Wise Test Review - 50 questions
The purpose of investing is to
increase wealth over time.
Two year ago, a person bought a ticket to the movies that cost $10.00. This year a ticket for the movies costs $12.00. This increase is most likely due to
inflation
A role of the Federal Reserve Bank (Fed) is to
influence interest rates.
When investors decide to buy mutual funds, they are usually trying to diversity their investments by
investing in a combination of stocks and/or bonds rather than a single stock and/or bond.
It is a good ideas to use a credit card if a person
is able to pay 100% of the credit card balance due each month
One DISADVANTAGE of giving someone a cash/gift card is that the person
is required to make purchases for the exact value that is on the card
An advantage of using a bank is that generally
its savings accounts are FDIC insured
A student is interested in becoming an engineer, for her a major advantage of doing an unpaid internship at an engineering firm is having the opportunity to
learn about the profession from people in the company
The interest rates for loans at credit unions are generally
lower.
A factor that can cause the price of a stock to DECREASE is the company
lowering its expectations of future earnings.
The most important reason for having health insurance is that
medical costs related to serious health care problems are high
The main purpose of paying Social Security Tax (FICA) is to be able to receive
money during retirement
A person has been contributing regularly to her company's 401(k) plan. She decides to leave the company. It would be financially advisable for her to
move the money from the 401(k) plan into another qualified retirement plan
The United States Treasury Department changes the appearance of the country's currency in order to
prevent hi-tech counterfeiting.
Endorsing a check is very important to
prevent the wrong person from cashing the check.
A major reason that corporations issue stock is to
raise money to expand business activities.
In general, taxes are used to
raise money to pay for government services and expenses.
A person is looking at his budget to find ways to invest more money. It would be best for him to
reduce this variable expenses.
It may be a good idea to borrow money when a person wants to pay for
school tuition
A service that banks provide is
selling certificates of deposit (CDs).
A person may need to have liquid assets when
there is an emergency need for cash
The DISADVANTAGE of taking a loan for the maximum number of years allowed is that the longer the period of time of the loan, the greater the
total cost of the loan
How much additional credit does this credit owner have available on credit card B?
$7,000
Who suffers the LEAST when the rate of inflation increases?
: People who have a loan with a fixed-interest rate.
What is a credit card cash advance?
A loan from a person's credit card company.
A credit card is issued to John and Maria Davis. This month, John charges $100 and Maria makes no charges. When the bill is received who is legally responsible for paying the $100
Both John and Maria
Which of the following is considered a source of personal income?
Capital gains from the sale of stock.
Which is the best advice to follow when buying car insurance?
Contact several insurance companies to obtain the best rate for the amount of insurance coverage needed.
A landlord never received the rent check sent by the renter two weeks ago. What is the first action the renter should take
Contact the bank to find out if the check was cashed.
Which credit card term is correctly matched with its explanation?
Due Date: the date by which the credit card company must receive a person's required payment in order to avoid a late fee.
Which of the following is generally an important concern for a 35-year-old person with young children?
Having life insurance to protect the family in case of his death
Which action shows that a person is in SEVERE financial trouble?
Having to borrow money each month to pay for food and rent.
What is the purpose of having a budget?
It helps a person avoid debt and have money for savings or investing.
What is a lien on a person's car or house?
It is the lender's legal claim on an asset if the borrower fails to repay a loan.
Even though investors can buy stocks and bonds online using the Internet, many people still use the services of a broker. Why
People want the advice that brokers provide to their clients
A person's gross pay for this month is $4,000. Why should his monthly budget be less than $4,000
Taxes are taken out of his gross pay, reducing the amount of money he takes home
What is an advantage of transferring funds electronically?
The money will not be lost in the mail.
Why is the seller of a used car asking the buyer for an official bank check?
The seller wants a form of payment that is guaranteed to be as good as cash.
What is the purpose of homeowners insurance?
To cover the costs of damage to, or loss of a home.
A person receives $200 from an uncle for graduation. This money is considered
a gift.
A person wants to open a bank account in his name. He will be required to give the bank
a state or federal-issued picture identification.
The value of buying insurance for a cell phone is to
be able to replace the cell phone if it is lost or stolen.
A good financial goal should
be achievable in five years.
An advantage of using a debit card is that a person
can use the debit card as an alternative payment method to cash when making purchases
Selling an investment for more than the purchase price results in a
capital gain
Health Maintenance Organization (HMO) insurance plans require their policy holders to
choose a doctor from a list the insurance plan provides
A person wants to buy stock in McDonald's. Before buying the stock it is important that the person consider the
company's potential for making money.
The amount of money a person owes compared to the total of her spending limit allowed on her credit card is known as the
debt to credit ratio
John Smith, who is financially supporting his 10-year-old daughter, is able to reduce the amount of tax taken out of his salary by claiming his daughter as a
dependent
When a credit card company increases a person's line of credit, it may
encourage the person to use that credit card to by more than he can afford
