b. Automatically subtracted from interest rates quoted by banks for their savings accounts c. A number set by the government that causes prices to rise
A
Investing in a global stock fund is a good idea to: a. Diversify holdings to spread risk outside the U.S. economy b. Diversify into municipal and corporate bonds c. Keep your portfolio dependent solely on the U.S. dollar d. Focus all risk on the U.S. economy
A
It is important for goals to have accomplishment dates because: a. It is easy to put off long term goals and a deadline keeps you focused b. You will want to compare your success to other peoples' successes c. Bonus money always comes with meeting personal goals d. Career goals are based on interests and aptitudes
A
It is important to balance your checkbook every month because: a. Even automatic check readers can misread an amount you wrote on your check b. Banks calculate interest by hand, and sometimes they forget to do this step c. Otherwise you are likely to spend more money than you earn
A
Life insurance is NOT used for: a. Investing in the stock market b. Providing for dependents c. Burial expenses
A
Match the level of education with the description that best fits the traditional definition for that level of education: Master's degree a. Additional 2-years of study after completing a Bachelor's degree b. 4-year degree c. Additional 4-years of study after completing a Master's degree d. 2-year degree
A
Money market account: a. a savings account that requires a minimum balance and earns interest that varies from month to month b. Protects deposits at banks for up to $250,000 c. personal check with a guaranteed payment d. a small booklet that you use to record activity in your account
A
Money order: a. functions like a check b. Used when you want to transfer a check made out to you to another person. This instructs the bank to pay the check to the new payee. c. a computer terminal that allows a withdrawal of cash from an account d. the percentage of increase in the value of your savings from earned interest
A
No one should choose a goal based on: a. What other people think of the goal, who do not know the person very well b. The type of work that appeals to that person c. Interests, likes, and dislikes d. A hobby that person puts free time into that could become a career
A
Over about 40 years, your portfolio should probably: a. Change from higher-risk to lower-risk investments b. Grow equally well in all sectors, or it is a bad financial plan c. Become less and less conservative, increasing in risk from year to year d. Sell every holding each year to figure out how well you are doing
A
Portfolio A is 100% invested in stocks. Portfolio B is 20% in money markets, 30% in bonds, and 50% in stocks. Which is more diversified? a. Portfolio B b. Portfolio A
A
Resume: a. A brief account of one's work experience and qualifications. b. Entitlements, such as health or life insurance, available in accordance with a wage agreement, insurance policy, or program. c. Mental or physical tension caused by worry over problems we may be experiencing in life. d. A chosen pursuit, profession, or occupation.
A
Social Security Tax and Medicare Tax are the two taxes that make up the FICA Tax. a. True b. False
A
Standard of living: a. A level of material comfort as measured by goods, services, and luxuries. b. A description of the lifestyle that involves a lot of sitting around and not enough physical activity. c. A letter you send with your résumé to provide more information about you. d. Organizing and using your time in a way that allows you to meet your daily needs as well as your shortand longterm goals with as little stress as possible. e. The process of acquiring knowledge and developing skills, often through formal schooling
A
Stop payment order: a. a request that a bank or other financial institution not cash a particular check b. the signature of the payee, the party to whom the check has been written c. a report that accounts for the differences between the bank statement and your checkbook balance d. amount of interest that a $100 deposit would earn, after compounding, for one year
A
Student loans often don't require you to start paying them back until after you've completed the course(s). a. True b. False
A
The Dow Jones Industrial Average is a collection of: a. Thirty U.S. stocks b. Thirty municipal bonds c. Thirty U.S. industries d. Thirty globally diverse stocks
A
The cost of credit on a yearly basis, expressed as a percentage: a. annual percentage rate b. debt collector c. collateral d. grace period e. up-front cash
A
The federal government offers tax breaks for people saving for education. a. True b. False
A
The total dollar amount you pay to use credit is the ____. a. finance charge b. annual percentage rate c. debt payment-to-income ratio d. term of the loan
A
To balance your checkbook: a. Subtract any checks in your check register that are not marked as cleared b. Subtract any deposits in your check register that have not been marked as cleared c. Add the interest paid and bank charges to the register balance d. Add any checks in your check register that are not marked as cleared
A
Travelers check: a. allows purchaser to obtain cash and make purchases in another country b. an automatic deposit of net pay to an employee's designated bank account c. check written by a financial institution, payee is guaranteed funds, purchaser pays check amount plus a fee (money comes out of their account) d. the ability to easily convert financial assets into cash without loss in value
A
What is the main reason people shop? a. To provide for primary needs b. To look stylish c. To express personality d. To have fun with friends
A
When planning to buy a home, your monthly housing related costs should not exceed what percentage of your monthly gross income? a. 28% b. 24% c. 36% d. 50%
A
When should you begin saving for retirement? a. As soon as you enter the workforce b. After age 50 c. Before age 50 and not after
A
When you cosign a loan for a friend, you may be responsible to make loan payments if the other person fails to. a. True b. False
A
Which is NOT something you should look for in a savings account? a. Rewards for using your debit card b. Competitive interest rate c. Free online banking d. Low (or no) monthly fee
A
Which of the following information would not be found in a typical lease? a. The name of the previous tenant b. The beginning and ending dates of the rental agreement c. The amount of the monthly rent payment and the day of the month it is due d. The address of the unit being rented
A
Which of the following is an example of a defined benefit plan? a. A pension b. 401(k) c. Roth IRA
A
You have insurance premiums of $250 due quarterly. How much will you pay annually? a. $1,000 b. $500 c. $750 d. $250
A
You have some cash. You can either invest in a short-term bond that pays 4% or payoff some credit card debt at 9%. Which should you do? a. Pay off the credit card b. Invest in the bond
A
