Final Exam

Jasmine just received her paycheck. To manage her money, she categorizes spending by needs, wants, and savings and debt. What money management strategy is Jasmine following? a) 50-30-20 rule b) the envelope method c) managing money d) pay yourself first

a) 50-30-20 rule

In the 50-30-20 Rule, 50% of your income should be spent on _____________. a) Needs b) Debt c) Savings d) Wants

a) Needs

Which of these factors may make you more competitive in the job market? a) Being under 18 b) Having a higher education degree c) Living in a rural area d) Living in your own apartment

b) Having a higher education degree

Alejandro realized that he forgot his wallet when he was about to pay at a store. He only has his smartphone with him. How can he make a payment with money from his checking account? a) He can write a check with his mobile banking app. b) He can use a mobile payment app with his phone. c) He can send his checking account number via text d) He can show a picture of his debit card in his phone.

b) He can use a mobile payment app with his phone.

What should be prioritized when creating a budget? a) Future earnings b) Needs and wants c) Career path d) Credit report

b) Needs and wants

Which of these is something to consider when trying to get a positive return on investment for higher education? a) The cost of a meal plan b) The total cost of attendance c) The cost of tuition d) The cost of books

b) The total cost of attendance

Lilly wants to save money for unexpected situations like emergencies. Which savings feature would benefit her the most? a) earning the highest interest rate b) easy access to her money c) mobile banking alerts d) no banking fees

b) easy access to her money

Jobs and careers that require degrees or certificates generally __________ jobs that require little or no training. a) pay about the same amount of money as b) pay more money than c) have fewer responsibilities than d) earn less money than

b) pay more money than

If your earnings potential is higher than the cost of your higher education, you will have a __________. a) negative return on investment for higher education b) positive return on investment for higher education c) neutral return on investment for higher education d) positive return on investment, depending on your major

b) positive return on investment for higher education

A positive return on investment for education happens when __________. a) you calculate earnings after working for one year after college b) your earnings potential is higher than the cost of your education c) you attend a public university and do not take out loans d) you use federal student loans to attend a private college

b) your earnings potential is higher than the cost of your education

Which of the following best describes a loan? a) A government grant for education b) A type of insurance coverage for unexpected losses c) A borrower promises to repay money from a lender d) A tax deduction for mortgage interest payments

c) A borrower promises to repay money from a lender

How is money divided using the 50-30-20 Method? a) Savings, expenses, emergencies b) Needs, stocks, bonds c) Needs, wants, savings d) Wants, needs, retirement

c) Needs, wants, savings

Which review of an online clothing store is more trustworthy and why? Review A states: "All 5 of the shirts were high quality but small. Order a size up" (verified purchase). Review B states: "I love everything from this site. Don't miss out on their great sales" (sponsored review). a) Review B is more trustworthy because they let you know about sales that can save you money. b) Review A is more trustworthy because they gave more details about their purchase. c) Review A is more trustworthy because it was a verified purchase. d) Review B is more trustworthy because the company spent money paying them to leave a review.

c) Review A is more trustworthy because it was a verified purchase.

Elliott renovates his home using a loan that requires him to sign over the title to his car if he doesn't pay as promised. What type of loan does Elliott have? a) Interest-free loan b) Education loan c) Secured loan d) Unsecured loan

c) Secured loan

Which list describes needs? a) Entertainment, electronics, food b) Warmth, entertainment, shelter c) Shelter, warmth, food d) Electronics, food, shelter

c) Shelter, warmth, food

Which of the following items describe features of a checking account? a) credit card b) high fees c) debit card d) high interest

c) debit card

Using your mobile banking app, you can ________. a) deposit cash b) write checks c) deposit checks d) withdraw cash

c) deposit checks

To deposit a check using a mobile banking app, you have to __________. a) have more than one account b) check your interest rate c) upload pictures of your signed check d) mail the check to your financial institution

