Personal Finance Final Study Guide

What was the net (or take-home) pay for this employee for this pay period?

$1,102.98

You "opt-in" and have overdraft protection on your checking account. The overdraft fees are $34 for each transaction when your account is overdrawn. You start the day with $5 in your checking account and spend $10 for a movie ticket, $7 for two slices of pizza, and $20 at the mall for some clothes. How much in overdraft fees will you owe the bank?

$102

How much did this person pay towards Medicare in this pay period only?

$19.62

Elizabeth is considering buying a $30,000 car. Which of these financing options will likely lead to the LOWEST monthly payment?

$3000 down payment, 6% interest, 84 months

Juanita has a part-time job that pays $12/hour and works about 50 hours every month. Her withholdings are Social Security (6.2%), Medicare (1.45%) and federal income tax (10%). What is her approximate net pay?

$500

You purchase 100 shares of Ravioli Den for $45/share. One year later, you sell the shares for $52/share. What was your TOTAL GAIN for your investment in Ravioli Den?

$700

In current markets, which of these represents a competitive but realistic interest rate on a savings account?

1%

Now that he has a part-time job, your younger brother Daniel is opening up his own checking account. You want to pass on what you have learned about checking accounts to him. Prepare a list of recommendations for Daniel covering the following topics: Questions he should ask before opening an account Three ideas on how best to manage his account Three features of online and mobile banking that he should use Overdraft protection: Opt-in or opt-out?

1. He should ask about all the fees the bank charges and interest rates. He should also ask why he should open up his checking account with them. He should compare banks to see which is the best option for him. 2. One way he can best manage his account is to download the mobile banking app if there is one. A second idea would be to make sure he is being cautious about entering the pin number in busy stores or shopping on unsecured websites. A third idea for him to best manage his account would be to not get overdraft protection. There can be a lot of fees when getting this protection. 3. One feature of online and mobile banking he should use is direct deposit. It is a fast way to directly receive money into your checking account. Another feature is many apps allow access to both the checking and savings account. It is an quick way to transfer money between these two accounts. A third feature is cashing checks online. He can cash his checks online by using the mobile app and taking a picture of it. 4. He should not get overdraft protection. He shouldn't get overdraft protection because it adds up after you have run out of money. Overdraft protection is one of the main ways banks make a profit.

List 3 key differences between federal and private student loans.

1. Private student loans tend to cost more than federal loans. 2. Federal loans come from the government and private student loans do not. 3. Federal loans tend to have a set rate of interest over a certain period of time while private student loans vary.

Which of these lists ranks the savings options from expected highest interest rate to lowest interest rate?

10-year CD, 5-year CD, Online savings account, Savings account at traditional bank

You want to take earnings from your part-time job to pay for a new laptop. Your monthly take-home pay is $500 and the laptop costs $1,200. What percentage of your pay do you need to save in order to buy the laptop in 12 months?

20%

Order these types of financial aid from MOST attractive to LEAST attractive: 1) Private Loans 2) Work-Study 3) Grants & Scholarships 4) Federal Loans

3,2,4,1

Joelle wants to have an emergency fund to cover 6 months of her expenses. Her monthly gross pay is $4,000 and her monthly expenses are $2,000. If she plans to save 10% of her gross pay each month, how long will it take her to build her emergency fund?

30 months

Which of the following paycheck withholdings put money into a retirement investment fund that you will manage?

401(k) Contribution

Which of these payment terms will likely lead to you paying the LEAST interest on your student loan?

5 year term

Which of the following statements is TRUE about the value of education?

A college graduate can expect to earn, on average, about a $1,000,000 more than a high school graduate over a career.

Which of these is NOT a known reason that people impulse shop?

A concern about inflation and its impact on the future cost of goods

Which of the following is most likely to represent a fixed rate, secured debt?

A dealer financed auto loan

Which of these transactions will a bank cover even if the customer does not have enough money in their account to cover the amount of the transaction?

A debit card transaction on an account which the customer has opted-in to overdraft protection

SocialMediaCo: It had an overall return of 6.4% while CableCo had an overall return of 6.0%

A factor that can influence an individual company's stock price would be if there is news about an issue with their items. An example would be a virus going around with eating a certain food. Another factor that can have an influence would be the CEO announcing something with the company. An example would be when Elon Musk tweeted about Tesla as a joke. This caused many people to sell their shares and their stock price to drop.

Explain how the monthly payment on a loan is affected by each of the following THREE factors: A higher interest rate - A larger down payment - A longer term -

A higher interest rate will decrease the amount of money paid monthly. If you pay a lot of money in interest, this means you paid in very small increments over a long period of time. Paying over a long period of time allows for the interest to build up. A larger down payment will decrease the monthly payment because you are able to pay off a certain amount right away. This can lead to a lower amount paid in total interest because the down payment decrease the total time it will take to pay off the loan. A long term will decrease the monthly payment because you have a longer time and will pay in smaller amounts. This can lead to a very high amount paid in total interest.

