WISE Personal Finance Literacy Test Practice Questions
Frankie's savings account has earned a lot of interest. He wants to know if he must pay taxes on the interest earned. What would the IRS tell him? Answer A-Interest earned on savings accounts is not taxable Answer B-A sales tax will be charged on the interest earned Answer C-Savings account interest is taxable Answer D-If the interest is under $50, it is not taxable
Answer C-Savings account interest is taxable
A pharmacy is to drugs as the American Stock Exchange is to: Answer A-Interest Answer B-Stock advisors Answer C-Securities Answer D-Mutual funds
Answer C-Securities
Which of the following is necessary for successful budgeting? Answer A-A copy of credit card report Answer B-The location of your banks Answer C-The ability to adjust spending to money available Answer D-A list of unexpected income
Answer C-The ability to adjust spending to money available
You can continue to charge purchases on your credit card when: Answer A-The amount you owe on this credit card is above your credit limit. Answer B-Your payments are always received by the due date. Answer C-The amount you owe on the card is below your credit limit. Answer D-You can afford the monthly repayments.
Answer C-The amount you owe on the card is below your credit limit.
Jami lost her debit card. She did not report it missing for 3 months. If an unauthorized person used her debit card, her maximum liability is: Answer A-$50 Answer B-$500 Answer C-Unlimited liability Answer D-No liability because she notified the financial institution
Answer C-Unlimited liability
A man budgeted $200 a month for clothing. This month the man spent $150 on clothing therefore that budget item is considered to have Answer A-an outflow deficit. Answer B-an income overage. Answer C-a budget variance (surplus) Answer D-a budget deficit.
Answer C-a budget variance
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 Answer A-one-fifth of the $20,000 face value. Answer B-$20,000 less the premiums paid. Answer C-a calculated amount of money which includes the premiums paid as well as the interest on that money. Answer D-a calculated amount of money that must be converted to a term life insurance policy.
Answer C-a calculated amount of money which includes the premiums paid as well as the interest on that money.
A blue-chip stock can be described as: Answer A-A pretty color for stock Answer B-A stock that is only for men Answer C-A stock with a good reputation for quality management, products and services Answer D-A stock that earns compound interest
Answer C-a stock with a good reputation for quality management, products and services
Using a brokerage firm, a qualified investor buys 1000 shares of a common stock at $50 a share on 50% margin. This means that the Answer A-investor will pay only $5000 for the shares. Answer B-investor is buying 2000 shares. Answer C-brokerage firm is lending the investor 50% of the money. Answer D-brokerage firm will own 50% of the 1000 shares of stock that were purchased.
Answer C-brokerage firm is lending the investor 50% of the money.
Julian is a single and recent college graduate who just got his first full-time job. Which of the following should be his first financial goal? Answer A-buying a house Answer B-buying a life insurance policy Answer C-establishing a fund for emergencies Answer D-creating a stock portfolio
Answer C-establishing a fund for emergencies
To qualify for a Federal Housing Administration (FHA) loan, a person must generally Answer A-have at least a high school diploma. Answer B-have one-quarter of the cost of the home for a down-payment. Answer C-fulfill income guidelines. Answer D-provide two individuals to co-sign the loan.
Answer C-fulfill income guidelines.
