Personal Finance Final

Imani attends a town hall meeting where a tax increase is proposed to help pay for a new bridge. After the meeting, she reads Facebook comments that complain about the already high taxes in her town, which is a view that she agrees with. To avoid confirmation bias, Imani should... a. join a Facebook group that organizes citizens that are opposed to the tax increase b. allow others to make the decision because she is too biased c. avoid social media since it will influence her decision d. seek out comments that support the tax increase and the bridge project to provide an alternative viewpoint

D

Investments of time, effort, and money that cannot be recovered are... a. Avoidable costs b. Relevant costs c. Opportunity costs d. Sunk costs

D

Which of the following is a TRUE statement about check-cashing stores? a. They tend to charge consumers a lot of hidden fees b. Customers use check-cashing stores even though the employees are unfriendly and often make customers feel embarrassed or out-of-place c. Their checking accounts typically cost less than traditional bank accounts d. They make their money by charging fees for transactions that can be done for free by customers with a traditional checking account

D

Which of the following statement is TRUE? a. The majority of Americans have an adequate emergency fund. b. The majority of Americans have an adequate emergency fund, but do NOT have sufficient amounts of money saved for retirement. c. The majority of Americans have sufficient amounts of money saved for retirement. d. The majority of Americans do NOT have an adequate emergency fund or sufficient amounts of money saved for retirement.

D

Which of the following transactions may be missing when you go online to review your checking account balance? a. ATM cash withdrawal from yesterday b. Debit card transaction from purchasing snacks at a local convenience store today c. Automatic payment for your car loan paid two days ago d. Check that you mailed to your cousin for his birthday today

D

You will need to pay a 15.3% self-employment tax if you earn $1,100 in a year... a. Working at the local ice cream store b. Interning at a local design company c. Babysitting your cousin's kids d. Screen printing and selling custom made t-shirts

D

Aaron realizes he has a budget deficit of roughly $175 at the end of two months in a row. Which of these options makes the most sense for him to fix his problem? a. Cancel his cable TV subscription and go out to dinner three fewer times each month with friends b. Sell his current car and get a less expensive vehicle c. Contribute $100 less to savings each month and $75 less to his retirement fund d. Start paying just the minimum monthly payment on his student loan and credit card debt, instead of the extra he's been contributing

A

Danaisha does all her grocery shopping at organic markets and has a monthly grocery bill of $325. Charles says that Danaisha is wasting her money on wants instead of focusing on needs. He buys in bulk, uses coupons, and shops at Save-More for a monthly bill of $195. Who's budgeting correctly for food? a. Both, because needs vs wants are determined on an individual basis b. Charles, because he's taking efforts to save money by focusing on his needs only c. Neither, because they should meet in the middle somewhere. Charles should focus more on health, and Danaisha should cut her spending. d. Danaisha, because she is focusing on her health, which will have a guaranteed payoff in the long run

A

Imagine two scenarios: 1) You see a rare sports card being sold for $500 in a store but choose not to buy it because you think it's too expensive. 2) You find a rare sports card worth $500 in your parents' attic. Rather than sell it, you choose to put it in a case and display it in your room. In scenario 1, you are putting more value on your $500 than the card. In scenario 2, you are putting more value on your card than the $500. This is an example of what? a. Endowment effect b. Confirmation bias c. Overconfidence d. Fear of missing out

A

In current markets, which of these represents a competitive but realistic interest rate on a savings account? a. 2% b. 3% c. 7% d. 17.99%

A

Janet has a snowboard she doesn't use anymore, but loss aversion has made her question whether or not she should sell it. Her friend Jack suggests she use the Overnight Test. Which of the following scenarios demonstrates the strategy she's using? a. Imagine the snowboard was replaced with cash, then decide if she's happier with the cash or the snowboard. b. Imagine the snowboard was replaced with cash, then make a plan about how to spend the cash. c. Imagine the snowboard was replaced with cash, then figure out how to keep the cash and get her snowboard back. d. Imagine the snowboard was replaced with cash, then figure out how to use the cash to get her snowboard back.

A

Janine is considering what auto costs she is going to have after buying a new Honda Civic. She has budgeted enough money for the monthly auto loan payment, gas, and auto insurance. Has Janine factored in all of the costs associated with car ownership? a. No, she needs to factor in other costs such as maintenance, emergency repairs, etc. b. No, she does not need to include the cost of auto insurance as it is included in her auto loan payment. c. No, she does not need to include the cost of gas as it is covered under her auto insurance policy. d. Yes, these are the three costs she should expect to pay once she is a car owner.

A

People are compelled to buy MORE stuff for all of the following reasons EXCEPT... a. Scientific research proves that the more items we own, the happier we tend to be b. The media portrays that the more stuff we have, the happier we will be c. We tend to want more compared to those around us d. Once the initial novelty of a recent purchase wears off, we look to buy the next new thing

A

Research done on peoples' salaries and happiness levels have shown that... a. Humans typically become accustomed to how much they earn and eventually want more b. Most people need to earn at least $200,000 a year in order to be happy c. Most people are satisfied with their current annual salaries d. Increasing your annual salary is guaranteed to increase your long-term happiness

A

Sebastian began day trading stocks at the beginning of the summer. After a month, he made a profit of $200. Due to his short-term success and his belief that he is a highly skilled trader, Sebastian puts his entire savings into the market. This is an example of a. Overconfidence Bias b. The Endowment Effect c. The Fear of Missing Out (FOMO) d. Confirmation Bias

A

What does the term "withholding" mean in reference to your paycheck? a. It is how much is being taken out of your paycheck in taxes. b. It is the amount of your paycheck that you are NOT being taxed on. c. It is how much you are going to owe the government when you file your annual tax return. d. It is how much you earn and includes salary, bonus and commissions.

