Building Wealth
Which of the following is NOT considered a positive outcome of estate planning?
Ability to increase time, effort and dollar costs incurred by survivors
Eric has chosen Amanda to be the beneficiary of his life insurance policy. What does this mean for Amanda?
Amanda will receive any proceeds if Eric dies
Healthy giving occurs when:
An individual wants to give back and the result is positive emotions for both the giver and receiver
Caitlyn's parents were rushing off to a meeting to get some help planning their estate. When Caitlyn asked who they were meeting with, her parents likely told her they were going to the office of:
Any of the above
Langley wants to be able to use funds in her checking account but finds going to the bank to withdraw cash to be inconvenient. She would like a more effective way to access her checking account funds. What would you suggest she do?
Apply for a debit card. That way she can use the card instead of cash to purchase the things she needs and the amount spent is immediately deducted from her account
Autumn is currently working in Kansas City, MO earning $30,000 per year. She is offered a position in Indianapolis, IN earning $32,000 per year. If Kansas City's Cost of Living Index is 100 and Indianapolis' Cost of Living Index is 125, which is true?
Autumn will have more spending power if she stays in Kansas City.
Johnny is researching the topic of property taxes for a presentation he is doing in his Personal Finance class. He has come across the following statements he is considering adding to his presentation. Which should he EXCLUDE from his presentation because it is NOT correct?
Property taxes are assessed at the same rate for all types of property, including homes, land and building, regardless of location or whether they are used for business or personal use
Piper earns $62,000 per year and has a net worth of $20,000. Josie earns $96,000 and has a net worth of $15,000. Who is wealthier?
Piper, because her net worth is higher than Josie's
What is the diffference between property and liability insurance?
Property insurance pays for loss to the insured person whereas liability surance pays for loss to other people
Why is investing in product research an important part of the planned buying process?
Research enhances satisfaction
Paxten is purchasing a new phone online. What is the best tip he should consider to do so safely and maximize his satisfaction?
Review shipping and return policies in advance
Charis wants to decrease the risk of fraudulent use of her credit cards. Which strategy would be the most effective?
Signing the back of her card with her signature and "Please see picture ID"
Steven is moving into his first apartment in a few weeks and has been busy packing. In addition to the things he has purchased with money earned from his full‐time job, his parents have told him that he can take the furniture in his bedroom and his bedding when he moves out. His parents are providing him with which type of income?
in-kind income
Insurance can be purchased to protect one from which of the following losses?
Health care expenses
Shelby is working on her spending plan and would like to spend less on her food for 6 months as she saves toward purchasing a more reliable vehicle. As she makes her plan, which factor would be least important to consider:
Her personal preferences
Tiffany was recently involved in a vehicle accident. In order to get her car fixed, her insurance company is requiring her to pay the first $500 of the repair bill because:
Her policy's deductible is $500
Individuals with more formal educational training usually have:
Higher estimated lifetime earnings
Highland has been offered a job by a local mechanic who has offered to pay him in cash rather than by paper paycheck, direct deposit, or payroll card. Highland is excited that the amount of money he will take home each week will be larger since his employer won't be deducting any taxes from it. His employer wants to hire him for the 10 weeks of his summer break and expects to pay him $300 per week. Which statement below is most likely to be true?
Highland will not need to pay taxes on the income from his summer job because the total amount he will earn is under the amount required for federal tax deductions.
Which of the following questions does NOT represent a topic teens should ask parents and guardians about Estate Planning?
How much money do you have in your checking account?
Kadyn is a high school computer and technology teacher. She enrolls in a computer class at least twice per year to stay current on recent technology changes and updates. By continuing her education, Lora is investing in her:
Human Capital
It is recommended that life insurance be purchased when the:
Individual has dependents
Which of the following best describes the benefits of having insurance?
Insurance combined with emergency savings provides a sense of financial security and peace of mind
Which of the following is an act of identity theft?
Wrongfully acquiring and using someone's personal identification
When making food decisions, which of the following is most likely to be least expensive?
Convenience foods
The average cost of basic necessities, such as housing and food for a particular city is called the:
Cost of living
To answer the essay test question about the meaning of open‐end credit, Ryan should include which statement?