Financial planning helps individuals to: Answer A-guarantee future income Answer B-achieve all goals by set target dates Answer C-have strategies for saving and investing Answer D-eliminate risk on investments
Answer C-have strategies for saving and investing
Patty is selling her car through a newspaper advertisement. When she finds a buyer, she wants a form of payment which is guaranteed to be good. Which form of payment should she avoid? Answer A-Cash Answer B-Certified check Answer C-Cashiers check Answer D-A check
Answer D-A check
The most liquid type of investment is: Answer A-A corporate bond Answer B-A certificate of deposit Answer C-Real estate holding Answer D-A money market account
Answer D-A money market account
A type of electronic funds transfer (EFT) is: Answer A-A transaction made with a check Answer B-A deposit made with a bank teller Answer C-Not widely used by consumers Answer D-An ATM transaction
Answer D-An ATM transaction
Sally's health insurance policy requires her to pay the first $500 of medical costs each year before the company will pay any of her medical bills. This policy provision is the: Answer A-insurance pays everything Answer B- co-pay Answer C-Premium Answer D-Annual deductible
Answer D-Annual deductible
Which financial product may pay a dividend? Answer A-Savings account Answer B-Money market account Answer C-Certificate of deposit Answer D-Common stock
Answer D-Common stock
Which financial product typically pays the highest rate of interest? Answer A-Savings account Answer B-Money market account Answer C-Certificate of deposit Answer D-Common stock
Answer D-Common stock
Debbie owns a clothing store. She is concerned that a customer who is injured in the store will sue. Which type of insurance should Debbie purchase? Answer A-Social insurance Answer B-Life insurance Answer C-Surety bonds Answer D-Liability insurance
Answer D-Liability insurance
The primary sources of income for most people between the ages of 20 and 35 who are not living on a pension or social security are: Answer A-Profits from business Answer B-Dividends and interest Answer C-Rents Answer D-Salaries, wages, and tips
Answer D-Salaries, wages, and tips
Before the Kiss Corporation can issue stocks or bonds, it must register the issue with: Answer A-Its Board of Directors Answer B-The Federal Reserve Answer C-The World Bank Answer D-The Securities and Exchange Commission (SEC)
Answer D-The Securities and Exchange Commission (SEC)
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? Answer A-To reduce the premium on the homeowner's insurance. Answer B-To protect the person who owns the television from liability for damages. Answer C-To show the insurance company a good faith investment has been made. Answer D-To cover the cost of replacement should the television get damaged or stolen.
Answer D-To cover the cost of replacement should the television get damaged or stolen.
The best suggestion you gave a friend who is writing a check for the first time is: Answer A-Date the check because it is usually proof of payment Answer B-Use pencil to permit changes Answer C- Make the check payable to cash Answer D-Use the checkbook stub or register to keep a record of the date you write the check
Answer D-Use the checkbook stub or register to keep a record of the date you write the check
As an investment, a person decides to buy a small house that has three rental apartments. The profits from this investment may be lower then expected if the Answer A-tenant in an apartment decides to paint the hallways. Answer B-mortgage on the house is paid off. Answer C-taxes on the house are lowered. Answer D-one of the apartments is not rented.
Answer D-one of the apartments is not rented.
A person complains about how expensive it is to be a cigarette smoker. One of the reasons cigarettes are so expensive is that Answer A-the tobacco supply is controlled by the Federal Trade Commission (FTC). Answer B-the tobacco industry imports most of the tobacco. Answer C-their cost is controlled by the Food and Drug Administration (FDA). Answer D-the government imposes an excise tax on them.
Answer D-the government imposes an excise tax on them.
Jane saw a breakfast cereal being advertised on TV and insisted that her mother purchase this cereal. This is an example of advertising's: Answer A-power of persuasion in creating demand Answer B-influence on consumer discipline Answer C-failure to reach parents Answer D-focus on discouraging demand for products
Answer A-power of persuasion in creating demand
In terms of their finances, when a couple has a baby, they will Answer A-receive an additional tax exemption because of the baby. Answer B-need to obtain a W-2 form for the baby. Answer C-have to file a separate income tax form for the baby. Answer D-automatically start paying Social Security payments for the baby.
Answer A-receive an additional tax exemption because of the baby.
A term that best describes your gross pay after taxes are deducted is: Answer A-take-home pay (Net Income) Answer B-net worth Answer C-assets Answer D-total revenues
Answer A-take-home pay (Net Income) Need to know both terms)
After five years of owning a Roth Individual Retirement Account (IRA), a person wants to buy his first home, the person can withdraw money from the Roth IRA Answer A-tax and penalty free. Answer B-but must pay a set penalty at the time of withdrawal. Answer C-and have penalties deferred until retirement. Answer D-and owed taxes are deferred until retirement.
Answer A-tax and penalty free. It is only Tax and penalty free if it is for buying your first home, education purposes, or medical emergencies.
A person is convinced that a lending institution is charging too much interest for a loan. This person should be aware that Answer A-there are state usury laws. Answer B-lending institutions all have their rates of interest set by the SEC. Answer C-interest rates depend entirely on the borrower's ability to pay back the loan. Answer D-the Federal Trade Commission has laws against intimidating borrowers.