Your apartment gets robbed, and $1,560 worth of your belongings are gone. You have renter's insurance to cover the loss, but your deductible is $500. How much will the insurance company pay you for your loss? a. $1,060t. b. $500 c. $2,060 d. $1,560
A
Your landlord has the right to: a. Charge you the late fee stated in your lease if your rent payment is late b. Terminate your lease if she discovers you have lost your job c. Enter your apartment without your permission to repair a leaky valve in your faucet d. Terminate the rental agreement within 30 days if she finds a better tenant
A
Your return with a diversified portfolio will: a. Rise and fall, but have less risk than a smaller number of stocks and a smaller number of sectors and asset classes b. Be exactly 11.3% every year c. Fall if a single company in your portfolio goes out of business d. Beat absolutely every other investor
A
Good time management skils can help you: (select all that apply) a. Reach your long-term and short-term goals b. Balance work, rest, and recreational activities c. Increase your stress level by running behind and forgetting assignments and appointments d. Minimize stress from feeling too busy
A, B, D
A budget can help you reach a financial goal by: a. Showing you how you can earn more income b. Allowing you to see where you can cut back on spending c. Giving you the tools to change more fixed expenses to flexible expenses d. All of these
B
A cover letter begins with a(n) a. Introduction, and then a heading with the address of the company b. Heading with the address of the company, and then an introduction c. Argument, and then an introduction d. Heading with the address of the company, and then an argument
B
A credit bureau is required to follow reasonable procedures to make sure that ____. a. banks avoid the practice of redlining b. the information in a person's file is correct c. eligible borrowers on public assistance receive credit d. creditors extend credit to retirees
B
A deductible is: a. The amount that is deducted when you buy a policy b. The amount of the loss you pay c. The discount you deduct from your premium d. The discount received by a health care provider
B
A defensive stock: a. Has a small market capitalization b. Is the type of stock that holds a steady value, such as an insurance company c. Is part of the manufacturing sector that sells to the Department of Defense d. Is owned by a company that is currently having a strong downturn
B
A money market account: a. Pays a fixed rate of interest b. Can have a minimum deposit requirement and variable interest, and generally pays better interest rate than a savings account c. Never has a minimum deposit requirement
B
A rebate and a discount are the same. a. True b. false
B
A résumé is usually more than one page in length. a. True b. False
B
Abilities: a. Things you hope to achieve in your life, like getting a good job, completing your college degree, getting married, owning your own home, or running in a marathon. b. Natural or acquired skills or talents. c. An inherent ability or talent. d. Proficiency acquired through training or experience.
B
An American Express card is a credit card. a. True b. False
B
An example of open-end credit is a(n) ____. a. automobile loan b. a credit card charge c. installment loan d. mortgage
B
As a part of the Bureau of Consumer Protection, this agency educates consumers and businesses about their rights and responsibilities: a. Consumer Product Safety Commission b. Federal Trade Commission c. Food and Drug Administration d. Federal Consumer Information Center
B
Banks offer "points" or "rewards" because: a. They like to make your life more fun b. You will be more likely to switch to the bank offering "points" or "rewards" because you feel you are getting "something for nothing" c. They want you to practice good saving habits d. They have excess profits and want to distribute some of those profits to customers.
B
Benefits: a. A brief account of one's work experience and qualifications. b. Entitlements, such as health or life insurance, available in accordance with a wage agreement, insurance policy, or program. c. Mental or physical tension caused by worry over problems we may be experiencing in life. d. A chosen pursuit, profession, or occupation.
B
Blank endorsement: a. a for-profit institution that offers a full range of financial services, including checking, savings, and lending b. The payee simply signs his or her name on the back of the check. c. a cash card that allows you to withdraw money or pay for purchases from your checking or savings account d. a savings alternative in which money is left on deposit for a stated period of time to earn a specific rate of return
B
Business that collects debts for creditors: a. annual percentage rate b. debt collector c. collateral d. grace period e. up-front cash
B
Compounding: a. System that ensures the money you deposited in the account is available for withdrawal b. the process in which interest is earned on both the principal and on any previously earned interest c. an automatic loan made to an account if the balance will not cover checks written d. allows travelers to use ATM to get money and make purchases abroad
B
Credit history includes: a. Only positive items, regardless of your borrowing past b. Savings and credit card accounts c. Library fines d. Being a good friend
B
Endorsement: a. a request that a bank or other financial institution not cash a particular check b. the signature of the payee, the party to whom the check has been written c. a report that accounts for the differences between the bank statement and your checkbook balance d. amount of interest that a $100 deposit would earn, after compounding, for one year
B
FDIC insurance: a. a savings account that requires a minimum balance and earns interest that varies from month to month b. Protects deposits at banks for up to $250,000 c. personal check with a guaranteed payment d. a small booklet that you use to record activity in your account
B
Front end loads: a. Are disguised as 12b-1 fees b. Are paid to the mutual fund company when you first purchase the fund c. Can be compared between different mutual funds by adding the expense ratio and the 12b-1 fee that you find in the prospectus d. Are paid to the mutual fund company after you have held the fund for a long time and you are ready to sell the fund to get your investment back
B
If you buy enough different stocks, you can diversify out all risk in the stock market. a. True b. False
B
If you created a graph with investment risk on the x-axis and investment return on the y-axis and plotted points for two different investments, a line going through the points would probably be: a. Negatively sloped b. Positively sloped c. Have a slope of zero
B
Inflation: a. a nonprofit financial institution that is owned by its members and organized for their benefit b. rise in the level of prices for goods and services over time c. a purchase by a debit card of a good or service d. Use when mailing checks to be deposited in a checking or savings account. If stolen, it will be almost impossible to deposit the check.