You are developing a savings plan and using short-, medium-, and long-term goals to motivate you. Which represents possible goals from short-term to long-term? Save for...

A new cell phone, college tuition, a house down payment

Every April, businesses in your city start hiring part-time high school employees to work during the summer. You really want to secure one of these jobs. What information should you have with you to be sure you can fill out an application at any place that's hiring?

A resume, your social security number, and contact info for your references

Which of these best describes what is meant by an online savings account?

A savings account offered by a bank that exists only online, without physical bank branches

Provide a scenario in which you might use your 30-second elevator pitch.

A scenario in which you might use a 30-second elevator pitch would be you are at a supermarket and you happen to see the owner or boss of a company. You would walk up to them and shake their hand and introduce yourself. You would say you are interested in their company and would love to work for them. You would talk about the positive experiences you have had and try to sell yourself. You should explain why you would be a great asset to their company.

You are trying to get an internship at a local newspaper for next summer. Who would be the best personal reference to include on your application?

A teacher whose class you've received As in the past two semesters

List THREE ways a young person can begin establishing and building a credit history.

A young person can begin establishing and building a credit history by getting a secured credit card and begin making little payments off by the due dates. This certain type of credit card is a safe way to go for young teens. They can also co-sign on a credit card with their parents and begin making payments on that card. A third way a young person can begin is getting an unsecured credit card. This card has more responsibilities than a secured credit card.

Which of the following describe what a "dependent" is for tax purposes? A) Children under the age of 19 B) Anyone permanently disabled C) All students D) Full-time students under the age of 24

A, B, and D only

What type of investment is managed by an investment professional seeking to "beat the market" through good stock picking? This type of investment also typically carries higher fees which may make it difficult for it to "beat the market."

Actively managed mutual fund

Your sister Reagan has her paycheck direct deposited into her checking and savings accounts each pay period. She asks you how she should split her paycheck between the two accounts. What is the best advice you could offer her to encourage her savings habit?

Add at least 10-20% of her paycheck to her savings account and the remaining 80-90% to her checking account

Amy and Chuck each buy a house in the same neighborhood for $250,000. Amy's monthly mortgage payment is $400 more per month than Chuck's. Which one of the following statements could explain this difference?

Amy chose a shorter term for her mortgage, so her monthly payments are higher.

When a bank says their savings account earns 1% interest, that typically means you will earn 1% interest over what period of time (Note: this is not referring to the compounding frequency or frequency of interest payment)?

Annually (a year)

Which of the following could have a NEGATIVE impact on your credit score?

Applying for multiple credit cards in a short period of time (e.g., a week)

Which represents the best time to start saving for your retirement?

As soon as you graduate and have your first full-time job

You overhear your Aunt Tina tell your mom that she, her husband, and their kids are "living paycheck to paycheck." What does Aunt Tina mean by that?

Aunt Tina and her family don't have any money saved, and their paychecks are just barely covering monthly expenses, so they use every dollar every month

Which TWO of the following statements are advantages of online banking? A) Once you set up online banking, your bank will waive overdraft, ATM, and monthly fees B) With online banking, you can view your daily transactions and balances, rather than waiting for your monthly statement C) Using online banking, you can request transfers, pay bills and automate your savings without visiting the bank branch D) You can shop online only if your bank account has online banking features

B & C

You are 18 years old, opening your first savings account, and are considering three options: BANK A is not FDIC insured, has an interest rate of 5%, and a minimum deposit of $25. BANK B is FDIC insured, has an interest rate of 0.01%, and a minimum deposit of $50. Bank C is FDIC insured, has an interest rate of 0.02%, and a minimum deposit of $10,000. All three have fees competitive with other banks. Which bank is the best option?

Bank B

What is the best advice to prevent identity theft?

Be careful with your credit and bank account numbers, create good passwords, and beware of phishing emails

Your friend Wilma wants to create a LinkedIn profile. What advice would you give her?

Be sure to proofread for spelling, punctuation, and to make sure you're presenting your best possible self

How can you use compound interest to your advantage when it comes to investing for your retirement?

Begin investing for retirement while you in your 20s since the impact of compound interest grows over the long-term

Which investment is an IOU issued by a company that makes a regular coupon payment to investors?

Bond

How is a LinkedIn profile similar to a resume?

Both highlight the best features about you that make you "right" for a job

Which of the following is TRUE about checking accounts?

Both interest rates and fees are subject to change by the banks

You received a call from an ice cream shop in reference to your recent application for a part-time job. They want you to come in for an interview next Thursday at 6:30pm. What will you wear?

