Econ Mid term

When developing a savings plan, which is TRUE about saving and inflation? a. In order to avoid losing purchasing power over time, the rate of return for savings accounts should be at least as high as the rate of inflation b. In order to avoid losing purchasing power over time, the rate of return for savings accounts should be lower than the rate of inflation c. To maximize saving, the rate of return for savings accounts should be exactly equal to the rate of inflation d. There is no relationship between saving and inflation

a. In order to avoid losing purchasing power over time, the rate of return for savings accounts should be at least as high as the rate of inflation

All of the following statements about private student loans are true EXCEPT... a. Part of the interest charged is subsidized by the U.S. government b. You need to start paying them back as soon as you accept them c. Their interest rates can be variable or fixed d. They are unlikely to be eligible for student loan forgiveness

a. Part of the interest charged is subsidized by the U.S. government

How does the interest rate on a loan compare for someone with excellent credit compared to someone with poor credit? a. Interest rates are the same regardless of credit score b. Interest rates are lower for someone with excellent credit c. Interest rates are higher for someone with excellent credit d. Interest is not charged for someone with excellent credit

b. Interest rates are lower for someone with excellent credit

Three of these statements reflect payday loans. Choose the other statement, which is aligned with a traditional bank loan instead. a. Easy to obtain without a lot of paperwork b. Requires a credit check and suitably high credit score c. Requires payment in full in less than a month d. APR can easily be over 200%

b. Requires a credit check and suitably high credit score

Ideally, which repayment plan would you choose in order to pay the lowest total amount of interest? a. Standard b. Graduated c. Extended d. Income-driven

a. Standard

Which type of retirement account is an investment option for ANY young person? a. Traditional IRA b. Pension c. 401(k) d. Social security

a. Traditional IRA

All of the following appear on your credit report EXCEPT... a. Your checking account balance b. Student loan payment history c. Balance owed on a car loan d. Number of active credit accounts

a. Your checking account balance

It is best to avoid these in order to improve your payment history... a. Credit cards without a rewards program b. Late payments c. Banks that only offer one type of credit card d. Payments greater than the minimum required

b. Late payments

Which of the following statements BEST describes the stock market? a. Businesses listing their entire company for sale b. Businesses selling partial ownership of their companies to raise capital c. Investors buying stock in hopes of being hired by companies d. People making donations to companies that need funding

b. Businesses selling partial ownership of their companies to raise capital

In retirement, it's common to rely on income from all of the following sources EXCEPT... a. Social Security b. Pension Income c. Government loan d. Investment Income

c. Government loan

All of the following purchases can be impacted by your credit report EXCEPT... a. Getting your own cell phone plan b. Leasing an apartment c. Applying for a mortgage to buy a house d. Buying a TV with cash

d. Buying a TV with cash

Each of these coverage areas is part of a standard renters insurance policy EXCEPT for... a. Loss of use b. Personal Property c. Liability d. Dwelling

d. Dwelling

All of the following are reasons to open a checking account EXCEPT... a. Making it easier to pay bills b. The ability to make purchases with a debit card c. Access to cash at an ATM d. Earn interest on your deposits

d. Earn interest on your deposits

All of the following are good ways to prepare for paying for college EXCEPT... a. Contributing to a 529 plan b. Building a savings c. Pursuing grants and scholarships d. Taking out student loans

d. Taking out student loans

If your credit card limit is $800 and your outstanding balance is $725, what is the largest amount you can charge on that card in the upcoming month? a. $0 b. $75 c. $725 d. $800

b. $75

When reading a stock quote, which of the following metrics would give you the best idea of the total value of the company? a. The stock ticker symbol b. The price change of the stock, quoted as a percentage c. The market cap d. The stock's opening and closing price for that day

b. The price change of the stock, quoted as a percentage

It's beneficial to use some of your available credit because... a. The interest you'll be charged goes up for every month you don't use any credit b. Banks require you to use some form of credit in order to have an account with them c. It shows you can responsibly use credit and builds your credit history d. Employers are less likely to hire you if you don't have a balance on your credit card

c. It shows you can responsibly use credit and builds your credit history

Your friend has chosen what college they're going to attend and says they want to lower the total amount of money they'll have to budget for while in school. Which of the following should you tell them to focus on? a. Indirect costs b. Tuition c. Direct costs d. Room and board