A

Which of the following individuals or groups would be the LEAST likely to look at your credit score? a. A bank representative who is helping you open a savings account b. Employers c. Credit card companies d. Auto insurers

A

Which of the following is TRUE about a lease agreement? a. A lease is an agreement that includes details about rent, apartment policies, vacating, etc. b. A lease is an agreement between you and your roommates that you submit to the apartment owner. c . You never have to pay any fees when you sign a lease. If you do, that means it is a scam. d. A lease often has information about your prior housing experience; it's a record that the apartment owner can use to see if you are a good candidate.

A

Which of the following is an effective strategy for personal saving? a. Save a certain percentage of each paycheck and deposit it directly into a savings account b. Cover all of your wants and needs and save whatever is left over c. Wait until the end of the month and save whatever is left in your checking account d. Take out a payday loan so you can save before you receive your paycheck

A

Which of the following scenarios BEST demonstrates FOMO (Fear of Missing Out)? a. José wants to go see a movie that all of his friends have seen and are raving about b. Angela sees an advertisement for a pair of shoes and decides to buy them d. David goes on a vacation to Europe and posts about it on social media every day e. Megan takes a baking class after seeing a sign for the class at her favorite bakery

A

Which of the statements below is TRUE about filing your taxes, assuming your only income comes from the salary you earn at BigTech Company? a. You must file your tax return by April 15th of the following year or request an extension by that date b. You need to file your tax return by the end of the calendar year (typically December 31st) c. If your employer takes out federal income taxes through payroll withholdings, you do not need to file a tax return d. You do not need to pay any income taxes until April 15th, so you should ask your company to wait until after that date to withhold any money

A

Which statement best describes why payday loans are sometimes referred to as "predatory lending?" * a. Lenders "prey" on low-income borrowers who have little to no other options for obtaining a loan b. Competition to qualify for these loans is fierce, like a predator c. The salespeople who work at these locations are often mean and unfriendly d. "Predatory lending" is an official category the government uses to describe these particular types of loans, based on their fine print

A

Why do so many people continue to use payday loans despite the financial risk? a. Consumers need quick access to money that is not provided by other financial institutions. b. If paid back on time, payday loans can significantly increase your credit score. c. Payday loans usually come with much lower interest rates. d. Payday loans are low-balance loans, so they are very easy for most borrowers to repay

A

Why is it important to be extremely careful when completing your 1040 form? a. The 1040 form determines whether you owe additional taxes or are entitled to receive a refund from the government b. Making even one mistake on your federal taxes can result in your being convicted of a crime c. Completing the 1040 incorrectly will mean the wrong amount of taxes will be withheld from your paychecks going forward d. Mistakes on your 1040 form make you ineligible for employment during the next year

A

You are starting your first job and you are asked to complete some paperwork on your first day. Which form will determine how much money is withheld from your paycheck for federal and state income taxes? a. W-4 b. I-9 c. 1040 d. W-2

A

You're paying your credit card bill and your student loan payment each month, but you're falling behind on your auto loan payment. Which friend's advice could have a NEGATIVE impact on your credit score? a. Debbie says, "Stop making the credit card payment for a few months until you're caught up on the auto loan." b. Joanie says, "Call the auto lender and see if you can negotiate a lower monthly payment or some other deal." c. Angie says, "Pick up a second job for as long as it takes to accumulate enough money to make all your payments, even if it means losing time with friends and family." d. Betty says, "Cut down to a bare-bones budget, where your necessities and your debt repayments take first priority. Cut everything non-essential."

A

Your friend Laila is talking to you about the benefits of tax filing software. Which of the following is true? a. You can avoid the costs of having to pay a professional, though you may have to pay for the software and/or e-filing online. b. Filing your taxes using the software is always free of charge. c. You are 50% less likely to make a mistake when e-filing your taxes than if you were to file them using paper forms. d. You are guaranteed a higher refund than if you were to use a paper form or hire a professional.

A

Your friend confides in you that he has a low credit score. What is the single best way for him to improve his score? a. Make on-time payments b. Cancel his credit cards c. Get a car loan d. Check his credit score

A

All of the following explain why humans might "follow the herd" EXCEPT... a. Fighting social pressure can be difficult to do b. People prefer having opinions that are very different from those of others c. It can be uncomfortable standing out from the crowd d. Humans evolved to stick with the herd to survive

B

Greg is trying to decide whether he needs a car or not when he moves to the city. Which of the following would convince Greg to get a car rather than use public transportation? a. There are several public transportation routes between Greg's apartment and work. b. Using public transportation, Greg's commute to work one way is two hours. c. The cost of public transportation is less than Greg's monthly car payment. d. Greg's company covers half the cost of his monthly public transportation pass.

B

Heather receives a phone call, in which an automated voice states that her credit card has been used fraudulently and that she must enter her 16-digit credit card number, using the keypad of her phone, to clear up the error. What should Heather do next? a. Hang up and wait for the end of her credit card billing cycle to see if there really was a fraudulent charge. b. Hang up and call her credit card company using the 1-800 number on the back of her card to inquire about the issue or report the attempted phone fraud c. Enter the 16-digit card number, but don't enter her PIN or the 3-digit code from the back of the card d. Push 0 or say "operator" to speak with a representative from the credit card company instead

B

How often do customers typically receive a bank statement for their checking account? a. Annually b. Monthly c. Weekly d. Daily

B

If you are trying to protect your checking account information, it is dangerous to... a. Shop on secured websites when entering in your account information online. b. Carry the PIN number for your debit card with you in your purse, wallet, or backpack. c. Shred documents that have your account number on them. d. Check your ATM and debit card transactions on a frequent basis.