Answer A-there are state usury laws. Reason : Charging excessive interest rates on loans is known as "usury" and that practice is prohibited by law.
Electricity and food expenditures are: Answer A-variable expenses that change from one period to another Answer B-discreet expenses that do not have to be paid monthly Answer C-fixed expenses that remain the same from one period to another Answer D-personal expenses for an individual or family
Answer A-variable expenses that change from one period to another
What is meant by an uncollateralized loan? Answer A-A loan not backed by a co-signer who agrees to cover the amount of the loan. Answer B-A personal loan without assets to cover the loan amount. Answer C-A home equity loan. Answer D-A loan taken on a life insurance policy.
Answer B-A personal loan without assets to cover the loan amount.
Josh is shopping for a car loan. A friend told him to compare the actual cost of the loan for one year expressed as a percentage from three banks. He needs to ask for the: Answer A-Finance charge percentage Answer B-Annual percentage rate (APR) Answer C-Credit insurance percentage Answer D-Finance percentage
Answer B-Annual percentage rate (APR)
Which of the following insurance covers vehicles? Answer A-Death Insurance Answer B-Automobile Insurance Answer C-Racing Insurance Answer D-Life Insurance
Answer B-Automobile Insurance
The "Rule of 72" is an easy way to: Answer A-Approximate your savings balance each year Answer B-Calculate how fast your savings will double in value at given interest rates Answer C-Calculate how much tax you will owe on the interest earned Answer D-Calculate the length of time it takes to pay off a credit balance
Answer B-Calculate how fast your savings will double in value at given interest rates
Mr. Akon's wife died. The money he received as the beneficiary on her life insurance is called the: Answer A-Cash value Answer B-Death benefit or face value Answer C-Separate value Answer D-Premium or annuity value
Answer B-Death benefit or face value
When Mary bought a DVD player, she charged it on her credit card. Her purchase created a(an): Answer A-Reserve Answer B-Debt Answer C-Savings Answer D-Investment
Answer B-Debt
A good example of a well-stated financial goal is: Answer A-Buy a $25,000 car Answer B-Pay off $5,000 in credit card debt in two years Answer C-Buy a house Answer D-Become financially independent
Answer B-Pay off $5,000 in credit card debt in two years (Only answer that gives goal and time frame)
Gwen receives a bill from her auto insurance company, and she sends a check to the company to make sure her policy is not cancelled. The cost of her policy is called the: Answer A-Co-insurance clause Answer B-Premium Answer C-Deductible Answer D-Exclusion
Answer B-Premium
Safe-deposit boxes are: Answer A-A free benefit for accounts with deposits starting at $50,000 Answer B-Safe and can be accessed only by the owner of the box Answer C-Available at all banks Answer D-Convenient and accessible at any hour of the day or evening
Answer B-Safe and can be accessed only by the owner of the box
A bank Certificate of Deposit is a: Answer A-Savings instrument that requires a deposit for a period of time during which the saver can withdraw money from the plan at any time without a penalty Answer B-Savings instrument that requires a deposit for a period of time during which there is a penalty for withdrawals Answer C-Cash deposit in a savings account that earns interest Answer D-Certificate for deposits that are issued for half the face value
Answer B-Savings instrument that requires a deposit for a period of time during which there is a penalty for withdrawals
Joan wants to open a checking account and wonders if checking accounts pay interest. How would you answer her question? Answer A-All checking accounts pay interest Answer B-Some types of checking accounts pay interest Answer C-Checking accounts never pay interest Answer D-Checking accounts pay interest if the account balance does not fall below $300.00
Answer B-Some types of checking accounts pay interest
Neil will be traveling by air in Southeast Asia for a six-week vacation. Which step will not provide protection during the trip? Answer A-Baggage claim insurance Answer B-Take his passport Answer C-Buy flight insurance Answer D-Buy medical insurance that covers when he travels internationally
Answer B-Take his passport
Doug wants to buy a car in two months, but does not have enough money. What is the best way for Doug to get the money he needs? Answer A-Purchase a certificate of deposit Answer B-Take out a cash loan Answer C-Open a money market account Answer D-Apply for a thirty year mortgage