a. Indirect costs

Which of these actions would most likely decrease a person's net worth for at least the next 6 months? a. Use a loan to buy a brand new car b. Work 10 hours of overtime each week and put all extra earnings into a savings account c. Work 10 hours of overtime each week and use all extra earnings to pay down student loan debt d. Open 3 new credit cards but don't spend any money on them

a. Use a loan to buy a brand new car

How do the Annual Percentage Rates (APRs) on payday loans get to be so high? a. The loans go to affluent banking customers, so they charge a lot for the exclusivity b. The loan amounts are small, but the fees charged are relatively high and are renewed on a very short time-scale c. They make most of their money through ATM withdrawal fees as well as overdraft fees on checking accounts d. The amount of money people borrow using payday loans is typically quite high - $10,000 or more - so the fees are also high

b. The loan amounts are small, but the fees charged are relatively high and are renewed on a very short time-scale

What causes the total amount of interest paid on a mortgage to be so much higher than on other types of debts? a. The APR on a mortgage is typically between 20-30%, which is higher than for other types of debt b. The principal on a mortgage is high and the term is long c. Borrowers typically delay making mortgage payments because their home cannot be repossessed for nonpayment d. Homeownership is not very common in the US, so mortgages are priced high because demand is so low

b. The principal on a mortgage is high and the term is long

Which of the following is an example of online bill pay? a. Using a person-to-person app to repay your friend for dinner b. Using a mobile payment service to purchase your groceries at a store c. Having your bank send your rent to the landlord each month d. Having your check direct deposited into your bank account

c. Having your bank send your rent to the landlord each month

Jane needs a cosigner for her loan. Which person would be the best for her to ask to be her cosigner? a. Her cousin, who has several fancy cars and must be rich b. Her grandfather, who lives on a tight budget c. Her sister, who shows her she has a credit score of 735 d. Her neighbor, who says sharing the loan will allow him to remodel his garage at the same time

c. Her sister, who shows her she has a credit score of 735

If you buy a $1000 bicycle, which credit card payoff strategy will result in your paying the LEAST total amount? a. Pay the minimum monthly payment b. Pay $100 per month for 10 months c. Pay $250 per month until it's paid off d. Don't make any payments until you have the full $1000 saved, regardless of how long that takes

c. Pay $250 per month until it's paid off

All of the following are advantages of a 401(k), EXCEPT... a. You don't pay taxes on your investments' growth each year b. You can invest your 401(k) into a wider variety of asset types than you can with an IRA c. Your employer may match some of your 401(k) contributions d. You can contribute more money into a 401(k) than into an IRA

c. Your employer may match some of your 401(k) contributions

All of the following are ways that you can keep your online bank account safe EXCEPT... a. Only using private wifi to access your account b. Turning on text alerts to monitor your account for large or potentially fraudulent transactions c. Changing your password regularly using reasonably complex passwords d. Banking with small banks and credit unions because they are less frequently the target of fraud

d. Banking with small banks and credit unions because they are less frequently the target of fraud

Which of the following is a type of secured debt in which the item you purchased might be seized if you fail to make payments? Choose two correct answers. a. Auto loan b. Credit card c. Student loan d. Mortgage

a. Auto loan d. Mortgage

Over time, the stock market has... a. Experienced highs and lows but increased in overall value b. Had slight ups and downs but stayed about the same in value c. Rarely experienced changes and has maintained the exact same value d. Gone through severe ups and downs with an overall decrease in value

a. Experienced highs and lows but increased in overall value

All of the following are key components of your Student Aid Report EXCEPT... a. Your class schedule b. Cost of attendance c. Types of financial aid d. Net price

a. Your class schedule

Antonio has $4000 saved to use for a down payment, and he's about to buy a car that costs $29,000. How much would you expect his loan principal to be? a. $4000 b. $25,000 c. $33,000 d. $29,000 x his interest rate

b. $25,000

Your college's cost of attendance is $12,000, you will be receiving $5,000 in scholarships and grants, and you plan on taking out $6,000 in student loans. What is your net price? a. $1,000 b. $7,000 c. $11,000 d. $23,000

b. $7,000

One difference between bonds and bond funds is... a. Buying an individual bond is generally cheaper than buying a bond fund b. A bond fund can help you diversify your investment portfolio c. Bonds pay dividends to its investors d. You receive the principal amount you invest in a bond fund after a certain amount of time

b. A bond fund can help you diversify your investment portfolio

When talking about investing, what does it mean when someone refers to a fund? a. A type of savings account that you can use for emergency expenses b. A pool of money from shareholders that is used to invest in a collection of assets like stocks and bonds c. A way to crowdsource money from people online to help pay for an expense d. An amount someone has in their checking account

b. A pool of money from shareholders that is used to invest in a collection of assets like stocks and bonds

