W!SE Questions
A woman has just received a very expensive piece of jewelry. The woman has homeowner's insurance. Which statement would it be most appropriate for her to make to her insurance agent?
"I think I need a personal property floater."
The denominations of coins in the United States are:
$.01, $.05, $.10, $.25, $.50, and $1.00
One of Andre's seldom-used credit cards has been stolen without his knowledge. When he gets his monthly statement, he realizes that someone else has been using the card and reports it stolen. The maximum amount of the unauthorized purchases he is he liable for is:
$50
Lisa lost her debit card. She did not report it missing for one week. If an unauthorized person used her debit card, her maximum liability is:
$500
Last year Kelly and Matt began placing $100 a week into an interest-bearing savings account at their bank. At the end of the year, the couple had saved $5,200 and had earned $273. What form will the bank provide both the IRS and Kelly and Tom stating the interest earned on their account during the tax year?
1099-INT
You have a checking account balance of $100 and you deposit a personal $200 check from your brother in your checking account. When will you be able to withdraw $150 in cash?
3 to 7 days later, depending on your bank's check clearance policy
Predatory lending practices do not include which of the following:
A loan that you can afford with an interest rate that is the same as the interest rate being charged by at least three other financial institutions
The most liquid type of investment is:
A money market account
What is a credit score?
A number used to determine how much credit to extend to a person
What is meant by an uncollateralized loan?
A personal loan without assets to cover the loan amount
Money orders are:
A purchased certificate to pay a specified amount to a specific payee
Troy has $50 a month transferred electronically from his checking account to his savings account. This is an example of:
A savings plan
You used your credit card to buy flowers at the florist. The dollar amount of the purchase was:
Added to your credit card bill and you pay for it at a later date
The activity of the New York Stock Exchange most closely resembles:
An auction house
John's job provided the main income for his family. He died unexpectedly and had no life insurance. The probable financial consequence for his wife and two children does not include:
An increase in income and expenses
Mutual funds are:
An investment that holds a wide range of different investment instruments, providing diversification
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:
Annual deductible
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:
Annual percentage rate (APR)
Which of the following insurance covers vehicles?
Automobile
A creditor may deny credit because of:
Bad credit history
How can you protect yourself against credit card fraud?
Be extremely careful about disclosing account information to unsolicited callers
When the market has a steady incline in stock prices over a period of time, it is known as a:
Bear market
When a corporation or government agency borrows money from an investor and pays interest and principal to that same investor, it is a:
Bond
David bought stock for $4,000 and one year later he sold it for $1,000. The sale resulted in a:
Capital loss
Which financial product has the most predictable income?
Certificate of deposit
Which financial product typically pays the highest rate of interest?
Certificate of deposit
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?
Certified check
Which financial product may pay a dividend?
Common stock
Erika and Mark received an inheritance of $100,000. They plan to invest their inheritance money to buy a house in six years. Which of the following carries the greatest risk?
Common stocks
A factor that is likely to affect the market price of a stock is:
Corporate profits
A blank endorsement on a check:
Creates a check that can be cashed by anyone
Using someone else's money, promising to repay at a future date, and paying a fee for use of the money, is the definition for:
Credit
Pat has a savings account and a car loan from a not-for-profit financial institution owned by its members. She is probably a member of what type of financial institution?
Credit union
The National Credit Union Administration (NCUA) insures accounts in:
Credit unions
Mr. Akon's wife died. The money he received as the beneficiary on her life insurance is called the:
Death benefit or face value
Sally took out a $50,000 life insurance policy. The $50,000 amount of coverage is called the:
Death benefit or face value
Consumer Credit Counseling Services (CCCS) offer:
Debt repayment plans
What action should a person take who must make a tuition payment at the end of August each year?
Decide how much money will be needed and then place 1/12th of that amount in a separate account each month.
A Neon Oil Corporation tanker spilled oil in the ocean around Australia. As a result of this accident, the share price of this stock is likely to:
Decrease
Purchases made with your debit card are usually:
Deducted immediately from your checking account
You have a $2,000 loss. Your insurance company pays you $1,500 on the claim for the loss. The $500 the insurance did not pay is a result of your policy having a:
Deductible
Which of the following is considered to be open-end credit?
Department store charge cards
When a person is reconciling a checking account and notices that the balance in the checkbook does not match the balance on the statement from the bank, which action is it appropriate for the person to take first?
Determine that checks already written have cleared
George received a dividend from the company in which he is a stockholder. A dividend is:
Distribution of part of the company's profit
The purpose of Insurance is NOT to:
Diversify an investment portfolio
Javier and Caterina are first time homebuyers and can place a 10 percent down payment on a home costing $70,000. For what type of mortgage do they qualify?
FHA mortgage
By January 31 each year every U.S. employer must provide each of its employees with a summary of each employee's earnings and withholdings. Employees then use and enclose a copy of this form with their tax forms in reporting their individual taxes. This form is known as ____.