B

Isaiah works for the summer at a technology company and has a salary for the summer of $3,000. After Federal and state taxes, Social Security, and Medicare are deducted, his take-home pay is $2,500. Which of the statements below is correct? * His gross pay is $2,500 and his net pay is $3,000. His gross pay is $3,000 and his net pay is $2,500. His gross and net pay are $3,000. His gross and net pay are $2,500.

B

Jamie is researching places to live after graduating college. He asks you, "I keep coming across this phrase 'cost of living. I've never heard of it before. Do you know what it means?" Which of the following definitions would you choose to explain to Jaimie what "cost of living" means? a. The cost of living refers to the cost of relocating from one city to another. b. The cost of living refers to the prices of goods and services needed to sustain an average level of standard of living in an area. c. The cost of living refers to the average amount consumers spend on entertainment and dining out in a specific area. d. The cost of living refers to the fluctuation in rent prices on a monthly basis in one specific area.

B

John wants to buy a car and is trying to decide whether he wants to accept a pre-qualified auto loan from his credit union or if he wants to directly finance the car from the dealership. What should he do? a. Finance the car with the credit union - since they're a local organization, they always have the customers' best interests at heart b. Compare the two offers and choose the one through which he'd pay the least amount of money overall c. Compare the two offers and choose the one with the longest term so that he has more time to pay it off d. Finance the car directly with the dealership since they always have better interest rates

B

Juan saved $1,000 from his summer job cleaning pools. Which of these savings vehicles would work best for him if he doesn't need access to the money for a number of years AND wanted to earn the highest interest rate? a. Money Market account b. Certificate of Deposit c. Regular savings account d. Checking account

B

Juanita has a part-time job that pays $12/hour and works about 50 hours every month. Her withholdings are Social Security (6.2%), Medicare (1.45%), and federal income tax (10%). What is her approximate net pay? a. $600 b. $500 c. $700 d. $120

B

Leila just graduated from college and is comparing a few different cities to move to. Which of these factors is the LEAST important thing for her to consider right now? a. Employment opportunities b. Average cost of Uber, Lyft, or taxi fare c. Food and grocery store options in the area d. Average rent for an apartment

B

Mia is opening her first checking account, and she's trying to decide whether she should sign up for overdraft protection. Which friend's advice is MOST accurate? a. Donnie says, "Yes, you'll have to pay a fee for each overdraft, but you DON'T have to pay the bank back the money you overdrew the account by." b. Frank says, "Overdraft protection may seem handy if you have an emergency (like needing gas to get to work) but you might pay lots of overdraft fees if you don't keep track of your account closely." c. Alex says, "If you say "No" to overdraft protection, and you TRY to withdraw more than what's in your account, the bank will contact you to see if you want them to cover it." d. Jordan says, "With overdraft protection, you never have to worry about how much money is in your account."

B

What are the two most important factors in calculating your credit score? a. Amounts owed and length of credit history b. Payment history and amounts owed c. Length of credit history and new credit inquiries d. Payment history and types of accounts

B

When a bank says their savings account earns 1% interest, that typically means you will earn 1% interest over what period of time (Note: this is not referring to the compounding frequency or frequency of interest payment)? a. Monthly b. Annually c. Quarterly d. Daily

B

When you complete your 1040 form, if you overpaid your taxes and the government owes you money, that is called a __________. a. direct deposit b. refund c. deduction d. withholding

B

Which of these account types allows you to write checks from the account? a. Checking accounts only b. Checking accounts and money market accounts c. Checking accounts, online savings accounts, and money market accounts d. Checking accounts and online savings accounts

B

You have a credit card and want to know the best way to use it to boost your credit score. Which step will have the GREATEST impact? a. Put the credit card in a drawer and don't ever use it b. Use less than 30% of the credit limit on your card and pay it off in full every month by the due date c. Make the minimum payment required on your credit card every month by the due date d. Always carry a balance from month to month

B

You overhear your cousin talking about the importance of creating and sticking to a budget. Which of the following reasons he gives below is actually FALSE? a. Having a budget can help you create an emergency fund. b. Using a budget can qualify you for special discounts at your favorite stores c. Using a budget can allow you to work towards your financial goals. d. A budget can help you identify any bad spending habits.

B

Which TWO of the following statements are advantages of online banking? a. Once you set up online banking, your bank will waive overdraft, ATM, and monthly fees. b. With online banking, you can view your daily transactions and balances, rather than waiting for your monthly statement c. Using online banking you can request transfers, pay bills and automate your savings without visiting the bank branch d. You can shop online only if your bank account has online banking features.

B & C

Herd mentality may explain why... a. Akshay bought a shirt he liked from an unpopular brand b. Ginnifer decided to keep her current phone even though her closest friends bought the new version c. Mason went to see a movie with his friends even though he didn't like the genre d. Davona chose to skip dinner with her friends and watched a movie at home instead

C

How has social media marketing evolved over the past few decades? a. Modern marketing creates a less seamless shopping experience for consumers b. Modern marketing urges you to make financial decisions that align with your goals c. Modern marketing utilizes extremely detailed user data to create personalized ads for each user d. Modern marketing makes it easy to distinguish advertising from other types of content

C

Joelle wants to have an emergency fund to cover 6 months of her expenses. Her monthly gross pay is $4,000 and her monthly expenses are $2,000. If she plans to save 10% of her gross pay each month, how long will it take her to build her emergency fund? a. 24 months b. 9 months c. 30 months d. 3months

C

Marquis is starting a fast food job during his senior year of high school. He lives with his parents and they will claim him as a dependent on their taxes this year. He earns $2000. Based on how he completed his W-4, his employer withheld $200 in federal income taxes from his paychecks. What will happen if Marquis doesn't file taxes in April? a. The IRS will refund his $200 directly to him. b. The IRS will fine Marquis $75 or more for not filing taxes. c. Nothing will happen, but Marquis will miss out on his potential refund. d. The IRS will refund his $200 to his parents.