B
Job: a. A planned progression of jobs within one or more professions throughout one's working life. b. A regular activity performed in exchange for payment. c. A fixed compensation paid regularly for services. d. What is lost by choosing one option instead of another.
B
Market capitalization: a. Does not change once you buy a stock b. Is the total number of outstanding shares of a company's stock multiplied by the stock price c. Is $2 billion to $200 billion d. Is the difference between the 10-year high and 10-year low of a stock
B
Match the level of education with the description that best fits the traditional definition for that level of education: Bachelor's degree a. Additional 2-years of study after completing a Bachelor's degree b. 4-year degree c. Additional 4-years of study after completing a Master's degree d. 2-year degree
B
Match the payroll tax with the correct tax rate: Medicare Tax a. 6.2 b. 1.45
B
Most landlords require the renter to pay a security deposit at the beginning of the rental agreement. Which of the following is true about the security deposit? a. The deposit is kept by the landlord to cover his management costs b. The deposit can be used to repair damage caused by the tenant during the term of the lease c. The deposit can never be greater than $100 d. None of these
B
Phishing is: a. Using the telephone to intimidate bank customers b. Using a fake Web site or e-mail to intimidate someone into giving away personal information such as user names, passwords, or Social Security numbers c. An automatic transfer of money from one account to another d. What happens when your bank branch calls you to verify unusual purchases
B
Preparing a budget is: a. An ongoing process b. Something you only have to do once in your lifetime c. Not an effective way to save money d. A method for calculating take-home pay
B
Purchasing rather than leasing will generally cause your initial monthly payments to be: a. lower b. higher c. half as much d. the same
B
Question 41 A higher interest rate is usually the trade-off for a ____. a. long-term loanThis is the correct answer. b. short-term loan c. simple interest loan d. secured loan
B
Savings accounts generally offer a higher yield than money market accounts. a. True b. False
B
Sedentary: a. A level of material comfort as measured by goods, services, and luxuries. b. A description of the lifestyle that involves a lot of sitting around and not enough physical activity. c. A letter you send with your résumé to provide more information about you. d. Organizing and using your time in a way that allows you to meet your daily needs as well as your shortand longterm goals with as little stress as possible. e. The process of acquiring knowledge and developing skills, often through formal schooling
B
Social Security replaces about what percent of most people's pre-retirement income? a. 100% b. 40% c. 70%
B
Special endorsement: a. functions like a check b. Used when you want to transfer a check made out to you to another person. This instructs the bank to pay the check to the new payee. c. a computer terminal that allows a withdrawal of cash from an account d. the percentage of increase in the value of your savings from earned interest
B
The Better Business Bureau is: a. A place to report fraud or identity theft b. A nonprofit consumer organization c. A company that develops rules to protect consumers d. A government agency in charge of recalls
B
The Consumer Credit Counseling Service offers to ____. a. help debtors declare bankruptcy b. supervise debt repayment plans c. erase legitimate debts that consumers owe d. grant money for repaying debts
B
The FICA tax is made up of Social Security Tax and Federal Income Tax? a. True b. False
B
The complete record of a person's borrowing: a. creditor b. credit rating c. bankruptcy d. open-end credit e. net income
B
What are some typical expenses for a person just starting out in a rental apartment? a. Interest income, tax refunds b. Rent, renters insurance, transportation costs c. Take-home pay, mortgage insurance d. mortgage & transportation
B
When paying bills online, a payee is: a. A middleman who relays a payment to another party b. Someone to whom you send a payment c. Someone who pays you
B
When writing a check: a. Spell out the dollars and cents in the short box next to the $ symbol b. Spell out the dollars and cents on the long line that ends in "Dollars" c. Always print your signature d. Sign on the line that says "Pay to the order of"
B
Which formula best represents the calculation to determine your GROSS PAY? a. Gross Pay = Hourly Pay - Hours Worked b. Gross Pay = Hourly Pay * Hours Worked c. Gross Pay = Hourly Pay = Hours Worked d. Gross Pay = Hourly Pay + Hours Worked
B
Which is NOT a kind of health insurance: a. Health maintenance organization b. Point-to-point service plan c. Point-of-service plan d. Preferred provider organization
B
Which of the following is the best definition of a minimum payment on a credit card? a. A fee that must be paid whether the card is used or not b. The smallest payment that will keep a credit card holder in good standing with the lender c. The interest on the purchases that were made on the credit card d. A low introductory payment offered by the lender for a few months until the card holder has established good credit
B
Which of the following statements is true? a. With an adjustable rate mortgage, the interest rate always increases after the first five years b. You will always pay less interest with a 15-year mortgage than with a 30-year mortgage, provided that the interest rate is the same for both loans c. If you refinance your home, the interest rate will remain the same
B
Which statement is true of an adjustable rate mortgage? a. Payments will adjust each year based on the amount of equity you have in your home b. The interest rate will stay fixed for a period of time, then adjust either up or down based on an index c. An adjustable rate mortgage always includes a balloon payment at the end of the 7th year d. The interest rate can only change twice during the course of the loan