Which statement best describes a Schumer box? a. The final calculation of how much you owe on your credit card bill each month b. A standardized way of presenting the key terms of your credit card agreement c. A legal document stating that you're behind on your credit card payments d. The outstanding balance on your credit card once you've made your recent payment

b. A standardized way of presenting the key terms of your credit card agreement

Investors report this as being one of the biggest downfalls of robo-advisors when compared to human managers: a. Higher fees b. Lack of personal touch c. Lower returns d. Harder to use

b. Lack of personal touch

How much money should you try to save in your emergency fund? a. 3-6 days worth of expenses b. 3-6 weeks worth of expenses c. 3-6 months worth of expenses d. 3-6 years worth of expenses

c. 3-6 months worth of expenses

All of the following are strategies to reduce risk EXCEPT... a. Holding your investments for at least five years b. Making sure your investments are diversified c. Hiring an investment manager who you think can beat the market d. Investing small amounts of money over longer periods of time

c. Hiring an investment manager who you think can beat the market

During a BULL market... a. Investors are pessimistic about how the stock market will perform b. The economy is not doing as well c. More investors are buying stocks, which causes stock values to increase d. The unemployment rate in the country increases

c. More investors are buying stocks, which causes stock values to increase

Juan buys a bond with a fixed coupon rate of 3%. Six months later, similar bonds that are issued have a coupon rate of 4%. Which of the following is TRUE if he chooses to sell the bond before maturity? a. The price of Juan's bond will increase b. More investors will be willing to buy Juan's bond c. The interest rate of Juan's bond will increase to reflect the current market d. The price of Juan's bond will decrease

d. The price of Juan's bond will decrease

Which word represents the total cost of the item you're purchasing on credit minus any down payment you make upfront? a. Principal b. Term c. Interest rate d. APR

a. Principal

Your friend is an exceptional softball player who's broken records at your school. What type of financial aid would be most applicable to those achievements? a. Scholarships b. Grants c. Work study d. Student loans

a. Scholarships

If you were offered two auto loan options with the same principal and interest rate, but one was a 48-month loan and one was a 72-month loan, which outcome below will reflect the impact of that difference in term? a. The 48-month loan will cost less money overall b. The 48-month loan will have lower monthly costs c. The 48-month loan will take longer to pay off d. The 48-month loan will always be a better choice

a. The 48-month loan will cost less money overall

What is the liability portion of a homeowners insurance policy meant to cover? a. The cost of a lawsuit if someone sues you for injuries they got on your property b. The cost of repairing the physical structure of your home c. The cost of floods and earthquakes not covered by a standard policy d. The cost of replacing personal property that you, yourself, damage within your home

a. The cost of a lawsuit if someone sues you for injuries they got on your property

All of the following are recommended strategies for beginner investors EXCEPT... a. Try to pick winning stocks and beat the market b. Recognize cognitive biases that may be influencing your decisions c. Minimize expense ratios to cut back on costs d. Choose your investments based on your risk tolerance

a. Try to pick winning stocks and beat the market

What is the relationship between your Expected Family Contribution (EFC) and your likelihood of qualifying for financial aid? a. A higher EFC means you'll likely qualify for MORE financial aid b. A higher EFC means you'll likely qualify for LESS financial aid c. Your EFC is equal to the amount of financial aid you're eligible to receive d. Your EFC has no effect on how much financial aid you'll qualify for

b. A higher EFC means you'll likely qualify for LESS financial aid

All of the following statements about the FAFSA are true EXCEPT... a. It is used to determine how much and what kind of financial aid you're eligible for b. It's best to submit your FAFSA application later in the filing period so you know what types of aid are available c. Your parents can help you submit your application by creating their own FSA ID and providing necessary information d. To receive financial aid, you'll need to submit the FAFSA for each year you'll be attending college

b. It's best to submit your FAFSA application later in the filing period so you know what types of aid are available

Which of the following BEST explains how a spare-change app works to invest your money? a. The app transfers a small amount of money from your savings account to your checking account each month b. The app rounds up purchases you make through your bank account and automatically invests your change c. The app adds money to your checking account to make your balance a whole number d. The app transfers a small amount of money from your savings account to an investment account each month

b. The app rounds up purchases you make through your bank account and automatically invests your change

