WiSE Test Economics and Personal Finance (50 Questions)

Savings instrument that requires a deposit for a period of time during which there is a penalty for withdrawals

A bank Certificate of Deposit is a:

Creates a check that can be cashed by anyone

A blank endorsement on a check:

Is purchased with a specific amount of money that can be used to pay for goods or services

A cash card generally:

enable us to make choices that reflect what is important to us.

A clear understanding of our personal values will:

the total amount of money contributed plus investment earnings.

A company offers a defined-contribution pension plan which means that upon retirement the employee will receive

pay the complete balance each month.

A good practice when using credit cards is to routinely

a budget variance.

A man budgeted $200 a month for clothing. This month the man spent $150 on clothing therefore that budget item is considered to have

To cover the cost of replacement should the television get damaged or stolen.

A person buys a flat screen, plasma, theater-like television. The person has homeowner's insurance. Why would it be appropriate to add a personal property floater to that insurance?

the government imposes an excise tax on them.

A person complains about how expensive it is to be a cigarette smoker. One of the reasons cigarettes are so expensive is that

Notify the credit card companies in order to negotiate a new payment plan.

A person has three credit cards with very large outstanding balances and is unable to make payments on any of them. Which action should the person take?

there are state usury laws.

A person is convinced that a lending institution is charging too much interest for a loan. This person should be aware that

more of the same stock.

A person owns a stock that pays a $2.00 a share dividend. If the person chooses to reinvest that dividend, this means that the $2.00 will go toward buying

better off financially the person is.

A person's debt ratio shows the relationship between debt and net worth. The lower the ratio the

Securities

A pharmacy is to drugs as the American Stock Exchange is to:

An ATM transaction

A type of electronic funds transfer (EFT) is:

Realistic with a target date

A well stated financial goal is:

"I think I need a personal property floater."

A woman has just received a very expensive piece of jewelry. The woman has homeowner's insurance. Which statement would it be most appropriate for her to make to her insurance agent?

tax and penalty free

After five years of owning a Roth Individual Retirement Account (IRA), a person wants to buy his first home, the person can withdraw money from the Roth IRA

Apartment rent

An example of a fixed expense is:

80 shares of the stock and the price of each share is $40.

An investor bought 40 shares of ABC corporation's stock at $80 a share. Two weeks later, the investor receives notice that the corporation has approved a 2-for-1 stock split. Based on this information, the investor would own at the moment of the split

one of the apartments is not rented.

As an investment, a person decides to buy a small house that has three rental apartments. The profits from this investment may be lower than expected if the

Give loans to consumers and businesses.

Banks use savings account deposits to:

The Securities and Exchange Commission (SEC)

Before the Kiss Corporation can issue stocks or bonds, it must register the issue with:

$27,000

Ben's annual income is $30,000, and he contributed $3,000 to a traditional IRA in his local bank. What is his taxable income?

a secure, low risk investment.

Buying a treasury bill (T-bill) is best for investors who are looking for

There is a 10% penalty on any money she takes out before age 59

Can Cathy withdraw money from her IRA savings account?

variable expenses that change from one period to another.

Electricity and food expenditures are:

Fixed expenses

Expenditures that remain constant from one time period to another are:

Savings and loans.

Financial services and products generally offered by banks and credit unions include:

a calculated amount of money which includes the premiums paid as well as the interest on that money.

For the past five years, a person has had a $20,000 whole life insurance policy that has a cash value clause. The person decides to surrender the policy. At the time of surrender, the person will receive

lower the premium.

Generally, the higher the deductible on an insurance policy, the

Need to be realistic, have a target date, and, if possible, an associated cost.

Goals:

Save at least three months of income.

How can individuals be prepared for losing their job or having a large medical expense?

Avoid giving your Social Security number on a phone call you did not initiate

How can you avoid becoming a victim of identity theft?

Make a budget and consider ways to reduce expenses or increase income.

I find myself using my credit card to cover the cost of food or rent because I'm regularly short on cash at the end of each month. The best thing to do is:

2%

If a person has $1,000 in a savings account and earns $20 a year in interest on that account, the rate of return on the money is close to

US Treasury Department.

If a person makes a deposit of $10,000 or more into a bank account, the bank must notify the:

Free copy of the credit report if you request it within 60 days

If you are denied credit based on your credit report, you are entitled to a:

Usually must first meet with your primary health care physician

If you have a managed health care plan, it means that you:

Insured shares the risk of loss with all the other policyholders.

Insurance is frequently described as a method of "sharing the risk" because the:

Unlimited liability

Jami lost her debit card. She did not report it missing for 3 months. If an unauthorized person used her debit card, her maximum liability is:

Vote by mail or online through a proxy

Jennie owns Disney shares and cannot attend the annual stockholder meeting. She can:

Some types of checking accounts pay interest.

Joan wants to open a checking account and wonders if checking accounts pay interest. How would you answer her question?

An increase in income and expenses

John's job provided the main income for his family. He died unexpectedly and had no life insurance. The probable financial consequence for his wife and two children does not include:

establishing a fund for emergencies.

Julian is a single and recent college graduate who just got his first full-time job. Which of the following should be his first financial goal?

Rent a safe deposit box for their valuables

Margaret wants to store a valuable coin collection and important papers. Generally, consumers should:

Capital losses from the sale of stock

Money for saving, investing, or spending cannot be from:

deposit at least $100,000 in a retirement account.

