All Personal Finance Exit Ticket Questions & Answers
Keon receives a $1,000 paycheck. According to the 50/30/20 rule, how much should he put aside for saving?
$200
Antonio has $4000 saved to use for a down payment, and he's about to buy a car that costs $29,000. How much would you expect his loan principal to be?
$25,000
How much money should you try to save in your emergency fund?
3-6 months worth of expenses
All of the following people can be claimed as a dependent for tax purposes EXCEPT...
A 20 year old college student with a paid internship who pays for all of their own expenses
One difference between bonds and bond funds is...
A bond fund can help you diversify your investment portfolio
Which of the following most accurately describes what a bond is?
A bond is an investment in which an investor lends money to a corporation or government with the expectation that it will be paid back with interest
Which statement best describes discretionary government spending?
A changing amount of money spent on different categories each year
Shonda's mom recommends that she spend a year building her credit history and boosting her credit score before she applies for a loan to buy her dream car, which costs $54,000. Why is that good advice?
A good credit score will reduce her interest rate
What is a stock?
An investment option that allows you to own a small piece of a company
Which of the following is a type of secured debt in which the item you purchased might be seized if you fail to make payments?
Auto loan
What does it mean to "pay yourself first?"
Auto-deposit a set amount of money into savings after each paycheck so that you don't spend all your income
All of the following are ways that you can keep your online bank account safe EXCEPT...
Banking with small banks and credit unions because they are less frequently the target of fraud
Which statement is true of both debit AND credit cards?
Both allow you to make purchases in a store or online
Which of the following statements BEST describes the stock market?
Businesses selling partial ownership of their companies to raise capital
All of the following purchases can be impacted by your credit report EXCEPT...
Buying a TV with cash
One difference between a checking account and a savings account is that...
Checking account balances will typically change frequently
Ben and Jose just graduated from high school and are entering the workforce. They want to share a 2 bedroom apartment and are at the very start of their apartment search. Which of the following steps should they take NEXT?
Compare their budgets to the cost of living of different areas they're interested in
What should you do if you find errors in your credit report?
Contact the credit reporting agency or the company that provided the information
Each of the following represents an installment loan EXCEPT...
Credit card
Which of the following is a recurring expense?
Daily Starbucks Latte
Tyreke has $5,000 to put into an account that earns compound interest. Which of the following is the BEST advice you can offer so that he can maximize interest?
Deposit your money as early as possible in an account with the highest interest rate possible
One way to cut down on expenses associated with renting is to...
Do market research to understand what typical rents look like in the area
Each of these coverage areas is part of a standard renters insurance policy EXCEPT for...
Dwelling
It's time for Roxanne to start repaying her student loans, which are amortized over the next ten years. Her first month's payment due is $396. How much should she expect to pay next month?
Exactly $396
Each of the following is an advantage of signing up for an individual health insurance plan on the marketplace EXCEPT...
Guaranteed pricing below that of an employer-sponsored health plan
Which of the following is an example of online bill pay?
Having your bank send your rent to the landlord each month
Jane needs a cosigner for her loan. Which person would be the best for her to ask to be her cosigner?
Her sister, who shows her she has a credit score of 735
If you drive a fancy car a lot of miles each month, your premiums will likely be...
Higher than expected compared to another driver with the same driving record but a cheaper car
All of the following are strategies to reduce risk EXCEPT...
Hiring an investment manager who you think can beat the market
How does the interest rate on a loan compare for someone with excellent credit compared to someone with poor credit?
Interest rates are lower for someone with excellent credit
401(k)s and IRAs are both...
Investment accounts that you can open to help you invest for retirement
What is the main difference between investors and traders?
Investors focus on long-term growth while traders aim for short-term gains
Which of the following statements most accurately describes why it's important to correctly fill out a W-4 form?
It determines how much money is withheld from your paycheck and can result in under or overpayment of taxes if filled out incorrectly
What is a major benefit of the Pay Yourself First strategy?
It encourages you to prioritize saving money
Which of the following statements about the W-2 form is TRUE?
It identifies how much was withheld in taxes.
All of the following statements about using tax filing software are true EXCEPT...
It is best to use if you have a major life event, such as marriage, divorce, buying or selling a house.
Leaving your investments in the stock market alone for at least five years is a good way to reduce risk because...
It keeps you from reacting to dips in the market and selling at too low of a price
It's beneficial to use some of your available credit because...
It shows you can responsibly use credit and builds your credit history
Karishma has a renters insurance policy with a coverage limit of $25,000. While she's on vacation a fire breaks out, ruining $9,000 worth of possessions before the fire department puts it out. Her deductible is $500. How much will Karishma and the insurance company each pay?
Karishma pays $500, while the insurance company pays $8,500
It is best to avoid these in order to improve your payment history...
Late payments
Ralph has a shiny new car, and he wants to make sure the insurance company will help him fix or replace it in case of any type of damage. Each of these coverage areas will provide the type of coverage he's looking for on his car EXCEPT...
Liability
Which of the following is the LEAST LIKELY health insurance plan for a 15-year-old child to be enrolled in?
Medicare
During a BULL market...
More investors are buying stocks, which causes stock values to increase
On a pay stub, the amount of money that is left after withholdings is known as...