c) upload pictures of your signed check

Which best describes the difference between secured and unsecured loans? a) Secured loans have more flexible payment plans than unsecured loans b) Secured loans usually have higher interest rates than unsecured loans c) Secured loans do not appear on your credit report, while unsecured are reported d) Secured loans require collateral, while unsecured loans do not

d) Secured loans require collateral, while unsecured loans do not

Marcus is a high school senior in Atlanta. He plays baseball and is president of the mock trial club. He would like to major in political science in college and become a lawyer. Which of these scholarships would he be qualified to apply for? a) American Bar Association law scholarship b) City of Atlanta basketball scholarship c) Teach for America student scholarship d) Literary Bard Society student scholarship

a) American Bar Association law scholarship

Which of the following is accurate about the benefits and risks of using credit cards to make purchases? a) Credit cards come with fraud protection, but credit card numbers can be copied by identity thieves. b) While credit cards are accepted almost everywhere, they put you at higher risk of being overcharged at the cash register. c) Credit cards allow you to pay for items later, but may cause you to miss out on better deals. d) Credit cards allow you to spend as much as you want, but are not accepted for most transactions.

a) Credit cards come with fraud protection, but credit card numbers can be copied by identity thieves.

Tarik works in a restaurant and gets paid in cash. He's used to dealing in cash, but he needs a system to help him physically divide his cash each month. What money management strategy should Tarik use? a) Envelope Method b) 50-30-20 Method c) Investing in stocks d) Avoiding debt

a) Envelope Method

Emery applies for a loan online to help cover living costs while in college. Later, she notices her payments aren't impacting the balance much. Looking closer, she finds extra fees in the agreement. Which type of predatory loan offer did Emery experience? a) Hidden fees b) Bait and switch c) Payday loan d) Phishing scam

a) Hidden fees

Rosa is getting ready to fill out the FAFSA. Which of these documents will she need to fill it out? a) Individual tax returns b) High school transcript c) Driving record d) Most recent pay slip

a) Individual tax returns

Your favorite cousin Briar's birthday is coming up, and you'd like to gift her some money from your checking account. What is the benefit of gifting money via check? a) It is safer because you can trace the transaction. b) It is better because you get to earn interest. c) It is faster because money will be available instantly. d) It is cheaper because it has a flat fee per transaction.

a) It is safer because you can trace the transaction.

Carlos wants to start a budget. He is planning on using the 50/30/20 method. He's categorizing his expenses. How should he categorize paying his insurance? a) Needs b) Wants c) Savings d) Debt

a) Needs

A lender offers Frank a high-interest loan based on how much he makes at his job. He'll have to pay it back quickly too, within the next month. Which type of predatory loan offer did Frank experience? a) Payday loan b) Bait and switch c) Hidden fees d) Phishing scam

a) Payday loan

What can a budget help you do? a) Prioritize expenses and track spending b) Track spending and increase your income c) Use credit and prioritize expenses d) Increase your income and use credit

a) Prioritize expenses and track spending

What type of car insurance would you need to use if you damaged part of your neighbor's house in a car accident? a) Property damage liability b) Comprehensive insurance c) Bodily injury liability d) Collision insurance

a) Property damage liability

Which is a good way to make an informed decision about a purchase? a) Read reviews from other consumers b) Read the product descriptions online c) Buy the lowest priced item d) Buy the highest priced item

a) Read reviews from other consumers

Which of the following are things a skilled consumer does? a) Research before buying, buy only what you need, consider unit prices, choose the best payment method b) Research before buying, buy only from clearance sales, avoid using credit, consider unit prices c) Buy only what you need, shop locally, avoid using credit, buy only from clearance sales. d) Buy only from clearance sales, pay in cash, consider unit prices, buy only local goods.

a) Research before buying, buy only what you need, consider unit prices, choose the best payment method

Camilla just opened a new checking account. How can it help her better manage her money? a) She can check her transaction history easily. b) She can get a greater investment return. c) She can earn more interest to save money. d) She can borrow money and pay it back over time.

a) She can check her transaction history easily.