C

When determining whether you NEED to file a federal tax return, each of these questions matters EXCEPT... a. How much income did you earn this year? b. What type of income did you earn this year? c. What state do you live in? d. Are you claimed as a dependent on anyone else's tax return?

C

Which of the following are the three largest categories of federal government spending? a. Infrastructure, Defense, and Science b. Education, Defense, and Food/Agriculture c. Health, Military, and Interest on Debt d. Veterans, Infrastructure, and Education

C

Which of the following paycheck withholdings puts money into a retirement investment fund that you will manage? a. Social Security b. Medicare c. 401(k) contribution d. Federal income taxes

C

Which of these is an example of "Keeping up with the Joneses?" a. Applying to the top colleges, to see if you'll get accepted & what financial aid packages they'll offer b. Buying plane tickets for a vacation well in advance so that you'll benefit from cheaper prices c. Buying new sneakers the day they come out because you know others in your class will have them, too d. Saving for retirement as soon as you graduate college, to take advantage of compounding interest

C

Which of these statements about saving is INCORRECT? a. Billions of dollars are spent on marketing to persuade consumers to spend money instead of saving b. Without a separate savings account to pay yourself first, it's more likely that you'll spend all of your income each month c. It is extremely difficult to open a savings account, as you typically need at least $10,000 for your initial deposit d. People often believe they are saving when they buy products at a listed discount, even if they didn't need the product in the first place

C

You are doing research on a new electric car that you are interested in buying. You only visit the car company's website and an online message board of electric car enthusiasts to do your research. This strategy may lead to ... a. Loss Aversion b. Herd Mentality c. Confirmation Bias d. The Endowment Effect

C

Your friend gives you a gift. Then, they offer to trade you another item of similar value. According to the endowment effect, most people would keep the item... a. They could sell for the most b. They were offered second c. They received first d. They think looks the best

C

I forgot to pay my credit card bill one month. For how long will that payment information show up on my credit report? a. Seven years b. One year c. Once I make the payment, it will disappear d. Ten years

A

Unlike traditional economics, behavioral economics believes that * a. People do not always behave in a rational way when making economic decisions b. People behave in a rational way when making economic decisions c. People will always update their viewpoints based on new information d. There is no way to predict how people will make economic decisions

A

Stanley deposits $1,000 into a savings account that pays 1% interest. At the end of the first year, he's earned $10 in interest and there is $1,010 in the account. If the account has simple interest, the 1% interest for year two would be based off ____________. If the account has compounding interest, the 1% interest for year two would be based off ________________.(NOTE: The first choice goes in the first blank, the second choice goes in the second blank) a. The year one account balance ($1,010); The year one interest ($10) b. The year one account balance ($1,010); The original deposit ($1,000) c. The original deposit ($1,000); The year one account balance ($1,010) d. The original deposit ($1,000); The year one interest ($10)

C

Which response best completes the sentence "It's best to begin establishing credit when you're young because ________" ? a. Interest rates will only continue to go up as you get older b. Credit scores are free for anyone under the age of 25 c. You will likely need a credit history to rent your first apartment, finance your first car, or open an unsecured credit card d. You need a credit history and report to qualify for Federal student loans

C

When using social media, it's important to remember that... a. Marketers have your best interests in mind and want you to be financially responsible b. Social media ads are trying to get you to buy stuff you NEED, not want c. The more likes a post has, the more trustworthy and accurate the information is likely to be d. People typically only post about the best parts of their lives on social media

D

Which represents the best time to start saving for your retirement? a. At age 45, so you have exactly 20 years until retirement b. Once you are debt-free, including paying off all credit cards, auto loans, and your mortgage c. Right after you pay off your student loans d. As soon as you graduate and have your first full-time job

D

17. Experts recommend that you accumulate enough to cover 3 to 6 __________________ of expenses in your emergency fund. a. Weeks b. Days c. Months d. Years

C

22. Fill in the blanks: Direct deposit typically refers to your ______ sending your ______ electronically to your bank account. a. parents, allowance b. employer, bills c. employer, paycheck d. state government, taxes

C

You are at the checkout counter at the local supermarket and use your debit card to pay for your groceries. Where does the money for this purchase come from? a. Your credit card company covers the cost b. It is deducted from your credit card account c. Your credit card company provides you with a cash advance to cover the cost d. It is deducted directly from your checking account

D

According to the Equal Credit Opportunity Act, which of the following factors CAN a lender legally use to charge you a higher interest rate? a. Your credit score b. Your age, if you're under 21 c. Your marital status, if you're single d. The percentage of your income that comes from Social Security payments

A

What is the best advice to prevent identity theft? a. Be careful with your credit and bank account numbers, create strong passwords, and beware of phishing emails c. Use a debit card instead of a credit card whenever possible Avoid buying anything online, as that's how 90% of identity theft occurs d. If you check your three credit reports every year, it's almost impossible to become a victim of identity theft

A

Akshay worked at a cafe while he was a college senior in Boston, Massachusetts. After graduating in June, he moved back to his home in California and started a full-time job in September. Which of the following statements is true? a. Akshay will need to file a federal tax return this year and file state returns the following year. b. Akshay will need to file a federal tax return and a state tax return for both Massachusetts and California. c. Akshay will need to file a federal tax return and a state tax return for Massachusetts. d. Akshay will need to file only a federal tax return.