All of the following are reasons to invest, EXCEPT... a. To minimize the impact on inflation, which causes you to lose purchasing power b. To earn a consistent rate of return with lower risk than typical savings accounts c. To build wealth by reinvesting your returns and allowing them to compound d. To earn higher average rates of return than you would in a typical savings account

b. To earn a consistent rate of return with lower risk than typical savings accounts

Which of the following is a good reason to choose a 30-year, fixed-rate mortgage? a. You want to make high monthly payments and close your mortgage sooner b. You want to minimize the amount of interest you'll pay over the life of the loan c. You want low, predictable monthly payments d. You want to take advantage of the ups and downs of the market and don't mind risk

c. You want low, predictable monthly payments

What does it mean when someone says "Good investing is boring"? a. There should be little to no change in how your portfolio performs b. You should avoid talking to anyone about how your investments are performing c. You're better off making long-term investments that don't require day-to-day management d. You should avoid checking how your investments are doing for at least 10 years

c. You're better off making long-term investments that don't require day-to-day management

All of the following are possible sources of grants and scholarships EXCEPT... a. Government b. Non-profit organizations c. Your parents d. Private businesses

c. Your parents

Which of the following most accurately describes what a bond is? a. A bond is a government loan made to an individual investor with the expectation that it will be paid back with interest b. A bond is an investment in which a corporation lends an individual investor money with the expectation that it will be paid back with interest c. A bond is a government loan made to a corporation with the expectation that it will be paid back with interest d. A bond is an investment in which an investor lends money to a corporation or government with the expectation that it will be paid back with interest

d. A bond is an investment in which an investor lends money to a corporation or government with the expectation that it will be paid back with interest

Danya has found her dream home, and it's on the market for $200,000. Each of these is a way she can decrease the total amount she'll pay EXCEPT... a. Increase her down payment b. Qualify for a lower interest rate c. Choose a shorter loan term d. Choose a mortgage with a higher APR

d. Choose a mortgage with a higher APR

Which college student is MOST likely to need their own renters insurance policy? a. Abigail, who lives with her parents and commutes to college b. Beatrice, who is a freshman living in a dorm and whose mom has homeowners insurance c. Carson, who is a senior living in a dorm and whose guardians have homeowners insurance d. Dani, who lives in an off-campus apartment with her cousin and a friend

d. Dani, who lives in an off-campus apartment with her cousin and a friend

Your friend tells you they've submitted their FAFSA and they're ready to start accepting financial aid. What type of aid should they accept first? a. Federal student loans b. Private student loans c. Work study d. Grants and scholarships

d. Grants and scholarships

With micro-investing, you are... a. Investing large amounts of money over short periods of time b. Manually rebalancing your investments to reach your goals c. Delaying investing until you have a large sum of money d. Investing small amounts of money consistently into the market

d. Investing small amounts of money consistently into the market

Why are payday loans so popular? a. They are a fast, easy way to save money and budget effectively d. They meet the need for quick cash for very large purchases such as cars and homes c. They are a terrific way to build your credit history and improve your credit score d. They are accessible to people who need to borrow small amounts of money and don't have any better options

d. They are accessible to people who need to borrow small amounts of money and don't have any better options

Paying more than the minimum payment (or paying your balance in full) is beneficial because... a. It lowers your interest rate b. The lender can't penalize you for future late payments c. You get a discount on future purchases made with credit d. You pay less interest overall

d. You pay less interest overall

An investor can best harness the power of compounding by doing all of the following, EXCEPT... a. Making frequent trades b. Starting to invest early c. Reinvesting earnings d. Minimizing risk

a. Making frequent trades

What is a stock? a. A measurement of a company's profits b. An investment option that allows you to own a small piece of a company c. An annual report that includes details about a company's leadership and earnings d. A low-risk savings option that can help you build an emergency fund

b. An investment option that allows you to own a small piece of a company

Which statement is true of both debit AND credit cards? a. Both can trap you in an endless cycle of debt if you're not careful b. Both allow you to make purchases in a store or online c. Both typically have interest rates between 10-30% d. Both require you to pay a minimum monthly payment when your bill arrives

b. Both allow you to make purchases in a store or online

What should you do if you find errors in your credit report? a. Close the affected credit account(s) b. Contact the credit reporting agency or the company that provided the information c. Call the police to notify them of potential fraud d. Report the error on your taxes

b. Contact the credit reporting agency or the company that provided the information

Daisy reads her bank statement and finds an error. She should... a. Do nothing. The bank will correct the error at the end of the month. b. Call the FDIC. She is insured up to $250,000. c. Call the bank. The bank will investigate the transaction to see if it was an error. d. Assume that it's a transaction that she made and forgot about

c. Call the bank. The bank will investigate the transaction to see if it was an error.