Business casual attire, such as non-jeans and a nice collared shirt or blouse

Which of these is an example of "Keeping up with the Joneses?"

Buying new sneakers the day they come out, because you know others in your class will have them, too

Which of the statements about this W-4 is TRUE?

By claiming 3 allowances, Mr. Khan will have less tax taken out of each paycheck than if he claimed just 1 allowance.

What is the most important question you should have after seeing this ad about a check cashing business?

Can I get a written copy of all of the fees that you charge for your services?

Which of the following is NOT a good habit to protect your checking account information?

Carry the PIN number for your debit card with you in your purse or wallet

Juan saved $1,000 from his summer job cleaning pools. Which of these savings vehicles would work best for him if he doesn't need access to the money for a number of years AND wanted to earn the highest interest rate?

Certificate of Deposit

Which of the following transactions may NOT be reflected when you go online to review your checking account balance?

Check that you mailed to your cousin for his birthday today

Who tracks all of your credit information?

Companies (Equifax, Experian and TransUnion)

Elaine is an employee. Which of the following steps is she responsible for?

Complete a W-4

Which of the following would be a suggested action prior to a job interview?

Conduct online research to learn more about the person you are having the interview with

Which of the following is NOT a good strategy that a "responsible borrower" would use?

Consider only out-of-state schools to attend.

Jocelyn gets a text alert from the bank that her account balance has dropped below $100 after a series of $20 ATM withdrawals. She has not used her ATM in over a week and wonders what she should do. What would you recommend?

Contact your bank immediately as it appears that your account may have been hacked

Katrina works for Penny's Pickles, which offers a 401(k) match for up to 3% of her salary, which is $50,000 per year. In her budget, she only has $150 per month available to save for retirement. What should she do?

Contribute the full $150/mo to the 401(k) because her company will match that full amount, "doubling" her investment every month.

Your friend, Juliana, has an informational interview next week. She asks you for advice on how to prepare for it. What would you recommend?

Create a list of questions ahead of time that will help you get a better understanding of their job and the industry they work in

Which represents the most traditional sequence of events for being hired for a job?

Create resume, fill out application, interview

You're paying your credit card bill and your student loan payment each month, but you're falling behind on your auto loan payment. Which friend's advice could have a negative impact on your credit score?

Debbie says, "Stop making the credit card payment for a few months until you're caught up on the auto loan."

Which of the following financial products will NOT help you build a credit history?

Debit card

Which of the following are the three largest categories of federal government spending?

Defense, Social Security, and Medicare/Medicaid

What is THE question an investor should ask before investing in a Roth IRA or a Traditional IRA?

Do I want to pay taxes now (Roth IRA) or later (Traditional IRA)?

Your friend has an interview tomorrow and is seeking his first job. Which of the following represents the WORST piece of advice you can give him?

Don't ask questions during your interview, because you will come across as uninformed or unqualified

While doing online research about the colleges you're considering attending, you see an ad that says, "Enter a few vital pieces of information, pay $39.99 per month, and we guarantee to win you a scholarship. You don't even have to write an essay! Sign up today with just your name, social security number, and an email address!" How should you proceed?

Don't sign up, because you shouldn't pay money to win scholarships, and you shouldn't enter your SSN into unknown websites

When Emmanuel receives his Student Aid Report, it lists an Expected Family Contribution of $8000. His family had only budgeted to give him $2000, so they are $6000 short. Which of the following is not an option?

Emmanuel starts the semester, hoping the college doesn't notice the shortage, and then deals with the consequences if they catch him

In order to qualify for financial aid, which form must you file?

FAFSA

Which of the following is NOT a factor to consider when opening a brokerage account?

FDIC insured

Mia is opening her first checking account, and she's trying to decide whether she should sign up for overdraft protection. Which friend's advice is MOST accurate?

Frank says, "Overdraft protection may seem handy if you have an emergency (like needing gas to get to work) but you might pay lots of overdraft fees if you don't keep track of your account closely."

Fred is comparing different financial aid award letters he has received. He notices that some of the letters do not contain sufficient information for him to determine the net price for that school. What is the BEST course of action that Fred can take?

Fred should contact the financial aid office at each school to ask for the missing information.

You bought 10 shares of stock in StreamingVideoCo for $45 per share. Two months later you sold the 10 shares of stock for $80 per share. What was your profit or loss on StreamingVideoCo stock? Assume that StreamingVideoCo didn't pay a dividend and that you didn't incur any trading fees during that period.

Gain of $350

Heather receives a phone call, in which an automated voice states that her credit card has been used fraudulently and that she must enter her 16-digit credit card number, using the keypad of her phone, to clear up the error. What should Heather do next?

Hang up and call her credit card company using the 1-800 number on the back of her card to inquire about the issue or report the attempted phone fraud

The Credit CARD Act of 2009 requires consumers under the age of 21 to either have an adult cosigner or:

Have proof of personal income sufficient to make the payments.