B
With this type of insurance, if you are involved in an accident both parties will be covered by their own insurance policies: a. liability b. no-fault c. collision d. comprehensive
B
You always want the lowest possible deductible because it means you will pay less out of pocket in case of a loss. a. True b. False
B
You can tell a scam or fraud because: a. It will have the word "scam" or "fraud" prominently featured in the letter or e-mail b. It may tell you that you have won a lottery you never entered, or try to get you to tell your account and personal information c. You will get a letter or announcement from your bank warning you about the fraud before it happens
B
Which of the following items is a result of regular exercise? (select all that apply) a. Your heart will wear out faster b. Preventing weight gain c. Helping you stay mentally alert d. Helping reduce stress levels
B, C, D
Which of the following can be a result of not getting enough sleep? (select all that apply) a. Faster reaction time b. Weakened immune systemThis answer is correct. c. Increased chance for a motor vehicle accident d. Increased rick for depression e. Increased risk for diabetes f. Inability to pay attention and retain information g. Increased risk for heart trouble
B, C, D, E, F, G
401K plans are so named because: a. You can only contribute up to $401,000 b. Over 400,000 people have taken advantage of them c. Of the tax law that authorizes them
C
A credit union: a. Never has interest rates as good as a bank b. Can't keep savings accounts c. Requires membership, but in other respects is like a bank d. Is only open to college students
C
A good password: a. Should be used for all your online accounts, including ones you share with friends b. Should be written down in your wallet so you will have it wherever you go c. Includes a combination of letters and numbers that are memorable and meaningful to you d. Is an easily remembered number such as your phone number or Social Security number
C
A last resort legal process in which some or all of the assets of a debtor are distributed among creditors because the debtor is unable to pay his or her debts: a. creditor b. credit rating c. bankruptcy d. open-end credit e. net income
C
A warranty from the manufacturer covers: a. Nothing after sixty days b. Everything that goes wrong for a year c. Only what is included in the warranty statement d. All moving parts
C
All of the following would be considered closing costs except for: a. Title insurance b. Fee for obtaining credit report c. Cost of repainting the kitchen before moving in d. A title search
C
An ATM check card: a. Can overdraw your account if you make a store purchase beyond your current account balance b. Is exactly the same as an ATM debit card c. Can only be used to withdraw money that is in your account, not to overdraw your account
C
Aptitude: a. Things you hope to achieve in your life, like getting a good job, completing your college degree, getting married, owning your own home, or running in a marathon. b. Natural or acquired skills or talents. c. An inherent ability or talent. d. Proficiency acquired through training or experience.
C
Bank reconciliation: a. a request that a bank or other financial institution not cash a particular check b. the signature of the payee, the party to whom the check has been written c. a report that accounts for the differences between the bank statement and your checkbook balance d. amount of interest that a $100 deposit would earn, after compounding, for one year
C
Cashier's check: a. allows purchaser to obtain cash and make purchases in another country b. an automatic deposit of net pay to an employee's designated bank account c. check written by a financial institution, payee is guaranteed funds, purchaser pays check amount plus a fee (money comes out of their account) d. the ability to easily convert financial assets into cash without loss in value
C
Cleared checks: a. Are automatically redeposited if the check image is lost b. Should be used to notify the people you wrote the check to, since they haven't cashed the checks yet c. Are available as online images for you to refer to, or as reduced images sent with each monthly statement d. Are always sent to the account holder with each monthly statement
C
Cover letter: a. A level of material comfort as measured by goods, services, and luxuries. b. A description of the lifestyle that involves a lot of sitting around and not enough physical activity. c. A letter you send with your résumé to provide more information about you. d. Organizing and using your time in a way that allows you to meet your daily needs as well as your shortand longterm goals with as little stress as possible. e. The process of acquiring knowledge and developing skills, often through formal schooling
C
Credit card holders are known as convenience users when they ____. a. pay finance charges b. carry smart cards c. pay off their balances each month d. carry balances beyond the grace period
C
Debit card: a. a for-profit institution that offers a full range of financial services, including checking, savings, and lending b. The payee simply signs his or her name on the back of the check. c. a cash card that allows you to withdraw money or pay for purchases from your checking or savings account d. a savings alternative in which money is left on deposit for a stated period of time to earn a specific rate of return
C
Financial goals help savings grow by: a. Keeping 12b-1 fees low b. Increasing the rate of return c. Helping investors concentrate on the goal, instead of immediately spending money d. Determining how much the stock market will increase or decrease each year
C
Form of security to help guarantee that a creditor will be repaid: a. annual percentage rate b. debt collector c. collateral d. grace period e. up-front cash