Answer B-Take out a cash loan
The information that a lender must disclose to consumers applying for a cash loan is: Answer A-The formula for compounded interest Answer B-The annual percentage rate (APR), and/or the finance charge Answer C-Full dollar amount being paid back on the loan over its life Answer D-The tax obligations
Answer B-The annual percentage rate (APR), and/or the finance charge
Ben's truck is crushed by a hit-and-run driver. Scott is hit by an uninsured driver. How will they receive payments? Answer A-State motorist coverage Answer B-Uninsured or no-fault motorist coverage Answer C-Insolvent motorist coverage Answer D-Auto liability coverage
Answer B-Uninsured or no-fault motorist coverage
Scott just got an ATM card to use and must choose a PIN (Personal Identification Number). How should he select a PIN that will give him maximum protection against anyone else being able to find out what the PIN is? Answer A-Use his birth date as his personal identification number Answer B-Use a random selection of letters and numbers Answer C-Use his first initial and last name as his personal identification number Answer D-Use the name of a friend, family member, or pet
Answer B-Use a random selection of letters and numbers
Which statement is FALSE about most ATM (Automated Teller Machine) cards? Answer A-You must have an account with a financial institution to have an ATM card. Answer B-You can always get cash anywhere in the world with no fee. Answer C-You can generally obtain information concerning your account balance(s) at an ATM machine. Answer D-You can generally get cash 24 hours a day, seven days a week.
Answer B-You can always get cash anywhere in the world with no fee.
Buying a treasury bill (T-bill) is best for investors who are looking for Answer A-a place to invest between $100-$500. Answer B-a secure, low risk investment. Answer C-a higher yield on their investment than corporate bonds offer. Answer D-an investment that matures in 10-30 years.
Answer B-a secure, low risk investment.
The following is usually considered a variable expense: Answer A-mortgage payment Answer B-electric bill payment Answer C-rent payment Answer D-car payment
Answer B-electric bill payment
A clear understanding of our personal values will: Answer A-encourage us to spend money on material goods Answer B-enable us to make choices that reflect what is important to us Answer C-enable us to save effectively Answer D-cause anxiety as we make consumer and financial decisions
Answer B-enable us to make choices that reflect what is important to us
When a person declares bankruptcy that fact will appear on the person's credit report Answer A-for a 3 year period. Answer B-for a 10 year period. Answer C-until the person repays all debts owed. Answer D-until the person is able to receive a new credit card.
Answer B-for a 10 year period.
An important consideration when saving money for emergencies is: Answer A-high growth potential Answer B-high degree of safety and liquidity Answer C-diversification Answer D-return on investment
Answer B-high degree of safety and liquidity
The financial planning process: Answer A-includes lifetime goals Answer B-needs to be adjusted for changing needs and goals in different stages of life Answer C-does not need to be revised for changing income and needs Answer D-guarantees that assets will increase
Answer B-needs to be adjusted for changing needs and goals in different stages of life
Our values are: Answer A-what we want to achieve Answer B-the basic principles that guide our actions and beliefs Answer C-our expectations of other people Answer D-the same as our goals
Answer B-the basic principles that guide our actions and beliefs
To determine the time value of depositing $100 in a savings account, a person needs to know the interest rate and Answer A-her total income. Answer B-the rate of inflation. Answer C-whether the account is FDIC protected. Answer D-whether the bank offers overdraft protection.
Answer B-the rate of inflation.
A company offers a defined-contribution pension plan which means that upon retirement the employee will receive Answer A-one-half of the employee's last year's salary. Answer B-the total amount of money contributed plus investment earnings. Answer C-an amount of money based only on the length of time the employee worked for the company. Answer D-a specified amount of money based totally on the profit earned by the company while the employee worked there.
Answer B-the total amount of money contributed plus investment earnings.