B

Elaine is an employee. Which of the following steps is she responsible for? a. Request a W-2 annually b. Complete a W-4 c. Send withholding amounts to the federal government d. Determine how much tax to withhold based on W-4 information

B

Now that Sanjana is done with college, she is trying to decide whether or not she should buy a new laptop for herself. She has made a preliminary list of questions she can ask herself to determine if the new laptop is a need or a want. Which of the following questions would you ELIMINATE from this list? * a. Is this the right time to buy this laptop or will it likely be on sale later? b. What model of laptop is trendy right now with people my age? c. How am I going to pay for this laptop? If I have to charge it or take out a loan, can I afford the monthly payments? d. Can I afford this laptop right now?

B

Which of the following describe what a "dependent" is for tax purposes? * a. Someone who is temporarily disabled b. Someone under the age of 19 who you financially support c. Someone who is a full-time student under the age of 30 d. Someone who financially supports you

B

Which of the following is a BAD budgeting strategy to use if you want to save money at the grocery store? a. Build a weekly meal plan around items you already own or items that are on sale that week, rather than just choosing foods you'd like to eat b. When comparing similar products, focus on the price only c. When comparing similar products, be sure to compare based on unit price d. Prepare a grocery list before you go to the store, and avoid buying items that aren't on the list

B

Which of the following statements about the W-2 form is TRUE? a. A W-2 lists all the money you earned in cash over the last year b. You need a separate W-2 form from EACH of your employers in order to file your taxes c. The total wages you earned from ALL jobs you worked in the previous year appear on ONE W-2 form d. The W-2 includes information about the interest you earned from your investments

B

Which statement accurately describes how the 50/20/30 Rule would break down your take-home pay? a. 50% of your income should be used for flexible expenses, 2050% on flexible expenses, 20% on financial goals, and 30% on living expenses and essentials b. 50% on living expenses and essentials, 20% on financial goals, and 30% on flexible spending c. 50% on financial goals, 20% on flexible expenses, and 30% on living expenses and essentials% of your income should go to financial goals, and 30% should go to living expenses and essentials d. 50% on financial goals, 20% on living expenses and essentials, and 30% on flexible expenses

B

You are putting together your first post-graduation budget. Your take-home pay will be $2,500 per month. You estimate your monthly costs to be rent of $900, car-related expenses to be $550, entertainment of $200, food expense of $250, cable bill of $75, the mobile phone of $100, student loan payment of $400, and other expense of $150. How would you describe your budget after analyzing all of your income and expenses? a. You have a surplus of $125. b. You have a deficit of $125. c. You have a surplus of $2,500. d. You have a deficit of $2,625.

B

Before submitting an application to rent an apartment, you would like to go and inspect the property. Which of the following reasons is the LEAST important reason for why you would go and inspect the apartment? a. You want to check on the condition of the property and get a feel for the surrounding neighborhood. b. You want to document any damage that you find in the apartment so it is repaired before you move in. c. You want to show the apartment to your family and friends. d. You want to meet with the landlord or property manager to be sure that all of your questions are answered.

C

Franny is a recent college graduate with little budgeting experience. She is trying to stick to her budget but is finding that she continues to have a deficit at the end of each month. Which of the following steps she takes could explain why this keeps happening? a. Franny has identified her needs and wants. b. Franny uses her net pay when budgeting her money. c. Franny tracks her monthly spending at the end of the month. d. Franny uses the 50-20-30 rule to allocate her money.

C

Upon completing your 1040, you realize that you owe the IRS $427. Each of the following is a possible way to pay the taxes you owe EXCEPT... a. Set up a direct payment from your bank account. b. Write a check and mail it to the IRS. c. Tell the IRS to take out more taxes next year to pay back the $427. d. Use your debit or credit card online or by phone.

C

When do you start paying taxes? a. When you get a full-time job (part-time does not count) b. When you are notified by the IRS that you are required to pay federal income taxes c. When you make more than the minimum income requirement d. When you turn 18

C

Which of the following explains why it might be a good idea to buy an item in a smaller size with a HIGHER unit price instead of buying it in bulk at a LOWER unit price? a. You have a large apartment with plenty of space for storage. b. You have a roommate who'd like to share the item because she likes it too. c. You don't plan on using this item too often, and it'll go to waste if you have it for too long. c. You need lots of this item and go through it quickly.

C

You're considering moving into a 3 bedroom apartment with 2 roommates, rather than living on your own post-college. Mark which of YOUR expenses would likely decrease by having roommates. a. Groceries and eating out b. Cell phone bill c. Rent d. Bedroom furniture

C

Grace is buying a new car and wants to negotiate with the dealership to bring the price down. Which of the following strategies will help Grace the MOST? a. Walk into the dealership, state her desired price for the car, walk out and wait for the salesperson to say "yes" or "no". b. Say the name of a pricing guide like "Edmunds" or "Kelly Blue Book" while speaking with the salesperson to show them that she's done her research. c. Shop at just one dealership so that she can talk to multiple salespeople there to see who will give her the best deal. d. Come to the dealership with a pre-qualified loan in hand from her bank so that she can negotiate the terms of a loan through the dealership.

D

Ming is excited to start looking for an apartment. She knows that you just learned about renting an apartment and gives you a list of steps she thinks she should take to find the right fit for her. Which of the following steps would you recommend she can SKIP when doing her INITIAL research? a. Research the cost of utilities b. Find out if she would be living with roommates, and if so, how many c. Find out how long it would take her to go to work and other places she goes to frequently d. Ask the leasing office what color the room is painted to make sure that she is comfortable with the look and feel of the room

D

Out of the following group, who does NOT have to file a tax return? a. Isaiah, who owns his own business and generated an income of $7,000. b. Janet, who earned $28,200 but was paid entirely in cash. c. Dani, who is a cafe barista and earned $13,000 in wages and $250 in tips. d. Max, whose total income from three separate part-time jobs was $9,500.