Form W-2
If you are denied credit based on your credit report, you are entitled to a:
Free copy of the credit report if you request it within 60 days
Travelers checks, often used for vacations:
Function as cash and are easily replaced if lost
Banks use savings account deposits to:
Give loans to consumers and businesses
John has a college student loan that he has to repay after he graduates. He will make his monthly payments over ten years. He has the following kind of loan:
Installment
Insurance is frequently described as a method of "sharing the risk" because the:
Insured shares the risk of loss with all the other policy holders
A cash card generally:
Is purchased with a specific amount of money that can be used to pay for goods or services
Which factor would most likely lead to an increase the interest rate on a person's credit card?
Late payments
When you mail your credit card payment on the due date, your payment will be considered:
Late, and the company will assess you a late fee
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?
Liability insurance
The term used to describe the ease and speed with which you can convert savings or an investment to cash is:
Liquidity
Lucy has no insurance. The situation(s) should she consider insuring against first are:
Losses resulting from an illness, accident, or disability
The Equal Credit Opportunity Act:
Makes it illegal for creditors to grant credit on any characteristics other than those that reflect creditworthiness
The phrase used for putting money into a savings account is:
Making a deposit
When Jessie needs health care, she must first go to her primary care physician who coordinates her care and decides whether Jessie should see a specialist. Jessie pays $10 as the co-pay when she sees her primary care doctor. Jessie has which type of health insurance?
Managed care health plan
The best reason for depositing money in a bank or credit union savings account instead of keeping your money "under the mattress" is that:
Money deposited in savings accounts are F.D.I.C. insured
Which documents should be stored in a safe-deposit box?
Mortgage loan papers
Susan gives Marie her ABC Credit Union debit card and personal identification number (PIN) so Marie could get $25 from Susan's bank account. Marie withdrew $100 instead of the agreed to $25. How can Susan get the $75 back?
No bank or government agency is obligated to reimburse Susan because she authorized Marie to use her ATM card and PIN
Matt's wallet, with all his credit cards, was stolen. He needs to:
Notify each credit card company immediately
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?
Notify the credit card companies in order to negotiate a new payment plan
Ellen, Barbara, and Paul all charged $1,000 on their credit cards last year. Who paid the most in finance charges?
Paul, who only pays the minimum amount each month
Which of the following lenders charge the highest interest rate?
Pawn shop
Which statement does NOT accurately describe a characteristic of cash value for whole life insurance?
Policy that accumulates cash value is less expensive than a policy that does not accumulate cash value
Gwen receives a bill from her auto insurance company, and she sends a check to the company to make sure her policy is not canceled. The cost of her policy is called the:
Premium
Margaret wants to store a valuable coin collection and important papers. Generally, consumers should:
Rent a safe deposit box for their valuables
Sue bought a copy of her credit report, and found incorrect information in it. She can:
Request that the credit bureau correct her credit report
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?
Richard
Safe-deposit boxes are:
Safe and can be accessed only by the owner of the box
How can individuals be prepared for losing their job or having a large medical expense?
Save at least three months of income
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?
Savings account interest is taxable
Financial services and products generally offered by banks and credit unions include:
Savings and loans
A bank Certificate of Deposit is a:
Savings instrument that requires a deposit for a period of time during which there is a penalty for withdrawals
A government report indicated that the use of Pax's aspirin-free painkiller resulted in 100 cases of stomach poisoning. A large number of Pax's stockholders are likely to:
Sell shares causing the price of the stock to decline
Which financial product can you buy for $25, is safe, and will be worth $50 at a future date?
Series EE savings bond
Consumer finance companies, which are often advertised on TV, are also known as:
Small loan companies
Joan wants to open a checking account and wonders if checking accounts pay interest. How would you answer her question?
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?
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?
Take out a cash loan
The only type of life insurance that does not develop a cash value is:
Term life insurance
"The Fed" is short for:
The Federal Reserve System
You can continue to charge purchases on your credit card when:
The amount you owe on the card is below your credit limit
When a borrower fails to repay a loan and there is a co-signer on the loan, the most likely result will be
The co-signer will be held responsible for the repayment of the entire loan plus fees or penalties
A credit card finance charge is:
The dollar amount it costs to use credit
Victims of predatory lending practices are typically:
The elderly and people with a poor credit history
Employees prefer direct deposits because:
The money is generally deposited in their checking account sooner than it would be if they had to deposit it in person
Why is term life insurance usually the least expensive type of life insurance?
The policy only pays a death benefit
The financial institution where Ms. Sanchez has her checking account will continue to pay out money for the checks she writes as long as:
There is enough money in Ms. Sanchez's account to cover the amount of the checks
You are behind on your debt payments and go to a responsible credit counseling service, the Consumer Credit Counseling Services. How can they help you?:
They can work with those who loaned you money to set up a repayment schedule you can afford to make
When James received his paycheck, he planned to cash it at a check cashing store. You advise him to cash it at his own bank if possible. Why?