A 10-ounce bottle of your favorite lotion that you use each day costs $9.50. The 5-ounce bottle only costs $5. Which is the better deal and why? a) The 10-ounce bottle is a better deal because the price per unit is lower. b) The 5-ounce bottle is a better deal because it costs less. c) The 5-ounce bottle is a better deal because you don't need that much. d) The 10-ounce bottle is a better deal because you use it everyday.

a) The 10-ounce bottle is a better deal because the price per unit is lower.

Why should you work to be an informed consumer? a) To get the most value for your money b) To stay informed about trends c) To ensure you pay the right sales tax d) To spend the least amount of money

a) To get the most value for your money

Why do financial institutions offer you higher interest rates for Certificates of Deposit (CDs)? a) You must keep your money in the account for a set amount of time. b) They are paying you back for fees and interest that you have prepaid. c) The interest you earn is only borrowed and must be repaid at the end of the term. d) You'll be required to invest your interest funds with the same institution.

a) You must keep your money in the account for a set amount of time.

Meri's roof was recently damaged by a hurricane. Luckily, she has homeowners insurance, and files a claim that gets approved. What will this insurance help her do? a) Her homeowners insurance will help her start a neighborhood clean up project. b) Her homeowners insurance will help her pay the costs of her roof repair. c) Her homeowners insurance will help cover any damage to her car. d) Her homeowners insurance will pay 70 percent of her salary for up to 6 months.

b) Her homeowners insurance will help her pay the costs of her roof repair.

Anthony caused a minor accident when he hit another car. Anthony's insurance company said that he needed to pay $500 before they could pay the claim. What does the $500 most likely refer to in this insurance policy? a) His comprehensive insurance b) His auto insurance deductible c) His homeowners insurance d) His health care copay

b) His auto insurance deductible

What is the benefit of a checking account? a) It allows you to save money and earn interest. b) It helps you spend money without carrying cash. c) It allows you to spend money and pay the bill later. d) It helps you invest money and gain a greater return.

b) It helps you spend money without carrying cash.

What does "pay yourself first" mean? a) Pay down debt before doing any spending b) Put money in your savings account before you pay other expenses c) Split your money according to how much you want to spend on each bill or expense d) Spend your money on your wants before you spend on your needs

b) Put money in your savings account before you pay other expenses

How do loan terms affect the cost of credit? a) Longer loan terms have lower monthly payments and lower interest b) Shorter loan terms have higher monthly payments and lower overall interest c) Loan terms are based on your pay schedule and how often you get paychecks d) Loan terms only apply to loans with collateral but do not apply to those without collateral

b) Shorter loan terms have higher monthly payments and lower overall interest

When do you need to apply for the Free Application for Federal Student Aid (FAFSA)? a) Two years before college and every year you attend b) Once, after you have been accepted into college c) The year before college and every year you attend d) Once, after you have completed your first semester

c) The year before college and every year you attend

What is the main purpose of having auto insurance? a) To get out of paying any money out of pocket in case you get in an accident b) To be able to legally drive a car with other passengers across the U.S. c) To protect yourself against unintentional costs and financial losses d) To elect a cost saving premium so you can save the most amount on your policy

c) To protect yourself against unintentional costs and financial losses

What is the main benefit of taking out a federal student loan instead of a private loan? a) You can defer paying your loan until 5 years after graduation. b) You will have a higher interest rate for a federal student loan. c) You may qualify for loan forgiveness after you graduate. d) You can pay the principal down faster on a federal student loan.

c) You may qualify for loan forgiveness after you graduate.

The total cost of attending a university includes __________. a) tuition, scholarships, grants, and loans b) student loans and federal grants c) tuition, housing, food, books, and other costs d) scholarships, grants, and other forms of financial aid

c) tuition, housing, food, books, and other costs

Overdraft protection helps you cover a purchase in your checking account __________. a) only if you are investing with your money b) when you lost your debit card c) when you don't have enough funds d) only if you are paying with a mobile payment app

c) when you don't have enough funds

What is the benefit of a savings account? a) A savings account allows you to borrow money. b) A savings account helps you track your spending. c) A savings account creates investment opportunities. d) A savings account earns interest.

d) A savings account earns interest.