D

What tax form am I? I am received when you start a job. You use me to prove that you are eligible to work in the U.S., and you must provide forms of identification when submitting me. a. 1099 b. W-4 c. 1040 d. I-9

D

Which of these boxes of cereal has the LOWEST unit price? a. Cereal C, which costs $2.50 for a 10 oz. box b. Cereal D, which costs $4.50 for an 8 oz box c. Cereal A, which costs $3.20 for a 16 oz. box d. Cereal B, which costs $5.00 for a 32 oz. box

D

You are interested in renting an apartment after graduating college. You meet with the landlord, complete the application and after checking your credit background and references, the landlord approves your application. In most cases, you will need to provide the landlord with ___________________ at the time you sign the lease in order to get the apartment. a. First month's rent b First and last month's rent c. $1,000 security deposit to cover any damages to the apartment d. First and last month's rent + a security deposit to cover any damages to the apartment

D

You want to make earnings from your part-time job to pay for a new laptop. Your monthly take-home pay is $500 and the laptop costs $1,200. What percentage of your pay do you need to save in order to buy the laptop in 12 months? a. 20% b.5% c. 15% d. 10%

A

You buy a stock that has a price of $50 per share. A week later the stock's price drops to $25 per share (it's lost half its value). Loss aversion suggests that you are likely to do what? a. Do nothing b. Sell the shares c. Buy more shares d. Look for other stocks to buy

B

You earn a salary of $40,000 per year and decide to save 20% of your gross pay. You then set a goal of creating a $16,000 emergency fund. How long will it take for you to achieve your goal? a. 3 years b. 2 years c. 1 year d. 6 months

B

What is the most important question you should have after seeing an ad about a check-cashing business? a. How many locations do you have? b. What are your hours of operation? c. How many tellers do you have? d. Can I get a written copy of all of the fees that you charge for your services?

D

A person-to-person payment app could be used in each of the following scenarios EXCEPT... a. Ahmed's soccer coach pays the team's registration fee for a big tournament, and each player then owes him $35 for their share of the registration fee. b. Rafael writes the whole monthly rent check to the landlord, and his roommates Valerie and Carlos pay Rafael for their share of the monthly rent. c. Tina pays her neighbor $200 for breaking his window with a softball. d. Mia pays the delivery driver from Cheesy Pizza Co. for a pizza she orders for her Spanish study group.

D

Each of the following statements is an example of confirmation bias EXCEPT... a. Interpreting information to support your existing beliefs b. Only remembering details that uphold your beliefs c. Ignoring information that challenges your beliefs d. Seeking information that challenges your beliefs

D

Melvin is 19 years old and wants to begin establishing a credit history. Which action should he take to meet that goal? a. Always say "credit" when asked "credit or debit?" at a store b. Any time he borrows money from a friend or family member, be sure to pay it back promptly c. Take out some private student loans, even though he doesn't need them because he has grants and scholarships d. Ask his parents to cosign a credit card or add him as an authorized user on their credit card

D

Michael observed he felt the pain of losing a $20 bill more than he felt the joy of finding it on the sidewalk the week before. This is a result of... a. Sunk cost b. Endowment effect c. Overconfidence d. Loss aversion

D

People who experience FOMO may... * a. create and stick to a monthly budget b. save a percentage of their paycheck each month c. donate money to a cause they care about d. go into debt to keep up with everyone else

D

The largest source of fees for banks when it comes to checking accounts is... a. Wire transfer fees b. Interest expense c. Check printing fees d. Overdraft fees

D

You deposit a birthday check by using the bank app that you have on your smartphone. What is the standard amount of time that you will need to wait in order to get access to these funds? a. 30 business days b. Available the same day c. Available immediately d. Usually 1-7 business days later

D

All of the following would show up on a credit report EXCEPT... a. Student loan activity b. Credit card payment history c. Salary of your current job d. Payment history of your car loan

C

How can your credit score impact your financial situation? a. Your credit score can determine whether you are approved for a loan and what the interest rate on that loan will be b. Consumers with low scores get lower interest rates on loans than those with high scores c. It generally has no impact on your financial situation d. Consumers with high scores can borrow and those with low scores cannot

A

Three of these statements best describe a checking account. Which statement best describes a savings account? a. This account pays you interest on the money you have put away for later to help your money grow. b. This account offers a convenient way to pay bills and access cash from an ATM. c. This account type allows an unlimited number of transactions per month. d. This account is automatically debited when you use a debit card.