How does your social media behavior influence your ability to get a job?

Having a professional LinkedIn profile is critical since almost all recruiters use it to find talent

While opening your checking account, the bank representative seems very interested in getting you to opt in for overdraft protection. What might explain his motivation?

He may be receiving a sales commission for every customer who opts in to get overdraft protection

Geraldo is excited to practice his elevator pitch as he looks for a summer job. "I am looking for a job but don't have any experience. I want a job so I can make money for things I want, like new wheels for my car and a spring break trip that I want to take with friends. I attend NGPF High School and will graduate next year and need a schedule that works for me." What's the biggest problem with his statement?

He's focused on what he wants more than on what he can provide for the employer

Avery wants to apply for an internship in video game development, but she's never had a job before. What strategy should she use when crafting her resume?

Highlight other things she's done that might make her an attractive candidate -- taking a programming class in high school, being VP of the video game club, contributing to online gaming forums regularly

Which of the following statements about banks is FALSE?

Historically, savings accounts earn higher returns than investments in the stock market

Steven is taking AP courses, plays a fall varsity sport, and is a member of the student council and the chess club. Although he's busy, he also would like to get a part-time job for 8-10 hours per week to generate spending money for when he hangs out with his friends. What should his focus be when job searching?

How flexible will the employer be with his school and extracurricular activities?

Your friend Jason is not planning on submitting the FAFSA, because he thinks that his parents earn too much for him to be eligible for financial aid. You tell him that this is a common misconception and that he should definitely file the FAFSA. Otherwise, he could miss out on: I. Subsidized and Unsubsidized Loans II. Work-Study III. Private Loans IV. Grants and Scholarships

I & II only

Which of the following is a good strategy to use when it comes to paying for college? I. Make a financial plan to figure out how you are going to pay for 4-5 years of college BEFORE you go II. See how much you can borrow in loans before applying for scholarships III. Spend the money that you earn from your summer job so you can get more financial aid IV. Save your earnings from your summer job so you can reduce the amount of loans needed

I & IV only

Jamille and her friend Evelyn both earn $50,000 a year but live in different cities. Jamille lives in Denver, Colorado while Evelyn lives in sunny Los Angeles, California. The chart below shows each state's rank in terms of state taxes (1 = lowest, 50 = highest) and then the adjusted rank when cost of living is considered (1 = cheapest, 50 = most expensive). Which statement below would you most expect to hear from Jamille when she is talking to Evelyn?

I would rather live in Denver than Los Angeles because while my state taxes might be higher, I can save much more money because my cost of living is lower

What tax form am I? I am received when you start a job. You use me to prove that you are eligible to work in the U.S., and you must provide forms of identification when submitting me.

I-9

What are TWO advantages of federal student loans? I. Federal student loans do not need to be repaid II. Federal student loans generally have more flexible repayment options compared to private loans III. Federal student loans have lower credit standards (are easier to get) than private loans which may require a co-signer IV. Federal loans don't charge any interest for the entire term of the loan.

II and III

Janelle's family earns about $60,000 per year. She has been accepted to State U and Greenlawn College and is comparing their financial aid packages. State U has a sticker price of $28,000 and net price of $12,000. Greenlawn College has sticker price of $60,000 and net price of $9,000. Which statement below is FALSE?

If making a decision strictly based on cost, Janelle's best option is State U

Which of the following is TRUE about student loan repayment?

If you miss a loan payment, there can be consequences starting as early as 15 days after your first missed loan payment.

What is an advantage of using a credit card?

If you pay off your balances every month in full, it's like getting a short-term interest-free loan

Explain three key differences between index funds and mutual funds.

Index funds tend to have higher returns than mutual funds if you invest correctly. Index funds also earn compound interest over a period of time. Index funds are also more diverse.

Briefly explain why inflation makes it difficult to save long-term in a traditional savings account earning 1%.

Inflation make it difficult to save long-term in a traditional savings account that is earring 1% because that percentage is smaller than the average inflation rate. The average inflation rate is 2% to 3%. This causes the money in a savings account to decrease in its worth. Inflation causes goods to increase in price, so it is hard to accurately calculate how much you should be saving.

Elaine has been saving over the years and now at the age of 23 has $1,000 to invest. She knows herself well and has a high tolerance for risk. She would like this $1,000 to be the start of her retirement fund. What do you think is a good investment strategy for Elaine?

Invest $800 in a stock index fund and $200 in a bond index fund

Which of the following would represent the best investment strategy for a novice investor in her early 20s?

Invest 75% in a stock index fund and 25% in a mix of bonds, and repeat this strategy every month

Which of the following investment choices best reflects a diversified portfolio?

Investing in an S&P 500 index fund

Which of the statements below BEST describes the relationship between risk and return when considering an investment?