C
Growth stocks: a. Are mainly good investments for those who need income from dividends b. Are easily identified because they are everyday household names c. Require research from an investor, pour most of their income back into growing the business, and have the potential to do very well as part of a portfolio d. Are mainly good investments for those who need income from dividends
C
How much of your take-home paycheck should be budgeted for base rent? a. 50% b. 40% c. 30% d. 20%
C
If you crashed your car into a house, which kind of insurance would you use: a. Disability insurance b. Renters insurance c. Auto insurance d. Homeowners insurance
C
If you get your first credit card while you're a full-time student, what can you expect about the card's APR on outstanding balances? a. It will probably be low until you graduate, and then it will rise b. It will probably be about the same as the APR on your parents' card c. It will probably be high d. It will probably be low
C
If you have a long-time horizon for investing, you should: a. Diversify into savings accounts and U.S. savings bonds b. Keep at least 75% cash or money market funds for immediate availability c. Lean toward high-risk investments with high-return potential d. Own only one stock
C
Improving your credit score will let you get: a. Both of these b. Higher interest rates on savings accounts c. Lower interest rates on loans d. Neither of the these
C
Inflation is: a. The reason most people get ahead by saving money in a mattress b. The annual rate of return on a savings account c. The rise in the cost of purchasing everyday goods d. Always exactly 5% per year
C
Internships: a. Always last for one year b. Can never turn into a paid position c. Can be paid or unpaid d. Are always paid
C
Long term investors: a. Buy and sell on a daily basis b. Always lose money in the long run c. Sit tight through bull markets (market is doing well) and bear markets (market is doing poorly) d. May adjust their holdings to sell when others are selling and markets are falling
C
Matt has $471.60 in his checking account and feels he's doing pretty well financially.Then his car stops running. His mechanic is able to fix it in a day, but with the towing charges, parts, and mechanic's labor, he now needs to pay the service center $624.11 so he can drive his car to work. Of the following choices, which is the best course of action for Matt? a. Pay the service center with his MasterCard debit card b. Call his employer to say he won't be able to come to work c. Pay the service center with his Visa credit card d. Write a check for $624.11 and hope the service center doesn't take it to the bank before next payday
C
Money in your emergency fund could be wisely used: a. To lend money to a friend to pay off credit card debt b. To put money down on a new car c. To pay for an unforeseen health expense d. To buy a new pair of shoes that went on sale
C
Money market refers to: a. The market the Federal Reserve uses to buy up old bills and coins b. The market on which different currencies are bought and sold c. A collection of highly liquid short term investments
C
Most insurance companies sell you insurance because: a. They are charitable institutions with a mission to reduce hardship b. The government requires them to c. They generally take in more in premiums than they pay out
C
Oh no! Someone stole your credit card and charged $2,500 worth of purchases before you even knew the card was missing. How much of the unauthorized charges can you be required to pay? a. zero b. $250 c. $50 d. $2,500
C
On average, as recommended by the National Foundation of Sleep, what is the recommended amount of sleep for adults ages 18-64? a. 10-12 hours b. 6-8 hours c. 7-9 hours d. 8-10 hours
C
Online banking is probably not necessary if: a. You have a history of overdraft charges due to not knowing your balance b. You have five automatic payments per month and your paycheck is automatically deposited c. You only have two checks per month and no automatic deposits d. You need to download your bank transactions into Quicken to help you keep track of your business expenses
C
Online bill payment: a. Can only be set up by making an appointment with a bank branch manager b. Cannot be set up online c. Can happen automatically every month, even if you set it up just once d. Will definitely cause an overdraft charge
C
Overdraft fees can be avoided by: a. Trying to keep a minimum balance of $10 in your account b. Going to the bank branch after being charged the fee and explaining that you meant to have more money in the account but forgot c. Knowing your account balance and what upcoming bills will be paid d. Having a cell phone bill that automatically re-ups your minutes without you being aware of how much money that will cost
C
Overdraft protection: a. Is always a free service provided by banks b. Is always a waste of money because people don't bounce checks any more c. Is like a credit card you don't use until your checking account gets below a zero balance d. Should be bought by everyone, even if they always keep a significant amount of money in their account
C
Overdraft protection: a. System that ensures the money you deposited in the account is available for withdrawal b. the process in which interest is earned on both the principal and on any previously earned interest c. an automatic loan made to an account if the balance will not cover checks written d. allows travelers to use ATM to get money and make purchases abroad
C
Point-of-sale transaction: a. a nonprofit financial institution that is owned by its members and organized for their benefit b. rise in the level of prices for goods and services over time c. a purchase by a debit card of a good or service d. Use when mailing checks to be deposited in a checking or savings account. If stolen, it will be almost impossible to deposit the check.