Credit is extended in advance so the borrower does not have to apply for credit each time credit is desired.
In which scenario below should renters insurance be considered?
Zach and Leah have rented an apartment in an urban area.
A rental agreement is often referred to as
a lease
Bob is working for a bank. He earns $8.00 an hour, works 40 hours a week, and gets paid every 2 weeks. Every pay period he pays $63.08 into federal withholdings tax, $33.21 into state withholdings tax, and $42.05 into FICA (Social Security Tax). What is Bob's NET PAY on his paycheck?
$501.66
James received his first medical bill of the year. It was a total of $1000. His health insurance policy has a $500 deductible and a 20% co-insurance. How much of the medical bill will James be responsible to pay?
$600
Bob is working for a bank. He earns $8.00 an hour, works 40 hours a week, and gets paid every 2 weeks. Every pay period he pays $63.08 into federal withholdings tax, $33.21 into state withholdings tax, and $42.05 into FICA (Social Security Tax). What is Bob's GROSS PAY on his paycheck?
$640.00
Sally is researching a new tablet and conducting research using a variety of sources. What is an example of an unbiased source?
A product review from an independent company
Brett borrowed money to purchase a vehicle without making a down payment and now he owes more on the vehicle than it is worth. This situation is referred to as:
Being upside down on the loan
Erica is an active member of the Silver Cord program at her school. Through this program she commits to completing at least 25 hours of community service each year of high school. Her advisor has encouraged her to explore volunteering with non-profit organizations. Which of the following would qualify as a non-profit?
Big Brothers/Big Sisters
What is NOT an example of a durable good?
Food
Which is a general rule to minimize identity theft when dealing with credit reports?
Check each credit report at least once per year.
A key difference between commercial banks and credit unions is that
Commercial Banks are 'for-profit' and credit unions are 'not-for-profit'
One's lifestyle is to their Standard of Living as present is to __________________?
Future
Diana has faced the fact that she and her family need to explore assistance programs they might qualify for during the time she must be off work following an accident. How might she and her family locate an appropriate program?
Go to www.govbenefits.gov
Sophie is reviewing her pay stub to determine how much money she earned before her deductions were subtracted. Which column should she check to find this amount?
Gross Income
David earns $5000 per month at his accounting job. He has a student loan payment of $120, a car loan of $300. Which statement is true?
David's credit payments are within the safe range for someone with his income.
If expenses were to exceed income on a spending plan, what would be a financially smart solution?
Decrease expenses
Since Taylor was a young child she has kept her savings in a piggy bank. She likes this method of saving because she can have immediate access to the money if she needs it. Recently, in a class at school, discussion focused on why depository institutions are safer than her piggy bank. Some students' comments were based on fact while others were based on myths. Which aspect of security at a depository institution is NOT TRUE?
Depository institutions have insurance protection. Depositors can have multiple accounts insured at the same depository institution as long as each account has no more than $100,000
Alyssa is considering purchasing a car and wants to be sure she can afford to drive it during the school year when she doesn't have a job. Which expense WOULD NOT be considered part of the total transportation expenses?
Depreciation
The most secure method for an employer to pay employees is to use:
Direct Deposit
Employment opportunities for Jackie and David are limited, but they both have jobs earning just a bit more than minimum wage. Which federal program will encourage them to file a tax return by offering a financial incentive to them?
Earned income tax credit
Jayce is writing a paper on the importance of investing in yourself and he is looking for a sentence to use as the thesis statement for his paper. Which sentence below would be the best choice?
Education pays in higher earnings and lower unemployment rates.
Steven is considering taking a job with a company that is offering gym memberships, flexible hours, repayment of education loans, merchandise discounts, and childcare. These components of the job offer are called:
Employee benefits
Leah is trying to explain the difference between open‐end and closed‐end credit to her roommate. Which statement should she include in her description of closed‐end credit?
Equal payments are required on a regular basis unti lthe loan is repaid
Planned giving can occur through:
Estate planning activities
Perry would like to purchase a new car. What should he consider first in the planned buying process?
Evaluate the opportunity cost and trade-offs to purchasing the car.
Taxes that are charged on consumption items such as gasoline, hotel rooms, and airline tickets are called _______________ taxes.