Investors expect to earn a higher return when they invest in a high risk asset like stock in a small company

Which of the following statements is TRUE about stocks and bonds?

Investors generally expect to earn higher returns from stocks compared to bonds

Which of the statements below is TRUE about stock markets?

Investors have their buy and sell orders of company stocks matched electronically by the various stock markets throughout the trading day

You are at the checkout counter at the local supermarket and use your debit card to pay for your groceries. Where does the money for this purchase come from?

It is deducted directly from your checking account

Which of the following are good reasons to buy a stock index fund that invests in the S&P 500?

It is diversified, has low fees and historically has performed better than most mutual funds investing in big companies

Which of these statements about savings is INCORRECT?

It is extremely difficult to open a savings account, as you typically need at least $10,000 for your initial deposit

What does the term "withholding" mean in reference to your paycheck?

It is how much is being taken out of your paycheck in taxes.

Provide THREE reasons for why it is important to start establishing a credit history as early as possible.

It is important to start establishing a credit history as early as possible because it is a way to show you are responsible enough to pay off the money you have borrowed. When you are older and try to take out an auto loan, you will most likely need to have a good credit score for you to get the loan to make the payments. You will also need to establish good credit early on so you can get the lowest possible interest rates when you are older. If you credit score is high, you will probably receive lower interest rates.

Explain why it is important to start saving for retirement in your 20s, when retirement is likely four decades in the future.

It is important to start saving for retirement in your 20s because it gives your money a longer time to grow. When you start saving early, you don't have to take as much money out of each paycheck compared to if you started in your 40s. When you have a lot of money saved up for when you are older, you will have more decisions on if you want to invest your money and what type of investments you want to make if you are interested.

Provide three reasons it is important to start saving or investing for retirement as early as possible.

It is important to start saving or investing for retirement as early as possible so you don't have to take out as much money from a paycheck when you are older. Another important reason to start saving for retirement when you are young is so you know you are financially stable after you retire. Starting to save when you are young also makes it less stressful by knowing you are on the right track for retirement.

You should also know that I have a sincere appreciation of the IRC. I have enjoyed learning about programs and have personally visited your New York headquarters, the San Diego New Roots farm, the We Can Be Heroes exhibit, and the Half the Sky exhibit in Los Angeles. The IRC is my top choice and I believe I would be a valuable addition to your fundraising team. Which of the statements is NOT true about the cover letter?

It is not a strong statement, as the applicant is just bragging about all that she has accomplished

Which of the following statements is TRUE?

It is wise to diversify your investment portfolio to reduce risk.

Which is an advantage of paying your bills using the online bill pay feature with your checking account?

It saves time and paper.

Josie is trying to figure out how to implement her investing strategy. She wants to compare online brokers, financial advisors and robo-advisors. What are 2 questions that she should consider during her research? Note: You don't need to answer the questions, only ask them.

Josie should ask herself if she wants help from an actual person or from an online website. Josie should also ask herself how much work she wants to do herself and if she has time to be committed.

Your cousin Justine overdraws her checking account at least 4 times per month every month. Which of the following recommendations does NOT seem reasonable to help get her account under control?

Justine should shut down her checking account and start paying for everything in cash.

Keith's tuition, room & board, and fees for freshman year total $26,000. Using scholarships, grants, and Federal student loans, his financial aid package is $26,500. What option below is both realistic and financially responsible?

Keith should pick up a part-time job (during the academic year or during breaks) to cover remaining expenses

Which statement best describes why payday and auto title loans are sometimes referred to as "predatory lending?"

Lenders "prey" on low-income borrowers who have little to no other options for obtaining a loan

Which of the following statements about this W-2 is NOT true?

Lilly earned about $117,000 in 2012 based on adding up her Wages, Social Security, and Medicare wages

Your friend confides in you that he has a low credit score. What is the single best way for him to improve his score?

Make on-time payments

Select the statement below that accurately describes characteristics of a credit card.

Making full payments on time every month is the only way to avoid interest charges

Which of these credit payback strategies would lead to the HIGHEST interest charges?

Making the minimum payment (3% of your credit card balance) every month with an occasional late payment

Out of the following group, who does NOT have to file a tax return?

Max, whose total income was less than the standard deduction for that year.

How frequently is this employee paid?

Monthly

Experts recommend that you accumulate enough to cover 3 to 6 __________________ of expenses in your emergency fund.

Months

You invest $1,000 in a stock index fund. Ten years later, your investment has earned a compound return of 6% per year. What would your initial $1,000 investment be worth after this ten year period?

More than $1,600

Rosita is a high school student and track team member who has been babysitting her neighbor's daughter since she was 12. In what order should she structure the sections of her resume?