Ben's annual income is $30,000, and he contributed $3,000 to a traditional IRA in his local bank. What is his taxable income? Answer A-$33,000 Answer B-$30,000 Answer C-$27,000 Answer D-$0 because he contributed to an IRA
Answer C-$27,000 IRA's are TAX DEFERRED meaning it lowers your taxable income and you pay taxes when you cash them in
An investor bought 40 shares of ABC corporation's stock at $80 a share. Two weeks later, the investor receives notice that the corporation has approved a 2-for-1 stock split. Based on this information, the investor would own at the moment of the split Answer A-20 shares of the stock and the price of each share is $80. Answer B-40 shares of the stock and the price of each share is $40. Answer C-80 shares of the stock and the price of each share is $40. Answer D-80 shares of the stock and the price of each share is $80.
Answer C-80 shares of the stock and the price of each share is $40.
Lamar believes that interest rates are going to fall in the near future and remain low for a considerable period of time. She should invest in: Answer A-Nothing, she should put her money under her mattress Answer B-A variable rate certificate of deposit Answer C-A long-term, fixed rate certificate of deposit Answer D-A short-term, fixed rate certificate of deposit
Answer C-A long-term, fixed rate certificate of deposit
You used your credit card to buy flowers at the florist. The dollar amount of the purchase was: Answer A-Deducted immediately from your checking account Answer B-Added to your credit card account as a finance charge Answer C-Added to your credit card bill and you pay for it at a later date Answer D-Put on your credit card bill as a cash advance
Answer C-Added to your credit card bill and you pay for it at a later date
Nora needed to make a long-distance call from a pay phone and did not have the cash. She was able to make the call by using her: Answer A-Credit card Answer B-Identification card Answer C-Cash card Answer D-Traveler's check
Answer C-Cash card
Robyn is an investor. Which financial product makes her a shareholder in a corporation? Answer A -Bonds Answer B-Certificate of deposit Answer C-Common stocks Answer D-Bond mutual funds
Answer C-Common stocks
A blank endorsement on a check: Answer A-Has no effect on the check Answer B-Cancels the check Answer C-Creates a check that can be cashed by anyone Answer D-Restricts the use of the check
Answer C-Creates a check that can be cashed by anyone
Which type of financial institution usually pays the highest rate of interest on savings account balances? Answer A-Savings and loan associations Answer B-Commercial banks Answer C-Credit unions Answer D-Investment firm money market accounts
Answer C-Credit unions
Which of the following is considered to be open-end credit? Answer A-A mortgage. Answer B-A car loan. Answer C-Department store charge cards. Answer D-Installment loans.
Answer C-Department store charge cards.
Spreading one's assets across several types of saving and investment products to manage risk is called: Answer A-Allocation Answer B-Pooling Answer C-Diversification Answer D-Budgeting
Answer C-Diversification
New coins and currency make their way into the general economy, consumers and businesses, through the distribution system of the: Answer A-Treasurer of the United States Answer B-Secretary of the Department of Treasury Answer C-Federal Reserve System Answer D-U.S. Federal Mint
Answer C-Federal Reserve System
Banks use savings account deposits to: Answer A-Make their services and products attractive for new depositors Answer B-Pay for employee special projects Answer C-Give loans to consumers and businesses Answer D-Improve the quality of life in low-income communities
Answer C-Give loans to consumers and businesses
Which of the following does the Federal Reserve use to regulate the nation's money supply? Answer A-Fiscal policy Answer B-Proposing legislation Answer C-Monetary policy Answer D-Regulations
Answer C-Monetary policy
What is the largest equities market in the world? Answer A-American Stock Exchange (AMEX) Answer B-NASDAQ market Answer C-New York Stock Exchange (NYSE) Answer D-Over-the-counter (OTC) market
Answer C-New York Stock Exchange (NYSE)
A person has three credit cards with very large outstanding balances and is unable to make payments on any of them. Which action should the person take? Answer A-Notify a credit reporting agency in order to avoid a late fee. Answer B-File for bankruptcy in order to maintain ones current credit score. Answer C-Notify the credit card companies in order to negotiate a new payment plan. Answer D-Contact the Internal Revenue Service in order to avoid paying income tax this year.
Answer C-Notify the credit card companies in order to negotiate a new payment plan.
What should a person do when he believes he is being charged too high a rate of interest for a loan by a lending institution? Answer A-Accept the loan but pay it off early. Answer B-Ask the lending institution to lower its rates. Answer C-Notify the lending institution about state usury laws. Answer D-Notify the local Better Business Bureau.