C
Salary: a. A planned progression of jobs within one or more professions throughout one's working life. b. A regular activity performed in exchange for payment. c. A fixed compensation paid regularly for services. d. What is lost by choosing one option instead of another.
C
Someone who can tolerate a risky investment would: a. Keep all money in a savings account at a bank for long-term growth b. Be very concerned that a downturn would wipe out the long-term gains c. Understand that an investment that fell when the entire market fell was not necessarily a bad investment d. Wake up in the middle of the night worrying about the investment
C
Stress: a. A brief account of one's work experience and qualifications. b. Entitlements, such as health or life insurance, available in accordance with a wage agreement, insurance policy, or program. c. Mental or physical tension caused by worry over problems we may be experiencing in life. d. A chosen pursuit, profession, or occupation.
C
The location of a home is important because: a. Not all locations have good school systems or the same amenities b. Homes in good locations will usually appreciate in value c. All of these d. A good location will make a home easier to sell later
C
The most secure Internet access is available through: a. Wi-Fi at a public library b. Wi-Fi at a coffee house c. Cable modem, DSL, or dial-up Internet
C
This allows you to use a car for a specified period of time for a specified monthly payment: a. loan b. contract c. lease d. gift
C
This includes all the money you will have to pay to a lender beyond the amount you need to purchase the car: a. transaction fees b. lease c. finance charges d. down payment
C
This number helps you compare loans: a. GPA b. principal c. APR d. credit score
C
This will allow you to borrow money to buy a car, but you will have to pay it back with interest over time: a. lend-lease b. gift c. loan d. lease
C
To build up a good credit history, you should: a. Always pay at least the minimum amount due on your credit card b. Get as many credit cards as you can c. Get a Social Security Number if you do not already have one
C
When you are looking for a used car, this resource will help you best determine the value of a particular make and model: a. Road and Track b. Car and Driver c. Kelley Blue Book d. Consumer Reports
C
Which factor is most important in securing well-paying jobs throughout your career? a. Having a clean driving record b. Having a car c. Having a good education d. Having established credit
C
Which of the following best describes a lease? a. An informal agreement between the renter and the landlord in which the renter signs it when he or she is thinking about renting an apartment b. A document that describes in detail the apartment for rent c. A legal document that contains all the details of the agreement between the landlord and renter which is signed by both parties d. An agreement between someone searching for an apartment to rent and his or her real estate agent
C
Which of the following is a benefit of an employer-sponsored plan? a. Employers often match contributions b. Contributions are not taxed c. All of these
C
Which of the following is an example of a defined contribution plan? a. Keogh plan b. 401(k) c. Both answers are correct
C
Which of the following utilities may be billed separately from your rent? a. Water b. Phone service c. All of these d. Electricity
C
Why is it harder to estimate expenses than to estimate income? a. Your income will never change b. You can never truly know how much you spend c. Expenses often change more from month to month d. None of these
C
Why is it not a good idea to make early withdrawals from your 401(k)? a. You will lose your tax-deferred status on the entire account b. You cannot put the money back in once you take it out c. You usually have to pay a strict penalty
C
You can best compare credit card offers by looking at these two features: a. Principal and interest b. Minimum payment c. APR and fees d. Introductory rate and credit limit
C
You can order a copy of your credit report: a. Only if you are applying for a credit card b. Only if you have good credit because this service is not available if you are a poor risk c. Free online from the Fair Isaac Corporation d. Free online from www.annualcreditreport.com once a year from each of the credit reporting companies
C
You forgot to pay last month's credit card bill. Your creditor will probably: a. Cancel your account b. Send you a reminder to pay the bill c. Add finance charges and late fees to your bill d. Reduce your minimum payment
C
You ran short of cash and borrowed $50 from your rich cousin. When you paid her back, she insisted that you owed $60. What is the extra $10 called? a. Bribery b. Credit c. Interest d. Principal
C
Your credit history tells: a. The history of your parents' saving, borrowing, and repayment performance b. The history of the formation of the Experian and Equifax companies c. The history of your saving, borrowing, and repayment performance d. The history of your grade report cards
C
Identity theft is important to be aware of because: a. Once your identity is stolen, it can't be used again by another thief b. Once your identity is stolen, it will not affect your life once you are on your own c. Once your identity is stolen, it is impossible to ever have good credit again d. Once your identity is stolen, it can be fraudulently sold, and others can continue to use your good credit to obtain credit cards and loans
D
In general, buying an individual stock from a mid-sized company is less risky than: a. Buying a U.S. savings bond b. Buying an S&P 500 mutual fund c. Buying a bond mutual fund d. Buying a "penny" stock
D
In which of the following locations could you find an ad for an apartment? a. On the Internet b. In the local newspaper c. In the phone book d. All of these
D
Liquidity: a. allows purchaser to obtain cash and make purchases in another country b. an automatic deposit of net pay to an employee's designated bank account c. check written by a financial institution, payee is guaranteed funds, purchaser pays check amount plus a fee (money comes out of their account) d. the ability to easily convert financial assets into cash without loss in value
D
Match the level of education with the description that best fits the traditional definition for that level of education: Associate's degree a. Additional 2-years of study after completing a Bachelor's degree b. 4-year degree c. Additional 4-years of study after completing a Master's degree d. 2-year degree
D
Match the level of education with the description that best fits the traditional definition for that level of education: Doctoral degree (Ph.D.) a. Additional 2-years of study after completing a Bachelor's degree b. 4-year degree c. Additional 4-years of study after completing a Master's degree d. 2-year degree
D
Negative items on a credit report that are not correct: a. Can never be removed b. Don't affect your credit rating c. Are best ignored d. Should be removed once the mistake is shown to the credit reporting company
D
One of the two types of life insurance is: a. Terminal life insurance b. Two-term insurance c. Living life insurance d. Whole life insurance
D
Opportunity cost a. A planned progression of jobs within one or more professions throughout one's working life. b. A regular activity performed in exchange for payment. c. A fixed compensation paid regularly for services. d. What is lost by choosing one option instead of another.