Name/contact info, work experience, education, honors & awards, athletic teams

Fill in the blanks with the correct responses. If you follow the 50-20-30 rule of budgeting, you'll be putting 50% of your monthly income toward _______________, 20% of your monthly income toward _____________, and 30% of your monthly income toward ______________.

Needs, savings, wants

Provide THREE possible consequences for not making your credit card or loan payments on time.

Not making your credit card or loan payments on time can lead to a lower credit score. This can lead to you paying higher interest rates. Another consequence is these late payments will be on your credit report for many years. A third consequence is the lender could eventually have ownerships to your assets if you don't pay it off soon enough.

Marquis is starting a fast food job during his senior year of high school. He lives with his parents and they will claim him as a dependent on their taxes this year. He earns $2000. Based on how he completed his W-4, his employer withheld $200 in federal income taxes from his paychecks. What will happen if Marquis doesn't file taxes in April?

Nothing will happen, but Marquis will miss out on his potential refund.

How much does it cost to file the FAFSA?

Nothing; it is free

What is one common misconception students have that prevent them from filing the FAFSA?

One common misconception students have that prevent them from filing the FAFSA would be them thinking it does not apply to them. Some students might think they won't be attending college or that their parents salary is too high and isn't necessary.

You find out that your older cousin missed a student loan payment about 175 days ago. Give two financial consequences will he face if he reaches 270 days.

One financial consequence he will face if he reaches 270 days is the loan will be set at default. The people loaning the money will have access to his paychecks first and will be able to decide how much they will take. Another consequence is he will lose all of his assets due to the contract he signed.

Reading through a credit card disclosure (aka the Schumer Box), you see the A.P.R. for a specific card is set at 9.99% - 23.99%. Indicate which statement is true.

One of the primary factors determining your card's A.P.R. is your credit score

As a young adult, all of the following are good strategies for building credit, EXCEPT:

Open a checking account, and start using a debit card

The largest source of fees for banks when it comes to checking accounts is...

Overdraft fees

What are the two most important factors in calculating your credit score?

Payment history and amounts owed

Which of the following is NOT a good reason to create an emergency fund?

Pays for big ticket items like a vacation or designer clothing

Which of the following documents is NOT required to file your FAFSA?

Proof of employment

What is NOT a good strategy to help you avoid overdraft fees?

Relying solely on the bank app that provides you with your current checking account balance

Which of the following would NOT appear on a credit report?

Salary of your current job

Which of these would most likely be classified as an internship?

Santos wants to major in marketing and applies for an unpaid job doing social media posting for a local nonprofit

Which of the following is an effective strategy for personal saving?

Save a certain percentage of each paycheck and deposit it directly in a savings account

Which statement best describes the difference between saving and investing?

Saving goes into an FDIC insured bank while investing typically goes into stock or bond markets

What financial product am I? I am a type of credit card that requires cardholders to make a security deposit equal to the credit limit on their account. Due to this deposit requirement, I am often a good choice for young people looking to establish a credit history.

Secured credit card

You just finished an interview for a summer internship you'd really like, and the interview seemed to go well. What would be an appropriate follow-up?

Send a handwritten thank you note to the person you interviewed with

Melissa is a salaried employee who earns roughly the same amount in every paycheck. Why would it be a great idea for her to set up an automatic transfer every pay period into her savings account?

Setting up an automatic transfer for Melissa's money would be a great idea because she is earning a paycheck. The paycheck is a set amount so Melissa knows exactly how much she should put towards her needs, wants, and savings/debts. It would be very easy for her to calculate how much she should automatically transfer each paycheck.

I forget to pay my credit card bill one month. How long will that payment information show up on my credit report?

Seven Years

When signing up for a new checking account you answer "No" and opt out of overdraft protection. On this day, you have $10 in your account and go out and use your debit card to buy lunch for $12, a movie ticket for $12 and dinner for $15. What is likely to be the outcome resulting from these transactions?

Since you turned down overdraft protection, the bank will not allow you to overdraw your account so your card will be denied in these 3 instances

Geraldo reviews his brokerage statement and sees the following two investments that he made a year ago. CableCo had an annual fee of 1% and had an average return (before fees) of 7% per year. SocialMediaCo had an annual fee of 0.1% and had an average return (before fees) of 6.5% per year. Which investment had a better return for Geraldo (net of fees)?

SocialMediaCo: It had an overall return of 6.4% while CableCo had an overall return of 6.0%

Which of the formulas below equate to net price?

Sticker price minus grants and scholarships

If you are having trouble making auto loan payments, and are really following a tight budget, which recommendation below represents the WORST advice?

Stop making payments on some of your debts so you can focus on getting the most expensive or largest debts under control

Which type of financial aid am I? I have limits on the amount that you can borrow based on your year in college. The federal government makes the interest payments on me while you are in college, and you make the interest payments on me after you graduate.