Answer C-Notify the lending institution about state usury laws.
Ms. Jackson contacted a mortgage company about refinancing her mortgage. The mortgage company gave her a home loan with unusually high costs and without regard to her ability to repay. This practice is called: Answer A-Redlining Answer B-Low-income lending Answer C-Predatory lending Answer D-Consumer lending
Answer C-Predatory lending
Richard's auto insurance policy expired on 5/15/2002. Richard was upset with his insurance agent and decided to change insurance companies. At 10:00 a.m. on 5/16/2002, as he drove to a different agent to buy a new policy, he had an accident. Who is liable for damage to his car and his personal injuries? Answer A-The old agent Answer B-The new agent Answer C-Richard Answer D-The old agent is liable for damage to your car and the new agent for personal injuries
Answer C-Richard Richlard's insurance expired, he is liable for all damages, he was driving uninsured.
Interest earned on interest is known as: A.) Simple interest B.) True interest C.) Compounded interest D.) Variable interest
C.) Compounded interest
Insurance is frequently described as a method of "sharing the risk" because the: Answer A-Because everyone receives a bill for every accident Answer B-Every time you pay your premium, you put aside a little bit of money to pay for your accidents Answer C-Insured shares the risk of loss with all the other policy holders Answer D-Insurance does not share the risk, you are on your own.
Insured shares the risk of loss with all the other policy holders
A person's debt ratio shows the relationship between debt and net worth. The lower the ratio the Answer A-better off financially the person is. Answer B-worse off financially the person is. Answer C-more liquid assets the person has. Answer D-less liquid assets the person has.
Answer A-better off financially the person is.
A person owns a stock that pays a $2.00 a share dividend. If the person chooses to reinvest that dividend, this means that the $2.00 will go toward buying Answer A-more of the same stock. Answer B-stocks that are similar to those already owned. Answer C-preferred stock in the corporation. Answer D-bonds in the corporation.
Answer A-more of the same stock.
One of the benefits of holding an investment for over a year rather than selling it in less than a year is that the Answer A-capital gains on the investment will be taxed at a lower rate. Answer B-fees will not be charged by brokers for selling the investment. Answer C-money earned on the investment will be considered tax-free. Answer D-profits on the investment can be averaged over the length of time the investment is held.
Answer A-capital gains on the investment will be taxed at a lower rate.
The interest earned on United States Series EE Savings Bonds is Answer A-exempt from state and local taxes. Answer B-paid in a lump sum at the time the face value on the bond is reached. Answer C-equal to the money paid to purchase it. Answer D-deducted at the time of the bond's purchase.
Answer A-exempt from state and local taxes.
The annual percentage rate (APR) is: Answer A-The true cost of credit that must be disclosed on a loan agreement Answer B-Always expressed in dollars Answer C-Required by the Securities Exchange Commission Answer D-Required by the Comptroller of the Currency
Answer A-The true cost of credit that must be disclosed on a loan agreement
If a person makes a deposit of $10,000 or more into a bank account, the bank must notify the Answer A-US Treasury Department. Answer B-Federal Deposit Insurance Corporation. (FDIC). Answer C-State Banking Commission. Answer D-Federal Reserve Board.
Answer A-US Treasury Department.
If you have a managed health care plan, it means that you: Answer A-Usually must first meet with your primary health care physician Answer B-Can go to any doctor at any time Answer C-Will be responsible for $100 of a doctor bill Answer D-Can apply for an 80% reimbursement of the amount paid to the doctor
Answer A-Usually must first meet with your primary health care physician
A high school student has begun to investigate the field of finance as a career choice. In deciding about the field, the student should focus on which question first? Answer A-Will I find a balance between financial rewards and personal satisfaction from work? Answer B-How many people do I know who work in this field? Answer C-Once I train for this area, how long before I will be at the top of the field? Answer D-Are there people in this field who are dissatisfied with their jobs?
Answer A-Will I find a balance between financial rewards and personal satisfaction from work?