D
Payday loans: a. Are the best way for young students to build up a good credit rating back to top b. Are a cheap way to borrow money, since it is for such a short term c. Are available from your local bank branch d. Charge far more in interest than a typical credit card interest charge
D
Prepaid travelers check: a. System that ensures the money you deposited in the account is available for withdrawal b. the process in which interest is earned on both the principal and on any previously earned interest c. an automatic loan made to an account if the balance will not cover checks written d. allows travelers to use ATM to get money and make purchases abroad
D
Rate of return: a. functions like a check b. Used when you want to transfer a check made out to you to another person. This instructs the bank to pay the check to the new payee. c. a computer terminal that allows a withdrawal of cash from an account d. the percentage of increase in the value of your savings from earned interest
D
Restrictive endorsement: a. a nonprofit financial institution that is owned by its members and organized for their benefit b. rise in the level of prices for goods and services over time c. a purchase by a debit card of a good or service d. Use when mailing checks to be deposited in a checking or savings account. If stolen, it will be almost impossible to deposit the check.
D
Scholarships: a. Are never as good of a deal as loans from the student's bank b. Are only available once a student is enrolled in a college c. Are always applied for by the student alone without any help from the high school, college, or training program d. Are available for residents of every state, all religious affiliations, and academic interest
D
Skills: a. Things you hope to achieve in your life, like getting a good job, completing your college degree, getting married, owning your own home, or running in a marathon. b. Natural or acquired skills or talents. c. An inherent ability or talent. d. Proficiency acquired through training or experience.
D
The ability to borrow money for a variety of goods and services up to a limit set by the company issuing the credit: a. creditor b. credit rating c. bankruptcy d. open-end credit e. net income
D
The interest is tax deductible on a ____. a. bank loan b. credit union loan c. credit card loan d. home equity loan
D
The most important thing to consider when choosing an apartment is: a. Whether or not the apartment is located on a bus line b. Whether or not pets are allowed c. How many bedrooms there are d. If you can afford to pay your rent and other costs on an ongoing basis
D
This type of insurance pays to fix damages that you cause, but does not cover your own car: a. None of the above b. No-fault c. Collision d. Liability
D
Time Management: a. A level of material comfort as measured by goods, services, and luxuries. b. A description of the lifestyle that involves a lot of sitting around and not enough physical activity. c. A letter you send with your résumé to provide more information about you. d. Organizing and using your time in a way that allows you to meet your daily needs as well as your shortand longterm goals with as little stress as possible. e. The process of acquiring knowledge and developing skills, often through formal schooling
D
US savings bonds: a. Are purchased for face value and pay interest above that amount b. Are risky investments c. Can only be purchased outside of the US d. Are worth face value at maturity
D
What is the name of the leading provider of student loans, an organization founded in 1972 as a government sponsored agency, which is now a publicly traded company? a. Ginnie Mae b. FICA c. Freddie Mac d. Sallie Mae
D
When estimating income for your budget, it is better to be: a. A little high b. Income....what income? c. Either, it doesn't matter d. A little low
D
When is a contract made between a buyer and a seller? a. Only when the purchase is more than $500 b. When you buy something online c. When you buy something with a credit card d. Every time you make a purchase
D
Which formula best describes the amount an insurance company will pay you for your loss? a. Payment = Loss x Deductible b. Payment = Loss + Deductible c. Payment = Loss / Deductible d. Payment = Loss - Deductible
D
Which formula best represents the calculation to determine your NET PAY? a. GROSS PAY / TAXES = NET PAY b. GROSS PAY + TAXES = NET PAY c. GROSS PAY * TAXES = NET PAY d. GROSS PAY - TAXES = NET PAY
D
Which is NOT a money management skill discussed in the reading material? a. Estimating expenses b. Formulating a budget c. Saving for emergencies d. Managing your time in a healthy manner
D
Which of the following are considerations in choosing an apartment: a. Cost b. Proximity to work c. Availability of mass transit d. All of these
D
Which of the following is NOT a type of insurance? a. Identity theft b. Auto c. Homeowners d. Deductible
D
Which of the following is an example of irregular income? a. A weekly allowance b. A part-time job c. A full-time job d. A graduation gift
D
With online banking, you can: a. Put a check through a scanner to pay bills automatically b. Access accounts that are not your own and transfer money into your own account c. Use a telephone to talk to a bank teller d. Pay bills, check your balance, and see if checks have cleared on your bank's online Web site
D
You invested $1,200 in a mutual fund. Your account now has a value of $1,333. Your gain was: a. $1,333 b. $233 c. $1,200 d. $133
D
Your FICO score: a. Depends most on new account information b. Is better if you have not held credit accounts for very long c. Does not depend on your payment history d. Depends most on the amounts you owe and your payment history
D
Your total debt from all loans (including mortgage) should not exceed what percentage of your gross monthly salary? a. 26 percent b. 16 percent c. 40 percent d. 35 percent