Subsidized federal loan

Which of the following is NOT a reason that you might choose to invest in a Target Date Fund for retirement?

Target Date funds are generally all alike and so therefore do not require any research prior to you investing in them

Upon completing your 1040, you realize that you owe the IRS $427. Which of the following is NOT an option for making your payment?

Tell the IRS to take out more taxes next year to pay back the $427

Which of the following statements about stock market indices is TRUE?

The S&P 500 is the most popular stock market index since it encompasses a large number of companies that represent about 70% of the value of the stock market

Which of the following statements is NOT true about the Standard Repayment plan?

The Standard Repayment Plan has high monthly payments, so you will end up paying MORE in total than any other repayment plan.

Which of the following statements about the W-2 form is NOT true?

The W-2 includes information about the interest you earned from your investments.

Which of these statements best explains why it's often a good idea to pay more than the monthly amount due on an amortized loan?

The extra payment will be applied to the principal amount you owe, which will pay down your debt more quickly

What are two things you can do during college and/or during your grace period to prepare for student loan repayment?

The first thing you can do to prepare for student loan repayment is to get a job. Throughout college you should have a job that will help increase on your savings toward paying off student debt. The second thing you can do to prepare is to contact the location you are receiving the loan from and ask about your plan and how much you will be paying monthly.

As a result of completing the FAFSA, you get a student aid report that indicates your EFC is $10,000. What does this mean?

The government expects that your family can contribute about $10,000 to the cost of your education

List two things the federal government spends your tax dollars on that you benefit from.

The government spends my tax dollars on new roads and national parks.

What is the relationship between a credit score and credit report?

The information in your credit report is used to calculate your credit score

Explain how the number of withholdings you claim on your W-4 form impacts your paycheck

The larger number of withholdings you claim on your W-4, there will be less money taken by the government.

Which of the following statement is TRUE?

The majority of Americans do NOT have an adequate emergency fund or sufficient amounts of money saved for retirement.

Why is investing a better option than saving when it comes to planning for retirement?

The stock market historically has returns higher than the rate of inflation, so your money can actually grow

What are three things you should do to be mentally and physically prepared for a job interview?

The three things you should do to mentally and physically to prepare a job interview are to do research to form questions to ask during the interview, practice some responses to some difficult questions you might be asked, and arrive to the location of the interview about 15 min. early so you are prepared to have a great interview.

What is the usual deadline to file your tax return? What could cause the date to change?

The usual deadline to file your tax return is April 15. If this day falls on a weekend it will be changed to the next work day unless the government says otherwise. You could also ask for an extension that will change the date.

Which of the following is a TRUE statement about check cashing stores?

They make their money by charging fees for transactions that can be done for free by customers with a traditional checking account

Three of these statements best describe a checking account. Which statement best describes a savings account?

This account pays you interest on money you have put away for later to help your money grow.

Provide 3 important factors to consider when trying to choose between two different savings account options.

Three important factors to consider when trying to choose between two different savings account options would be fees, interest rate, and locations. Fees are very important to take in to account because they can add up. Interest rates are important because they can vary from bank to bank, and a high interest rate can help expand your money. Locations are an important factor too when choosing a bank. If you travel a lot, a big chain might be a better option since there will be locations all over the country. Online banking is also impacting people's decisions on which bank to choose.

Assuming you live on campus, which of the following is a cost that you are LEAST likely to pay?

Transportation to and from school

A potential employer asks Ramon, "What is your greatest professional weakness?" Which answer would probably come across best in an interview?

Truthfully, I'm not great at speaking up in large groups, but I'm working on it

Write two important tips that anyone filling out a job application should know and use.

Two important tips that anyone filling out a job application should know and use are talking about your past job experiences and using personal references that will help talk about your positive traits.

When investing in individual stocks, you should expect that...

Unforeseen company events can have a dramatic impact on the stock price for a company

Which practice below is NOT considered a good check writing practice?

Using a pencil so that you can quickly erase any errors without having to throw any checks away

Which of the following transactions will REDUCE your checking account balance immediately?

Using your debit card to pay for groceries at the supermarket

Which of the following is NOT a way to file your taxes?

Using your stockbroker

You deposit a birthday check by using the bank app that you have on your smartphone. What is the standard amount of time that you will need to wait in order to get access to these funds?

Usually 1-7 business days later

Which set of items would be appropriate to include on your resume during high school?

Volunteer experience, sports team participation, computer skills

What tax form am I? I am received in January. There is one of me for every employer that you worked for in the previous year. I have information on how much you earned and how much you paid in taxes for the previous calendar year.

W-2

You are starting your first job and you are asked to complete some paperwork on your first day. Which form will determine how much money is withheld from your paycheck for federal and state income taxes?

W-4

Which of these represents a potential consequence of neglecting to pay your credit card or loan debts?