Excise
If a person drives an automobile, they are required by law to have Automobile Liability Insurance. In which situation would this type of policy protect the policyholder?
James backed into a vehicle in the grocery store parking lot and caused $2000 in damages to his own and $3000 in damages to the other vehicle.
The financial counselor that Ariel consulted about her use of credit recommended that she keep her use of credit within safe boundaries. Ariel's financial counselor most likely told her to:
Keep the total amount of money she has borrowed, not including her house, under 20% of her net income.
Common fees that may be charged by a depository institution include all EXCEPT:
Late fee
Gross income - deductions = ___________________
Net Income
The ________________________ of continuing your education is the money you would have earned if you would have worked instead.
Opportunity cost
Fisher made a mistake in his checking account record keeping and spent $10 more than he had deposited in his account. As a result, he can expect to be charged a(n):
Overdraft fee
When Rob graduated from college he considered two different job offers before accepting his job as an accountant in the IT department of a local manufacturing plant. He loves that he can walk or ride his bike to work each day. He also loves to travel and his job will require him to travel several times each year to conduct audits in manufacturing plants throughout the US, Europe, and Asia. He receives a monthly salary and his employer pays his health insurance. His employer also matches the funds he saves in his personal retirement account. Rob has always been very healthy but he appreciates knowing that he has several days of paid sick leave each year if he needs them, along with 1 week of paid vacation. His company is encouraging him to complete the classes he needs to earn his CPA by paying for half of the tuition for the classes he needs to take. Answer the following questions about Rob and his job: Rob's parents asked him what employee benefits his employer was providing. Which would be considered employee benefits?
Paid sick leave
Patty recently moved into a new apartment with her friend Emma. Who is responsible for purchasing renter's insurance?
Patty and Emma
The regular schedule that employers pay their employees is called the __________.
Pay period
Which of the following actions will not make an individual vulnerable to identity theft
Paying cash for a movie ticket
Which statement is TRUE about Payroll Taxes?
Payroll taxes fund the Social Security and Medicare programs
Matt wants to guard his personal information. Which personal information is LEAST LIKELY to be used by scammers?
Phone numbers
When Rob graduated from college he considered two different job offers before accepting his job as an accountant in the IT department of a local manufacturing plant. He loves that he can walk or ride his bike to work each day. He also loves to travel and his job will require him to travel several times each year to conduct audits in manufacturing plants throughout the US, Europe, and Asia. He receives a monthly salary and his employer pays his health insurance. His employer also matches the funds he saves in his personal retirement account. Rob has always been very healthy but he appreciates knowing that he has several days of paid sick leave each year if he needs them, along with 1 week of paid vacation. His company is encouraging him to complete the classes he needs to earn his CPA by paying for half of the tuition for the classes he needs to take. Answer the following questions about Rob and his job: When Rob compared the Cost of Living Index for the city he currently lives in with the city where the other job was located, the index for his city was 106 and the index for the other city was 78. Which statement is most likely to be TRUE?
Rob chose his current job for reasons other than a lower cost of living.
Medicare is provided by the Federal Government for individuals in specified circumstances. In which of the situations below would the individual most likely be receiving Medicare funds.
Rosie is 67 years old and in need of a health insurance program.
Which federal program assists low income families in purchasing nutritious foods?
SNAP
As Emily was looking over her sales receipt for the shirt she bought at a retail store, she discovered that she was charged 6% more than the price tag showed for the item. What is this extra 6% charge most likely to be?
Sales tax on the shirt she purchased
Sarah will turn 18 next month. She plans to apply for a credit card. Which statement is true?
Sarah can only obtain a credit card if she has a co‐signer or proof of sufficient income to make the required payments.
To be considered for lifelong employment a person must continually maintain their employability. Three actions below will help to maintain employability. Which one WILL NOT?
Seek ways to blend your personal and professional images online to enable current and future employers to see that you have a varied and interesting life both in and outside of work.
Who is Medicare designed to help?
Senior Citizens
Melissa needs a vehicle and is considering leasing one. This means:
She would be renting the vehicle by making payments over time, although the vehicle title would remain with the lease grantor.