How can a budget help you reach your financial goals? a) Budgeting allows you to earn more money over time. b) Budgeting reduces credit card interest rates. c) Budgeting can help you make smart investments. d) Budgeting helps track spending and increases savings.

d) Budgeting helps track spending and increases savings.

Which of these places would be a good place to look for a scholarship? a) Online job board b) State capital c) Court house d) College website

d) College website

Which type of financial aid is considered free money? a) Work-Study programs b) Federal student loans c) ROTC d) Grants

d) Grants

Margo wants to purchase a new car. She doesn't have enough in savings to cover the cost. She decides to look into loans from her bank. How can taking out a loan help Margo with her car purchase? a) It can help by having no impact to her credit score b) It can help by reducing her total amount of debt c) It can help by not requiring any immediate down payment d) It can help by spreading out the expense over time

d) It can help by spreading out the expense over time

Aisha needs a loan to finance her latest startup. She wants a loan with the lowest overall interest costs. She's considering a 3-year loan with an 8% fixed interest rate or a 5-year loan with a 6% fixed interest rate. Why would Aisha pick the 3-year loan? a) It has a higher loan amount. b) It has a smaller monthly payment. c) It has a lower interest rate. d) It has a lower total cost.

d) It has a lower total cost.

Louie just opened his first savings account. What is one way that it can it help him manage his money? a) It can loan him money to pay back over time. b) It can give him access to a debit card. c) It can help him spend money more easily d) It will keep his money safe.

d) It will keep his money safe.

What is withholding tax? a) Money that the employee receives after deductions are taken out of a paycheck b) Money that is used to pay for an employee's health insurance benefits. c) Money that is used to contribute to an employee's retirement 401(k) plan. d) Money an employer deducts from an employee's wages to pay to the government.

d) Money an employer deducts from an employee's wages to pay to the government.

What is a risk of using cash? a) Paying interest on purchases b) Paying more for purchases c) Not being able to shop in stores d) Not having fraud protection

d) Not having fraud protection

Keira is new to earning money and saving. She doesn't have a lot of money to open an account. Which savings option would be best for her? a) Checking Account b) Money Market Account (MMA) c) Certificate of Deposit (CD) d) Savings Account

d) Savings Account

Zack is 25, lives alone in an apartment, and works as a freelance developer. Why should he consider purchasing short-term disability insurance? a) So he will have rental reimbursement coverage in case he can no longer afford his apartment b) So he will not have to purchase additional health insurance for work related injuries c) So he will not have to increase his life insurance coverage over the next 10 years d) So he will have monetary protection in case he is unable to work due to illness or injury

d) So he will have monetary protection in case he is unable to work due to illness or injury

Alida works from home. Which item is a want for her? a) Cell phone b) Internet c) Groceries d) Streaming service

d) Streaming service

Carol became an accountant by starting her training at a community college, followed by transferring to a bachelor's degree program at her local public university. How likely is it that she will have a positive ROI? a) Not at all likely, because she is not in a profitable career field. b) Very likely, because attending college guarantees a job after graduation. c) Not at all likely, because she did not attend a four year college for all four years. d) Very likely, because she spent less money the first two years of college and is currently employed.

d) Very likely, because she spent less money the first two years of college and is currently employed.

What would happen if your car were stolen and you didn't have auto insurance? a) You would not be required to pay the remainder of your car loan. b) Your car loan institution would be responsible for replacing your car. c) The car dealership where you purchased your car would replace it. d) You would still have to pay off your car loan in full

d) You would still have to pay off your car loan in full

Dominic has four unexpected expenses, including a broken TV, increased insurance costs, a broken down car, and a hole in a shoe. Which of these expenses would be considered an emergency? a) new shoes b) television c) insurance d) car repairs

d) car repairs