A

What is meant by the term "impulse shopping?" a. Buying an item without giving it much thought, maybe because it's on sale or you see it and simply love it b. Using your emergency fund, rather than your checking account, to make a purchase c. Shopping online instead of in stores d. Comparison shopping for more expensive items while doing less work to compare cheaper products

A

Which of these lists ranks the savings options from highest expected interest rate to lowest expected interest rate? a. 10-year CD, 5-year CD, Online savings account, Savings account at traditional bank b. Savings account at a traditional bank, online savings account, 10-year CD, 5-year CD c. Online savings account, 5-year CD, Savings account at traditional bank, 10-year CD d. Savings account at traditional bank, online savings account, 5-year CD, 10-year CD

A

Which of these represents a potential consequence of neglecting to pay your credit card or loan debts? a. Wages or tax refunds can be garnished b. Lender can file bankruptcy on your behalf c. Lose your job d. Collection agencies begin visiting your friends and family to collect your debt

A

Which statement best describes the difference between saving and investing? a. Saving goes into an FDIC insured bank while investing typically goes into stock or bond markets b. Saving is for low-income people, while investing is for rich people c. Saving is done with small amounts of money, and investing is done with large amounts of money d. Saving protects your money from inflation while investing does not protect your money from inflation

A

You are 18 years old, opening your first savings account, and are considering three options: BANK A is not FDIC insured, has an interest rate of 5%, and a minimum deposit of $25. BANK B is FDIC insured, has an interest rate of 0.01%, and a minimum deposit of $50. Bank C is FDIC insured, has an interest rate of 0.02%, and a minimum deposit of $10,000. All three have fees competitive with other banks. Which bank is the best option? a. Bank B b. Bank C c. All 3 banks are equally good options d. Bank A

A

Your sister Reagan has her paycheck direct deposited into her checking and savings accounts each pay period. She asks you how she should split her paycheck between the two accounts. What is the best advice you could offer her to encourage her savings habit? a. Add at least 10-20% of her paycheck to her savings account and the remaining 80-90% to her checking account b. Direct deposit the full amount of the check each month into her checking account and then decide later how much to put into savings c. Add at least 95% of her paycheck to her checking account and 5% to her savings account because you know that saving is hard for her d. Do not have her paycheck direct deposited since it is NOT a secure way to transfer money

A

Your teacher tells you about the importance of checking your credit report. Which government-run website allows you to download your credit report for free on an annual basis? a. annualcreditreport.com b. creditkarma.com c. freecreditreport.com d. getcreditreportshere.com

A

All of the following are types of overconfidence bias EXCEPT... * 1/1 a. Overplacement b. Overgeneralization c. Overprecision d. Overestimation

B

FDIC Insurance is... a. Insurance bank branches can buy to protect their business against fraud and scams. b. Protection for bank customers' deposits up to $250,000, guaranteeing their money is still available if the bank goes out of business. c. Optional coverage consumers can purchase so that their bank deposits remain safe. d. Required if you want to do online or mobile banking.

B

How is an online savings account different from a traditional savings account? a. An online savings account includes a mobile app, while a traditional savings account does not b. An online savings account is offered by a bank that customers can only access online rather than at a physical bank branch c. Online savings accounts cannot be FDIC insured, whereas traditional savings accounts can d. Online savings accounts will only offer electronic statements rather than paper copies

B

Jillian is a high school student who typically earns $275 every two weeks at her part-time job. She is responsible for paying her own cell phone bill, gas when she drives her mom's car, and costs of going out with friends. She wants to set a low balance alert. What amount probably makes the most sense for Jillian? a. $5 b. $50 c. $500 d. $5000

B

A website tells you, "Only one left!" while shopping online. Which loss aversion strategy is this website using? * a. Coupons b. Buy now, get free shipping c. Scarcity and urgency d. Free trials and samples

C

When signing up for a new checking account you answer "No" and opt-out of overdraft protection. On this day, you have $10 in your account and go out and use your debit card to buy lunch for $12, a movie ticket for $12, and dinner for $15. What is likely to be the outcome resulting from these transactions? a. You will likely be charged an overdraft fee for EACH transaction and need to repay the bank the funds overdrawn ($29) + interest b. Since you turned down overdraft protection, the bank will not allow you to overdraw your account so your card will be denied in these 3 instances c. Your account will be closed d. The bank will provide you with five days to add funds to your account to cover the overdraft but will not charge you any fees

B

Which is an advantage of paying your bills using the online bill pay feature with your checking account? a. It eliminates late fees. b. It saves time and paper. c. There is typically a large fee to set up and use this feature. d. The company you are paying always receives the money on the same day.

B

Which of the following could have a NEGATIVE impact on your credit score? a. Paying down balances on your credit card accounts b. Applying for multiple credit cards in a short period of time (e.g., a week) c. Paying your bills on-time d. Decreasing your utilization of credit

B

Which of the following is a sign that you have a budget deficit? a. Your savings account balance grows every month. b.You overdraw your checking account on a consistent basis (with a $34 cost per overdraft). c. You pay more than the minimum monthly loan payment towards your student loans. d. Your checking account balance grows every month.

B

Which of these costs would be the MOST difficult to adjust if you were looking to reduce your expenses? a. Expenses for new clothes b. Loan payment on a new car c. Postponing a purchase for a big-screen TV d. Dining out at local restaurants

B

While opening your checking account, the bank representative seems very interested in getting you to opt in for overdraft protection. What might explain his motivation? a. He knows that once you decide to opt into overdraft protection, you cannot opt out b. He may be receiving a sales commission for every customer who opts in to get overdraft protection c. He is required by law to sign you up for overdraft protection d. He wants to minimize the fees you might pay to the bank

B

Who tracks all of your credit information? a. Federal government b. Companies named Equifax, Experian and TransUnion c. Lenders d. Consumer Financial Protection Board (CFPB)

B

An "experiential purchase" is... a. Something that was made by hand rather than at a factory b. Something that commemorates an experience, like a souvenir c. Something that creates or enhances an experience or connects us with other people d. Something that has a lot of monetary value

C

Due to hedonic adaptation, what do you expect would happen to Anu's level of happiness after buying a new jacket? a. It would remain at a baseline level, then decrease over time b. It would initially decrease, then return to a baseline level c. It would initially increase, then return to a baseline level d. It would remain at a baseline level, then increase over time