Seleh is saving money to purchase a new computer before she leaves for college in two years. She wants to open a special account at a depository institution to keep her saved money safe. She has asked you for advice on which type of account would be best for her. What would be the best advice for Seleh?
Shop around for the depository institution with the highest interest rates for their savings accounts. She would be able to make regular savings deposits and earn interest while she is saving up for the computer
Josie has been challenged by her academic advisor to 'develop some human capital' this school year. Which activity below would be the LEAST effective way to reach that goal?
Spend additional time playing video games to further develop her hand-eye coordination.
When is your spending plan complete?
Spending plans are always under revision so they are never complete
Julie is a single mother who recently lost her job. She would like to obtain training in the medical field in order to increase her future income and support her two children. In order to do this, she will need help paying some of her expenses while she is going back to school. Which government program might offer her temporary assistance to help with living expenses and job training?
TANF
Carson's wallet with his driver's license, a debit card and his credit card has been stolen. Which of the following is NOT something an identity thief might realistically do with this information?
Take a college admissions exam in Carson's name.
Due to unexpected circumstances, Ariel is temporarily receiving income from a government assistance program. The funds she receives through the government program are most likely funded by:
Taxes at the local, state, and federal levels
Christian is developing an Income & Expense Statement. He has gathered all his receipts, bank statements, paycheck stubs, and spending records. He needs to categorize them into income and expenses. Which should be recorded as expenses?
Taxes deducted from his paycheck, money saved from his paycheck for emergencies, and his car insurance
Which of the following statements would be true in most states:
Teens under the age of 18 may not write their own will
Langley learned in her Building Wealth class that she needs to consider the Cost of Living when comparing job offers. Which statement most accurately describes a Cost of Living consideration?
The average cost of basic necessities, such as housing and food in the city where her new job is.
Which statement is NOT TRUE about property taxes?
The property tax rate is set by the federal government to be equal in every state
Which statement is true of government assistance programs?
The ultimate goal of government programs is for individuals to become self‐sufficient and independent
Tyler is trying to be responsible in using his new credit card and has heard there is a way to avoid paying interest on the things he charges. How can he LEGALLY avoid paying interest when using his credit card?
Tyler needs to pay the credit card balance in full every month before the due date listed on the credit card statement.
Ashley plans to do some of her Christmas shopping online. What is a safety tip to follow when she is shopping online?
Use a credit card
An example of a transferable skill is a skill:
Used in your job that you acquired through past jobs, volunteering, hobbies, school sports, or other life experiences.
Megan's credit card statement indicates that she is now paying a Penalty APR. Which scenario best describes what may have happened?
When Megan was participating in her college's Study Abroad program, she left a friend in charge of sending in her January and February payments. Her friend forgot to send the payments.
Savings tools offered by depository institutions may earn interest. Which of the following statements is NOT TRUE about interest?
When earning interest, look for low rates
Evan is writing a scholarship essay about the importance of responsible money management. He wants to explain the meaning of borrowing. Which statement below would explain the importance of understanding the process of borrowing money?
When you are borrowing, you are spending future income.
Carson is working to develope a broad base of transferable skills. This means that he:
Will have a set of versatile skills that he can apply to many personal and professional roles
As part of Nicholas' new job, his employers will provide health, life, and disability insurance. Access to this insurance is provided in addition to his regular salary. This is known as:
employee benefits
Paying the minimum payment on a credit card every month will
make the final amount paid substantially higher than the amount initially charged to the card.
Maggie will need to pay $120 per month in order to purchase a health insurance policy. This monthly payment is known as the:
premium
Chad has decided to rent an apartment and is gathering information to be sure he has enough money saved for all his move‐in expenses. His landlord explained to him that he would need to pay a fee to cover any potential damages that might occur while Chad is living in the apartment. This fee is called the:
security deposit
Alyssa's childcare provider called to tell her that the provider's young daughter woke up ill and she won't be able to care for Alyssa's son today. Alyssa's friend, who is a stay‐at‐home mother, agrees to care for Alyssa's son today so Alyssa can go to work. Alyssa has utilized: 2/2
social capital
Rent is defined as:
the cost of using someone else's property
The equity that you build by making mortage payments is:
the value of the home after the mortage debt is subtracted