Who benefits the most from inflation? A.) Long-term fixed rate borrowers B.) Lenders C.) Persons on fixed incomes D.) The government
A.) Long-term fixed rate borrowers
When a person brings an item to a pawn shop to obtain cash, the transaction is considered Answer A- collateralized loan. Answer B-a custodial payment. Answer C-an unsecured loan. Answer D-a sales agreement.
Answer A- collateralized loan.
A woman has just received a very expensive piece of jewelry. The woman has homeowner's insurance. Which statement would it be most appropriate for her to make to her insurance agent? Answer A-"I think I need a personal property floater." Answer B-"I think I should get speculative risk insurance." Answer C-"I will deduct the cost of the jewelry from my premium." Answer D-"I realize that if this jewelry is stolen it will be considered vicarious liability."
Answer A-"I think I need a personal property floater." A personal floater is additional property insurance, which is available within a homeowner's policy, to cover damage or loss of a specific item of value.
The denominations of coins in the United States are: Answer A-$.01, $.05, $.10, $.25, $.50, and $1.00 Answer B-$.01, $.30, $.50, and $5.00 Answer C-$.05, $.10, $.50, $.75, and $10.00 Answer D-Coins can be in any denomination a consumer desires
Answer A-$.01, $.05, $.10, $.25, $.50, and $1.00
Purchases made with your debit card are usually: Answer A-Deducted immediately from your checking account Answer B-Deducted from your credit card balance Answer C-Added to your credit card balance Answer D-Put on your credit card bill as a cash advance
Answer A-Deducted immediately from your checking account
Which of the following is the federal law that requires the cost of credit be disclosed to consumers in bold print on loan agreement? Answer A-Fair Credit Reporting Act Answer B-Equal Credit Opportunity Act Answer C-Truth in Lending Act Answer D-Fair Debt Collection Practices Act
Answer A-Fair Credit Reporting Act Reason : The Truth in Lending Act requires that the finance charge and annual percentage rate be disclosed to the consumer in advance and specifies how the annual percentage rate must be calculated.
A stock broker or financial consultant: Answer A-Gives financial advice to clients Answer B-Sells money orders and certified checks Answer C-Guarantee a return on investment Answer D-Do not have to be licensed
Answer A-Gives financial advice to clients
A person buys a homeowner's insurance policy with a $250 deductible, which means the person will: Answer A-Have to pay the first $250 which will be deducted from the claim settlement paid by the insurance company. Answer B-The person has to pay all of the settlement except for the last $250. Answer C-The person is liable for the middle portion of $250. Answer D-The insurance company must pay for the whole claim.
Answer A-Have to pay the first $250 which will be deducted from the claim settlement paid by the insurance company.
The cost to use someone else's money for a period of time is called the: Answer A-Interest rate expressed as a percentage Answer B-Opportunity cost Answer C-Minimum payment Answer D-Inflation rate
Answer A-Interest rate expressed as a percentage
The price of the Candy Corporation stock will generally increase when there is: Answer A-Positive news about corporate earnings Answer B-Investor confidence is declining Answer C-Investors are bullish on the health sector Answer D-Interest rates are rising
Answer A-Positive news about corporate earnings
The amount of money that is originally borrowed from a loan is called? Answer A-Principal Answer B-Annual Percentage Rate (APR) Answer C-Loan Balance Answer D-Finance Charge
Answer A-Principal
The process of setting aside money and putting it to work by having it earn interest or dividends or gain value in the equities market with the idea of having additional funds to use in the future is described as: Answer A-Saving and investing Answer B-Making money Answer C-Setting goals Answer D-Diversifying
Answer A-Saving and investing
If a person has $1,000 in a savings account and earns $20 a year in interest on that account, the rate of return on the money is close to... A.) 5% B.) 2% C.) 10% D.) 20%
B.) 2%
Why might rising interest rates depress stock prices: A.) Stock investors are lured away from interest-paying investments to stocks B.) Rising interest rates can result in lower business profits C.) Rising interest rates usually means the economy has less D.) Rising interest rates can result in higher business profits
B.) Rising interest rates can result in lower business profits
Money received today is worth more than the same amount of money received amount of money received sometime in the future is: A.) The rule of 72 B.) The time value of money C.) Not true D.) Investing
B.) The time value of money