C

Fill in the blanks with the correct responses. If you follow the 50-20-30 rule of budgeting, you'll be putting 50% of your monthly income toward _______________, 20% of your monthly income toward _____________, and 30% of your monthly income toward ______________. a. Savings, needs, wants b. Needs, wants, savings c. Needs, savings, wants d. Wants, needs, savings

C

Jocelyn gets a text alert from the bank that her account balance has dropped below $100 after a series of $20 ATM withdrawals. She has not used her ATM in over a week and wonders what she should do. What would you recommend? a. Wait a week as it is fairly common for the bank to catch mistakes like this b. Check your wallet to be sure your debit card has not been stolen. If you still have it, then you should not worry. c. Contact your bank immediately as it appears that your account may have been hacked d. Wait until your monthly statement arrives so you can check to see if those withdrawals are still there

C

What is the mathematical formula that you would use to describe the financial activity on a bank statement? a. Ending Balance = Previous Balance + Deposits + Withdrawals + Fees b. Ending Balance = Previous Balance - Deposits - Withdrawals + Fees c. Ending Balance = Previous Balance + Deposits - Withdrawals - Fees d. Ending Balance = Previous Balance - Deposits + Withdrawals - Fees

C

When signing up for a new checking account, you answer "Yes" to receive overdraft protection. On this day, you have $10 in your account and go out and use your debit card to buy lunch for $12, a movie ticket for $12, and dinner for $15. What is likely to be the outcome resulting from these transactions? a. Your account would be closed b. The bank will provide you five days to add funds to your account to cover the overdraft and no fees will be assessed c. You will likely be charged an overdraft fee for one or more of the transactions and also will need to repay the bank for the amount overdrawn ($29) d. Since you requested overdraft protection, the bank will not allow you to overdraw your account so your debit card will be denied

C

Which of the following best describes what a cognitive bias is? a. The belief that a person should change their opinions when new facts arise b. A rational decision that is based on research and facts c. A strong, preconceived notion that people have that is based on incomplete information d. the belief that we are right until someone provides information that contradicts our belief

C

Which of the following is TRUE about checking accounts? a. They must pay an interest rate of at least 1% annually b. Banks can only change the fee policies on your account once per year, between Jan 1 and Jan 31st c. Banks can change the fee policies as long as they put the changes in writing and notify you d. Banks cannot change the fee policies on your account while it is open

C

Which of the following is a way to access the money in your checking account? a. Receiving a person-to-person payment from your friend b. Taking out cash using your credit card at an ATM machine c. Using your debit card to pay for groceries at the checkout d. Depositing a paycheck at an ATM

C

Which of the following statements about banks is FALSE? * a. If it is FDIC-insured, your money is safe even if the bank fails b. Many banks pay interest on the money you deposit with them c. Historically, savings accounts earn higher returns than investments in the stock market d. Money in a bank is usually easy to access via ATM, debit card or check

C

Which of the following transactions will REDUCE your checking account balance immediately? a. Using your credit card to pay for your school books b. Writing your monthly rent check which you will mail tomorrow c. Using your debit card to pay for groceries at the supermarket d. Depositing a check at a local bank branch

C

Why is investing a better option than saving when it comes to planning for retirement? a. Investing begins as soon as you open a bank account, so you can start early in life b. Investing usually has lower interest rates, so it offers a better deal c. The stock market historically has returns higher than the rate of inflation, so your money can actually grow d. Investing is guaranteed to produce the large sum of money needed for a happy retirement

C

You overhear your Aunt Tina tell your mom that she, her husband, and their kids are "living paycheck to paycheck." What does Aunt Tina mean by that? a. Aunt Tina gets a paycheck one month, and her husband gets a paycheck the next month; they alternate pay periods b. Aunt Tina uses her paychecks as income to deposit into her checking and savings accounts c. Aunt Tina and her family don't have any money saved, and their paychecks are just barely covering monthly expenses, so they use every dollar every month d. Aunt Tina and her family have high paying jobs and don't worry much about money

C

You spend an entire Saturday going to car dealerships in search of a used car. You spend hours looking at cars and even test drive a few, but there are none you like that fit your budget. What is the sunk cost you should ignore when deciding whether or not to buy a car that day? a. The time it will take to drive home b. The cost of the warranty c. The time you spent looking for cars that day d. The cost of the car

C

Which best describes the Debt Snowball method for paying off debt? a. Make the monthly minimum payments on all your debts and put any extra cash toward the debt with the highest balance b. Only make payments on your smallest debt first, then move on to your second smallest debt, and so on... c. Once your debt "snowballs" out of control, hire a certified credit counselor to help get your finances back on track d. Make the monthly minimum payments on all your debts and put any extra cash toward the debt with the lowest balance

D

Which of the following best describes what Two Factor Authentication (2FA) is? a. You use your credit card to buy some clothes and choose "credit" when asked "Debit or Credit?" at the register. b. When logging into an account, you must log in from two different devices within a 10-minute window. c. You pay for your groceries using your debit card at the register and have to enter in your PIN number. d. You type in your account password on your laptop and are prompted to enter a one-time code you receive via text message.

D

You are developing a savings plan and using short-, medium-, and long-term goals to motivate you. Which represents possible goals from short-term to long-term? Save for... a. retirement, college tuition, a vacation b. A new cell phone, dinner with friends this weekend, a new bike c. Retirement, a house down payment, college tuition d. A new cell phone, college tuition, a house down payment

D

You find an error on your credit report. Your credit card account indicates that you are 60 days late on your payment but you have bank records indicating that you have always made on-time payments. What should you do FIRST? a. Contact the credit reporting agency b. Call the police to report the possible identity theft c. Wait a few weeks to see if it gets resolved d. Contact the credit card company to have them fix it

D