Net Pay
Which of the following is a characteristic of a brokerage account?
No penalties for withdrawing your money
You were unable to file your taxes before the April deadline and your application for an extension was approved. What month was your deadline extended to?
October
All of the following are ways that you could potentially avoid a monthly maintenance fee on your account EXCEPT...
Only banking online instead of using physical bank locations
If you buy a $1000 bicycle, which credit card payoff strategy will result in your paying the LEAST total amount?
Pay $250 per month until it's paid off
All of the following are ways you can save money at the grocery store EXCEPT...
Pay someone to do your grocery shopping so you don't make unnecessary purchases
Which of the following categories make up most of your credit score?
Payment history and credit utilization
Which word represents the total cost of the item you're purchasing on credit minus any down payment you make upfront?
Principal
Which of the following is the term for a tax rate that increases at higher levels of income?
Progressive Tax
Which of the following is an example of diversification?
Purchasing shares of stock in a variety of companies and industries
Why is risk pooling essential for the insurance industry to exist?
Risk pooling creates large groups to spread the risk level out while maximizing the amount of premiums that can be collected
All of the following are reasons to open a checking account EXCEPT...
Saving money for retirement
Joanne is buying a new car and her monthly payment is $320. She allocates $350/month towards auto-related costs. What mistake is Joanne making when creating her auto budget?
She is not accounting for the cost of fuel, insurance, maintenance, and other potential expenses beyond her car payment
If a person with multiple sources of debt has a goal of eliminating one or more of them in as little time as possible, which debt repayment strategy would be best?
Snowball Method
Which of the following are two mandatory categories of government spending that are paid for by FICA taxes?
Social Security and Medicare
Which of the following is TRUE about a stock split?
Stock splits make a stock more accessible to a greater number of investors
Djamila is using the envelope budgeting method. She wants to go out with friends to eat and opens her Restaurant envelope to find that it only has $5 left in it. What budgeting advice would you give to her?
Suggest other options to her friends that don't involve going out to eat
Andrew has a car and is moving to the city for his new job. Which of the following actions would be the MOST effective way for him to decrease his transportation costs?
Switching to public transportation or biking for his daily commute
If you were offered two auto loan options with the same principal and interest rate, but one was a 48-month loan and one was a 72-month loan, which outcome below will reflect the impact of that difference in term?
The 48-month loan will cost less money overall
As you move through your payment schedule on an amortized loan, what will happen to the interest portion of each month's payment?
The interest portion will shrink
When reading a stock quote, which of the following metrics would give you the best idea of the total value of the company?
The market cap
Juan buys a bond with a fixed coupon rate of 3%. Six months later, similar bonds that are issued have a coupon rate of 4%. Which of the following is TRUE if he chooses to sell the bond before maturity?
The price of Juan's bond will decrease
What does it mean if a person chooses to enroll in employer-sponsored health insurance?
Their employer will offer a specific plan or plans the employee can access, and the employer will pay at least half of the cost
Piper is willing to pay a high premium for their disability insurance. What are the likely outcomes of paying that higher premium?
They receive a low deductible and a high coverage limit
You're debating whether to buy a trendy fall jacket that costs a whopping $200! You have it sitting in your online cart, and you see there's a "Buy Now, Pay Later" option available for the jacket. Which best describes an example of how that would work?
They ship you the jacket now, and you owe four $50 payments, once every 2 weeks, until the jacket is paid in full
In general, why do so many different types of companies check your credit report?
They want to make sure you're likely to make consistent and timely payments
What is the purpose of the self-employment tax (SECA)?
To tax self-employed individuals an equivalent amount for Social Security and Medicare since FICA taxes aren't taken out of their paycheck
Which type of retirement account is an investment option for ANY young person?
Traditional IRA
All of the following are recommended strategies for beginner investors EXCEPT...
Try to pick winning stocks and beat the market
Felix opens a credit card with no annual fee, so he assumes that using the credit card regularly will be absolutely free for the next two years while he finishes grad school. Why is his assumption incorrect?
Unless he pays the whole bill every month, he will pay interest according to his APR
How might someone's location impact the different transportation options available to them?
Urban areas offer more public transport and car sharing; rural areas rely more on having a personal vehicle
Which of these actions would most likely decrease a person's net worth for at least the next 6 months?
Use a loan to buy a brand new car
Which of the following statements is an advantage of online banking?
Using online banking, you can request transfers, pay bills, and automate your savings without visiting the bank branch
You recently accepted a new job and your first day is next week. What form will you have to complete before you receive your first paycheck?
W-4
All of the following are ways to avoid ATM fees EXCEPT...
Withdrawing money from your savings account instead of your checking account
Which of the following statements is TRUE about overdraft fees?
You are charged when more money is withdrawn from your account than it has available
All of the following are advantages of a 401(k), EXCEPT...
You can invest your 401(k) into a wider variety of asset types than you can with an IRA
Paying more than the minimum payment (or paying your balance in full) is beneficial because...
You pay less interest overall
You are required to file a tax return in all of the following scenarios EXCEPT...
You were self-employed and made $2,500
What does it mean when someone says "Good investing is boring"?
You're better off making long-term investments that don't require day-to-day management
All of the following appear on your credit report EXCEPT...
Your checking account balance