Wages or tax refunds can be garnished

Your friend Daniela has prepared a list of questions to ask in her interview tomorrow at a local fast food restaurant. Which question should she NOT ask if she wants to get the job?

What happens if there are days when I'm scheduled to work but I have a lot of homework or an after school event I want to attend?

Which of the following is NOT a question that determines whether you need to file a federal tax return?

What state do you live in?

When do you start paying taxes?

When you make more than the minimum income requirement

Which of the following statements about applying for grants and scholarships is FALSE?

While the FAFSA is required for federal loans or grants, you don't need to complete it for university, community, or professionally sponsored funds

Why is compound interest more advantageous than simple interest?

With compound interest, you earn interest not only on the amount you have saved, but also on the interest you've already earned

Which of the following statements comparing credit and debit cards is TRUE?

With debit cards, you're spending your own money at point of sale, while with credit cards, you're promising to pay back the money eventually

Cover letters can be time consuming to write. Which of these is the best approach to use on this task?

Write a personalized cover letter for each job you apply to, but keep it to no more than one page

As a teenager with a job, which of the following is a benefit of putting your tax refund (and a chunk of your paycheck) into a Roth IRA?

You are getting a head start on your retirement from an early age and will benefit from a long period of compounding

Your friend Laila is talking to you about the benefits of tax filing software. Which of the following is true?

You can avoid the costs of having to pay a professional, though you may have to pay for the software and/or e-filing online.

How does investing in the stock market differ from putting money in a savings account at a bank?

You have the opportunity to make more money when you invest compared to what you can earn putting your money in a savings account.

As a shareholder in a public company, what are the benefits available to you?

You may receive dividends from the company, if the company pays them, and you have ownership of a portion of a company

Which of the statements below is TRUE about filing your taxes, assuming your only income comes from the salary you earn at BigTech company?

You must file your tax return by April 15th of the following year, or request an extension by that date

Which of the following statements is TRUE regarding references you would include on a job application or resume?

You should contact your personal references ahead of time to ask their permission to include them on your application

Why is it important for you to understand YOUR tolerance for risk before you start investing?

You should create an investment portfolio that matches your tolerance for risk

What is a good rule of thumb to consider when it comes to student loan debt?

You should generally limit your borrowing to what you expect to earn as a starting salary when you leave college

When signing up for a new checking account, you answer "Yes" to receive overdraft protection. On this day, you have $10 in your account and go out and use your debit card to buy lunch for $12, a movie ticket for $12 and dinner for $15. What is likely to be the outcome resulting from these transactions?

You will likely be charged an overdraft fee for EACH transaction and also will need to repay the bank for the amount overdrawn ($29) + interest

Which response best completes the sentence "It's best to begin establishing credit when you're young because ________" ?

You will likely need a credit history to rent your first apartment, finance your first car, or open an unsecured credit card

Your cover letter should NOT just be a restatement of the information in your resume. What are two things you can write in your cover letter that wouldn't already be in your resume?

Your cover letter should be more personal and direct to the company you are applying to. The two things you can write in your cover letter that wouldn't already be in your resume are your relations to the company, such as visiting their headquarters and the second thing would be thanking them for their time and consideration.

How should you think about the relationship between your resume and cover letter?

Your cover letter should highlight key elements of your resume that make you qualified for the job

According to the Equal Credit Opportunity Act, which of the following factors CAN a lender legally use to charge you a higher interest rate?

Your credit score

How can your credit score impact your financial situation?

Your credit score can determine whether you are approved for a loan and what the interest rate on that loan will be

Explain the relationship between your credit report and you credit score.

Your credit score is based on your credit report. Your credit report is a list of all of your information on your payments and if you have ever been late on a payment. These are factors that make up your credit score. If you make all of your payments on time, you will most likely have a higher credit score than somebody who is late on their payments.

You are a customer with an Everyday Checking Account. Indicate which statement below about your account is TRUE.

Your monthly service fee is waived if you have at least $1,500 as a daily balance

A 30-second introduction you prepare in order to introduce yourself to potential employers or professional network connections is called __________.

an elevator pitch

Your teacher tells you about the importance of checking your credit report. Which government-run website allows you to download your credit report for free on an annual basis?

annualcreditreport.com

The shorter your term length, the _______ your monthly payments, and the _______ the total interest you will pay.

higher, lower

When borrowing money through a loan, it is better to have a __________ interest rate. A __________ credit score indicates good credit and will lead to a __________ APR, or interest rate on the loan.

lower, higher, lower

Lisa, a high school student, bags groceries at the local supermarket three nights a week during the school year. She is a __________ worker and likely gets paid __________.

part-time, an hourly wage

Identify two different forms of income that are taxable?

salary that is over the required amount and a gift that is over the required amount that you should file taxes on.