D
Education: a. A level of material comfort as measured by goods, services, and luxuries. b. A description of the lifestyle that involves a lot of sitting around and not enough physical activity. c. A letter you send with your résumé to provide more information about you. d. Organizing and using your time in a way that allows you to meet your daily needs as well as your shortand longterm goals with as little stress as possible. e. The process of acquiring knowledge and developing skills, often through formal schooling
E
Certified check: a. a savings account that requires a minimum balance and earns interest that varies from month to month b. Protects deposits at banks for up to $250,000 c. personal check with a guaranteed payment d. a small booklet that you use to record activity in your account
O
A "point" on a loan equals: a. 10% of the loan amount b. 0.1% of the loan amount c. 2% of the loan amount d. 1% of the loan amount
D
A car and a computer are examples of what? a. Primary needs b. None of these c. Excess d. Secondary needs
D
A document showing that you have completed a course of study is called a: a. cover letter b. resume c. affadavit d. diploma
D
A landlord can refuse to rent you an apartment if which of the following is true? a. You are married b. You are a Buddhist c. You are of Irish descent d. You own a cat and a dog
D
A personal investing plan: a. Should be prepared every six months by a different financial advisor b. Will always have funds from a single mutual fund company c. Will focus on small-cap stocks for those people who do not like risk of any kind d. Is a good way to build toward a financial goal
D
A real estate agent is able to: a. Arrange for you to tour homes that you are interested in purchasing b. Get you a lower price on a home c. Assist you at closing d. Both Arrange for you to tour homes that you are interested in purchasing and assist you at closing
D
A regular paycheck helps your credit score because: a. It shows you will not pay your bills on time b. It has taxes pulled out c. It can be cashed and spent quickly d. It indicates you are likely a good credit risk
D
A simple formula for finding your equity in your home is: a. None of the these b. Down payment plus sum of mortgage payments to date c. Purchase price of your home minus outstanding loan balance d. Market value of your home minus outstanding loan balance
D
A time period during which no finance charges are added to a credit card account: a. annual percentage rate b. debt collector c. collateral d. grace period e. up-front cash
D
An online account transfer is: a. Moving from one MySpace page to another while online b. An automatic payment of a cell phone bill from a credit card c. An online bill payment d. A transfer of money from one account to another conducted online
D
An overdraft fee: a. Is the minimum balance required to be held in a bank account b. Is a fee charged by a business when a check you write to them bounces c. Is a fee paid to a payday loan company d. Is the fee charged by a bank when your checking account balance goes below zero
D
Annual percentage yield: a. a request that a bank or other financial institution not cash a particular check b. the signature of the payee, the party to whom the check has been written c. a report that accounts for the differences between the bank statement and your checkbook balance d. amount of interest that a $100 deposit would earn, after compounding, for one year
D
Bond funds: a. Are riskier than owning individual corporate bonds b. Will lose all value if a single bond defaults c. Are investment bargains because their price is so low d. Spread the risk of individual bonds by collectively owning more and less-risky bonds, with higher and lower rates of return
D
Career: a. A brief account of one's work experience and qualifications. b. Entitlements, such as health or life insurance, available in accordance with a wage agreement, insurance policy, or program. c. Mental or physical tension caused by worry over problems we may be experiencing in life. d. A chosen pursuit, profession, or occupation.
D
Certificate of deposit: a. a for-profit institution that offers a full range of financial services, including checking, savings, and lending b. The payee simply signs his or her name on the back of the check. c. a cash card that allows you to withdraw money or pay for purchases from your checking or savings account d. a savings alternative in which money is left on deposit for a stated period of time to earn a specific rate of return
D
Check register: a. a savings account that requires a minimum balance and earns interest that varies from month to month b. Protects deposits at banks for up to $250,000 c. personal check with a guaranteed payment d. a small booklet that you use to record activity in your account
D
DRIP programs: a. Send the stockholder a check for each quarterly dividend b. All have exactly the same costs, fees, and expenses as a brokerage account c. Siphon money out of a savings account and can never be redeemed d. Are dividend reinvestment programs
D
FDIC is: a. A private corporation b. The real cause of the 1929 stock market crash c. A government program that funds all interest payments for savings accounts d. A government insurance program that will pay back account holders if the bank or lending institution fails
D
How much money should you save each month? a. Only save your spare change b. Always save 10% of your income c. Save $50 from every paycheck d. You must decide what you can afford
D
How should a cardholder begin to correct a mistake on a credit card bill? a. Get a new personal identification number. b. Stop payment on the creditor's check. c. Shred papers that contain personal information. d. Notify the creditor in writing.
D
You are responsible to provide proof that disputed information on your credit report is inaccurate. a. True b. False
b