They typically charge high fees
A person buys a flat screen, plasma, theater-like television. The person has homeowner's insurance. Why would it be appropriate to add a personal property floater to that insurance?
To cover the cost of replacement should the television get damaged or stolen.
If a person makes a deposit of $10,000 or more into a bank account, the bank must notify the
US Treasury Department
Ben's truck is crushed by a hit-and-run driver. Scott is hit by an uninsured driver. How will they receive payments?
Uninsured or no-fault motorist coverage
The definition of credit is:
Using someone else's money, promising to repay in the future for a fee
If you have a managed health care plan, it means that you:
Usually must first meet with your primary health care physician
After completing her course work at a local business college, Yvonne applied with several companies for work as an administrative assistant. She successfully obtained a job with a marketing research company, and today is her first day on the job. She is scheduled to meet with the Human Resource Manager and complete some additional forms and paperwork. What is the form that she will complete that will provide her new employer with the information it will need to deduct the proper amount of withholdings from her paychecks?
W-4
Which is the best example of a way to reduce fees paid for ATM transactions?
When making supermarket purchases with a debit card, a person adds $50 in cash to the transaction instead of using an ATM machine.
Which statement is FALSE about most ATM (Automated Teller Machine) cards?
You can always get cash anywhere in the world with no fee
For the past five years, a person has had a $20,000 whole life insurance policy that has a cash value clause. The person decides to surrender the policy. At the time of surrender, the person will receive
a calculated amount of money which includes the premiums paid as well as the interest on that money
When a person brings an item to a pawnshop to obtain cash, the transaction is considered
a collateralized loan
When Britney was talking with a car salesperson regarding a lease agreement, she learned she would have to make an initial payment to cover the cost of setting up the lease. This fee also included a security deposit that is refundable at the end of the lease. This fee is known as a(n) ____.
acquisition fee
Pilar earns $26,200 before taxes working full-time as a police officer. She also earns an additional $9,600 before taxes working part-time on the weekends as a security guard at the apartment complex where she lives. Her combined income of $35,800 before taxes is known as her ____.
adjusted gross income
The collection of fees that cover the tasks of the lender in regard to your loan for the house is the ____.
closing costs
A savings account earns the greatest amount of money when the interest on the account is compounded
daily
One example of a long-term retirement goal is to:
deposit at least $100,000 in a retirement account
Franco has been leasing a car from a local dealership. At the end of his three-year lease agreement, he will pay a fee that will cover the cost of getting the car ready to sell or lease to someone else. This fee is known as ____.
disposition fee
For five years Saleem and Tanesha have been paying on their home mortgage. Currently, they owe $75,000; however, the current market value of their home is $83,000. The difference between what their home is worth and what they owe on their mortgage is known as ____.
equity
Taxes on property that will be inherited by those legally entitled to a deceased's person's estate are called ____.
estate taxes
The equilibrium price for a product is the price at which the quantity supplied is ____.
exactly equals the demand
Although Juro and Matsuko have a limited combined income, they know their income will increase substantially once Matsuko completes her medical engineering degree. Rather than continue to live in an apartment, they have saved money toward the down payment on a home. What type of mortgage will allow them to make smaller payments now and larger ones later when their income does increase?
fixed-rate mortgage
When a person declares bankruptcy that fact will appear on the person's credit report
for a 10 year period
To qualify for a Federal Housing Administration (FHA) loan, a person must generally
fulfill income guidelines
The amount you earn before taxes are withheld is your ____.
gross income
A person buys a homeowner's insurance policy with a $250 deductible, which means the person will
have to pay the first $250 which will be deducted from the claim settlement paid by the insurance company
The amount the dealer paid to buy the car from the manufacturer is the ____.
invoice price
A person is depositing $20 in cash and a check for $50. On the checking account deposit slip, the person should
list the cash deposit separately from the check as well as the total of the deposit
Generally, the higher the deductible on an insurance policy, the
lower the premium
Advertising that is designed to appeal to your emotions to influence you to buy is called ____.
persuasive advertising
When a self-employed person decides to purchase disability insurance it is generally to
protect against the financial effects of not being able to work
A teenage boy has opened a checking account. He is surprised to find that though he is getting a written bank statement each month he is not getting his canceled checks returned. The teenager should be aware that the reason canceled checks are NOT returned is to
save the bank money associated with returning copies of these checks.
The quantity of a product that producers are willing and able to make available for sale at various prices over a given time period is said to be ____.
supply
Neil works as a waiter at the Bistro Restaurante and receives $150 a week in gross income. He earns approximately another $100 a week in tips. His combined pre-tax income is, therefore, $13,000. After exemptions and deductions the figure he uses to calculate his taxes is $11,050. This figure is known as Neil's ____.
taxable income