One example of a long-term retirement goal is to

capital gains on the investment will be taxed at a lower rate.

One of the benefits of holding an investment for over a year rather than selling it in less than a year is that the

the basic principles that guide our actions and beliefs.

Our values are:

A check

Patty is selling her car through a newspaper advertisement. When she finds a buyer, she wants a form of payment which is guaranteed to be good. Which form of payment should she avoid?

A loan that you can afford with an interest rate that is the same as the interest rate being charged by at least three other financial institutions.

Predatory lending practices do not include which of the following:

Safe and can be accessed only by the owner of the box.

Safe-deposit boxes are:

Use a random selection of letters and numbers

Scott just got an ATM card to use and must choose a PIN (Personal Identification Number). How should he select a PIN that will give him maximum protection against anyone else being able to find out what the PIN is?

Diversification

Spreading one's assets across several types of saving and investment products to manage risk is called:

They are open accounts that she could use, will be considered in any application for credit, and could make it difficult for her to get a loan or mortgage.

Stephanie has several open department store credit charge cards that she has not used in two years. There are no credit balances on any of the accounts. The effect these charge cards may have on her application for a loan or mortgage is:

No bank or government agency is obligated to reimburse Susan because she authorized Marie to use her ATM card and PIN

Susan gives Marie her ABC Credit Union debit card and personal identification number (PIN) so Marie could get $25 from Susan's bank account. Marie withdrew $100 instead of the agreed to $25. How can Susan get the $75 back?

Calculate how fast your savings will double in value at given interest rates

The "Rule of 72" is an easy way to:

Finance charge

The amount a lender charges to borrow money is called the:

The true cost of credit that must be disclosed on a loan agreement

The annual percentage rate (APR) is:

Green backs

The common name for U.S. currency is:

exempt from state and local taxes.

The interest earned on United States Series EE Savings Bonds is

Making a deposit

The phrase used for putting money into a savings account is:

Current events

The price of a security may be affected by:

Salaries, wages, and tips

The primary sources of income for most people between the ages of 20 and 35 who are not living on a pension or social security are:

Received today is worth more than the same amount of money received in the future

The time value of money refers to the concept that money:

the rate of inflation.

To determine the time value of depositing $100 in a savings account, a person needs to know the interest rate and

fulfill income guidelines.

To qualify for a Federal Housing Administration (FHA) loan, a person must generally...

Fulfill income guidelines.

To qualify for a Federal Housing Administration (FHA) loan, a person must generally:

A savings plan

Troy has $50 a month transferred electronically from his checking account to his savings account. This is an example of:

brokerage firm is lending the investor 50% of the money.

Using a brokerage firm, a qualified investor buys 1000 shares of a common stock at $50 a share on 50% margin. This means that the

A number used to determine how much credit to extend to a person.

What is a credit score?

A personal loan without assets to cover the loan amount.

What is meant by an uncollateralized loan?

New York Stock Exchange (NYSE)

What is the largest equities market in the world?

Notify the lending institution about state usury laws.

What should a person do when he believes he is being charged too high a rate of interest for a loan by a lending institution?

They typically charge high fees.

When James received his paycheck, he planned to cash it at a check cashing store. You advise him to cash it at his own bank if possible. Why?

A Collateralized loan.

When a person brings an item to a pawnshop to obtain cash, the transaction is considered:

For a 10 year period.

When a person declares bankruptcy, that fact will appear on the person's credit report

Retirement and health plans

When deciding between two job offers with a similar salary offer, a person should first consider:

Barter

When money is not used and goods and services are exchanged for other goods and services, this system is called:

Mortgage loan papers.

Which documents should be stored in a safe-deposit box?

Late payments.

Which factor would most likely lead to an increase the interest rate on a person's credit card?

Series EE savings bond

Which financial product can you buy for $25, is safe, and will be worth $50 at a future date?

Certificate of deposit

Which financial product has the most predictable income?

Certificate of deposit

Which financial product typically pays the highest rate of interest?

Monetary policy.

Which of the following does the Federal Reserve use to regulate the nation's money supply?

Automobile

Which of the following insurance covers vehicles?

They expose consumers to greater likelihood of identity theft.

Which of the following is a disadvantage of using phone cards, debit cards, electronic transfers, and ATM cards?

Department store charge cards.

Which of the following is considered to be open-end credit?

The ability to adjust spending to money available.

Which of the following is necessary for successful budgeting?

Truth in Lending Act

Which of the following is the federal law that requires the cost of credit be disclosed to consumers in bold print on loan agreement?

Pawn Shop

Which of the following lenders charge the highest interest rate?

Having capital gains

Which of the following provides an increase in assets or wealth?

A person with a professional degree is likely to earn at least four times as much per year as a person who did not complete high school

Which statement best describes the relationship between a person's educational level and that person's potential earning power?

Policy that accumulates cash value is less expensive than a policy that does not accumulate cash value

Which statement does NOT accurately describe a characteristic of cash value for whole life insurance?

Credit unions

Which type of financial institution usually pays the highest rate of interest on savings account balances?

Long-term fixed rate borrowers

Who benefits the most from inflation?

To raise money for expansion or other company operations

Why does a corporation issue bonds?

a bank

You can set up an Individual Retirement Account at:

Added to your credit card bill and you pay for it at a later date.

You used your credit card to buy flowers at the florist. The dollar amount of the purchase was: