Wise Test Review

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?

"I think I need a personal property floater."

A woman is offered two jobs; one with a salary of $27,000 plus benefits and the other at $30,000 with no benefits. It would be a wise financial decision for her to take the:

$27,000 job, if the benefits package is worth more than the $3,000 difference in salary

If you have a $500 deductible on your car insurance and you have a wreck that causes $4,000 in damage to your car, how much will the insurance company pay?

$3,500

If you have 10 shares of stock with one company and they are paying a declared dividend of $3, you will earn:

$30

If a person has a credit score of 780, he/she is more likely to

Be charged a lower interest rate for a loan

How can you protect yourself against credit card fraud?

Be extremely careful about disclosing account information to unsolicited callers.

In order to live on a monthly budget, a person should

Be responsible and use restraint

Claire wants to cancel her USA credit card. The best method is to dispose of her USA credit card is to:

Cut up the card, put parts in different garbage bags, and instruct the credit card company in writing or by phone to close the account

Mr. Akon's wife died. The money he received as the beneficiary on her life insurance is called the:

Death benefit or face value

Sally took out a $50,000 life insurance policy. The $50,000 amount of coverage is called the:

Death benefit or face value

Collateral is:

Something of value that secures a loan to protect the lender

The only type of life insurance that does not develop a cash value is:

Term life insurance

When does a student need to file the FAFSA?

every year of college attendance

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

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

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

a collateralized loan.

What does the phrase, "pay yourself first," mean?

set aside money for savings each month BEFORE paying any other bills

To AVOID being charged a late fee on a credit card bill, a person must pay the payment:

so that the payment is received by the credit card company on or before the due date

Which of the following is an example of a typical deduction taken out of your gross pay?

state and federal income taxes, social security tax, and health insurance premium

When making a list of his assets, a person should include:

stocks

Oliver wants to pursue a certificate program in Sports Nutrition. To pay for the course, he borrows money by filing the FAFSA. This is called a ______________ _____________.

student loan

Which two forms of financial aid require the student to bear the costs of college education?

direct loans and work-study programs

One responsibility of the Federal Reserve System (FED) is to:

directly influence interest rates charged by banks

Which of the following is an advantage of a Roth IRA?

earnings are tax free

Discretionary income is:

money left after paying the essential bills

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

10 years

A person who wants to begin investing part of his salary for retirement should ask his employer if the company has a:

401(k) plan

If you have been denied credit, a job, a license, an insurance policy, or a loan based on your credit report. You are entitled to receive a free copy of that credit report within how many days of denial?

60 days

What is meant by an uncollateralized loan

A personal loan without assets to cover the loan amount.

If a person decides to lend money to a friend, it is strongly advised that the person lending the money

Ask the borrower to sign an agreement explaining the terms of the loan

Which of the following is considered to be open-ended?

Department store charge cards.

The purpose of Insurance is NOT to:

Diversify an investment portfolio

The cost of borrowing money is commonly referred to as the

Interest rate

Distinguish between the features and benefits of getting a student loan. Select all that apply.

It becomes a part of a person's credit history and it's borrowed money that has to be repaid.

Distinguish between the features and benefits of getting a grant or scholarship. Select all that apply.

It's given based on a student's financial need as well as academic achievements. And it's given based mainly on a student's financial need.

John puts $10,000 down payment on a $100,000 home. Jane puts $20,000 down payment on a $100,000 home. They both have 20-year mortgages at the same fixed-interest rate. Which is a true statement about their mortgages?

Jane's payment will be lower than John's

Jenna wants to apply for student aid to pay for her college education. Jenna obtains an FSA ID. What is her next step?

Jenna fills out the FAFSA online.

Jenna wants to apply for student aid to pay for her college education. Colleges ask Jenna to verify the information in the FAFSA. What is her next step?

Jenna receives financial aid award letters from various colleges.

Jenna wants to apply for student aid to pay for her college education. Jenna received her Student Aid Report. What is her next step?

Jenna rechecks the information she provided and makes a few corrections.

Lucy has no insurance. The situation(s) should she consider insuring against first are:

Losses resulting from an illness, accident, or disability

A person who has a car can AVOID having the car repossessed by

Making payments in full by the due date

A person has three credit cards is unable to make payments on any of them. Which action should the person take?

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

Which of the following government offices help individuals fund their college education?

Office of Federal Student Aid

Dawn graduated from high school and wants to get a credit card. How can Dawn establish credit-worthiness?

Opening a checking account, making regular deposits, and avoiding penalties for insufficient funds

A person wrote a check for $800 but only had a balance of $700 in their checking account. The most likely reason the check did not bounce is because he/she has

Overdraft Protection

Harry comes from a low-income household. He wants to pursue an undergraduate degree in Marketing. He receives financial aid covering 50 percent of his college expenses. Harry does not have to pay back this amount. This is called a ______________ _____________.

Pell Grant

You should never write a check payable to "cash" because:

anyone can cash the check

Why should you never sign a blank check?

anyone can fill out the check for any payee and for any amount

You are behind on your debt payments and go to a Consumer Credit Counseling Service. How can they help you?

They can work with those who loaned you money to set up a repayment schedule you can afford to make.

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?

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

Sometimes a vendor or creditor may ask you to pay a bill with a certified check; you will have to get a certified check from your local:

bank or credit union

When you receive an inheritance or money from a life insurance policy you are the:

beneficiary

Which of the following is considered a source of personal income?

capital gains from the sale of stock or real estate

When a college requires that students pay their application fees with money orders, it also benefits students because:

cash can get lost or stolen in the mail

You've written a check for your power bill and realize you've lost it before even getting it in the mail; if you place a stop payment on the check, you can expect your bank to:

charge a minimum fee for the stop payment

An advantage of requesting a free annual credit report is that the person can

check the report for errors

A measure of a person's ability and willingness to pay debts on time.

credit rating (score)

someone who borrows money or uses credit

debtor

Kimberley got a student loan to pay for her computer science degree. Kimberley lost her job and was unable to pay back her loan. This is called _______________.

default

CD's (certificates of deposit) do not require a minimum deposit

false

What is the advantage of having your paycheck electronically deposited?

fast, efficient and guaranteed deposit on your designated payday

Which is the main factor taken into consideration during distribution of grants and loans among eligible students?

financial need

What should a person do when they receive a store gift card?

find out if the store is allowed to reduce the value of the store gift card for any reason

Julie is using a federal direct student loan to pay for college. She is a sophomore and her college closed down due to financial difficulties. Julie doesn't have to pay back her loan. This is called _______________.

forgiveness

High interest rate loans are usually given to persons who:

have a poor credit score

Car insurance companies are likely to place drivers in the "assigned risk pool" if they:

have had several recent accidents

A person buys a homeowner's insurance policy with a $250 deductible, which means the person will

have to pay the first $250 which will be deducted from the claim settlement paid by the insurance company.

A recent high school graduate was denied $5,000 car loan. The graduate has a better chance of being approved for a loan by:

having a person with a good credit score cosign for the loan

Which of the following statements is true about a person who owns real estate, bonds and stocks and has a savings account?

he has a diversified financial portfolio

A person uses his credit card to obtain a cash advance. The interest charge on the amount of the cash advance is likely to be:

higher than the card's interest rate on the unpaid balances

When you use your debit card to make a purchase, when does the money come out of your account?

immediately

If you and your spouse have another baby, how can you increase your net pay?

increase the exemptions on your W-4

loans that are repaid in regular payments over a period of time

installment loans

Why does a corporation issue bonds to the public?

it wants to borrow money and is willing to pay interest on the loan

Generally, a student who drops out of high school without graduating and who does NOT get additional training or education is:

likely to have fewer job opportunities than a high school graduate

Banks play an important role in the United States economy by:

making loans to businesses

The New York Stock Exchange (NYSE) is a:

marketplace where stocks are bought and sold

In a managed health care insurance plan, such as health maintenance organization (HMO), the individual member receives:

medical treatment of a specified co-payment

Money in the form of cash or currency acts as a:

medium of exchange

Lewis is one of the leading college basketball players in the state of Hawaii. He also maintains a good academic record. Looking at his talent and potential, Loyola University of Chicago offers to bear the expenses for his college education. This is called a ______________ _____________.

merit-based scholarship

When making a list of your liabilities a person should include:

mortgage loan

A budget should include a person's:

net income and expenses

A person has been hired for a job that pays $300 a week. When the person receives her paycheck, it is for $270. This paycheck is the person's:

net pay

To control his spending, a man withdraws $20 from his checking account three times a week using the ATM at his bank. Therefore, this man should expect to pay:

no fee for the withdrawals since they all took place at his bank

A college student is planning to take a student loan from the government; payments on most of these loans are:

not due until after the student leaves school or graduates

Why must you show identification now when you open a bank account?

now required by law

A benefit of buying term life insurance as opposed to whole life insurance is that term insurance usually:

offers a greater amount of insurance coverage for a specific period of time at a lower cost

Joshua needs help repaying the loan he got to pursue a graduate program in a top-ranking university. If Joshua opts for a work-study program, he will get a ______________ job. But first, Joshua needs to check if his college participates in the ____________ _____________ ________________.

part-time, Federal Work-Study Program

When a self-employed person decides to purchase disability insurance it is generally to

protect against the financial effects of not being able to work.

If you make a cash deposit for $10,000 or more in your bank account, your bank is obligated to notify:

the US Treasury Dept.

Even though the United States is becoming a "cashless society", it is still important to have some cash at home because:

the money can be used if ATM's become disabled during a disaster

The federal government created the FDIC to protect:

their bank deposits up to $250,000

Why does the US Treasury change the currency format from time to time?

to help cut down on sophisticated counterfeiting

A good credit score is 780 and above

true

High interest rate loans are typically given to people with a poor credit score

true

One good reason to use a credit card is to build credit history

true

Which three of the following expenses can student aid cover?

tuition, school supplies, and boarding/housing

If a person has a $1,000 line of credit, the person can charge:

up to $1,000 on the credit card

The $25,000 that a person won on a TV game show is considered

windfall income

When you make an ATM withdrawal, when does the money come out of your account?

within 48 hrs

Shelley is studying for a marketing degree. She works for professors, setting up their web pages. Shelley earns $5,000 per year from this job. She uses it to pay for some educational expenses. This is called _______________.

work-study