Which of the following types of federal student loans can be taken out by your parents/guardian to help pay for your college education? a. Subsidized Direct Loans b. Unsubsidized Direct Loans c. Direct PLUS Loans d. Parents cannot take out federal student loans

c. Direct PLUS Loans

If you drive a fancy car a lot of miles each month, your premiums will likely be... a. Lower than expected compared to another driver with the same driving record but a cheaper car b. The same as for another driver with the same driving record but a cheaper car c. Higher than expected compared to another driver with the same driving record but a cheaper car d. Unchanged, because all drivers pay the exact same premium based on federal law

c. Higher than expected compared to another driver with the same driving record but a cheaper car

Karishma has a renters insurance policy with a coverage limit of $25,000. While she's on vacation a fire breaks out, ruining $9,000 worth of possessions before the fire department puts it out. Her deductible is $500. How much will Karishma and the insurance company each pay? a. Karishma pays $0, while the insurance company pays $500 b. Karishma pays $0, while the insurance company pays $9,000 c. Karishma pays $500, while the insurance company pays $8,500 d. Karishma pays $500, while the insurance company pays $24,500

c. Karishma pays $500, while the insurance company pays $8,500

Which of the following is a characteristic of a brokerage account? a. Typically no capital gains tax b. Limits on how much you can invest c. No penalties for withdrawing your money d. Require a large amount of money to open an account

c. No penalties for withdrawing your money

Which formula is used to calculate the net price of a college? a. Sticker price + grants and scholarships = net price b. Sticker price + value = net price c. Sticker price - grants and scholarships = net price d. Sticker price - value = net price

c. Sticker price - grants and scholarships = net price

Which of the following actions would MOST likely increase your cost of attending college? a. Taking out a federal student loan rather than a private student loan b. Using grants and scholarships to pay for college costs c. Accepting a work study position d. Attending an out-of-state college

d. Attending an out-of-state college

Each of the following represents an installment loan EXCEPT... a. Home mortgage b. Auto loan c. Student loan d. Credit card

d. Credit card

401(k)s and IRAs are both... a. Types of investments that you can choose to have in an investment account b. Investment accounts that are commonly offered by employers c. A type of savings accounts that generally offers around a 1% rate of return d. Investment accounts that you can open to help you invest for retirement

d. Investment accounts that you can open to help you invest for retirement

Which of the following is usually a benefit of being a member at a credit union? a. Higher interest rates and lower fees b. Lower interest rates and higher fees c. Higher interest rates and higher fees d. Lower interest rates and lower fees

d. Lower interest rates and lower fees

Which of the following categories make up most of your credit score? a. Number of recent hard inquiries b. Average length of your credit history c. Number of active credit accounts d. Payment history and credit utilization

d. Payment history and credit utilization

Bodily injury liability coverage provides coverage in which scenario? a. The insured driver causes an accident where another person is injured b. The insured driver causes an accident where another's property is damaged c. The insured driver is a victim of an accident and needs to replace their own car d. The insured driver is a victim of an accident and needs to pay their own medical bills

a. The insured driver causes an accident where another person is injured

Felix opens a credit card with no annual fee, so he assumes that using the credit card regularly will be absolutely free for the next two years while he finishes grad school. Why is his assumption incorrect? a. Unless he pays the whole bill every month, he will pay interest according to his APR b. He will automatically pay penalty fees if he uses his credit card for more than 3 consecutive months c. If his grace period is any longer than 10 days, he will have to pay fees d. He will need to pay a separate student fee because he is still in grad school

a. Unless he pays the whole bill every month, he will pay interest according to his APR

Leaving your investments in the stock market alone for at least five years is a good way to reduce risk because... a. It allows your investments to earn more interest b. It keeps you from reacting to dips in the market and selling at too low of a price c. Fees are waived for investments held for over five years d. You get a bonus from the company if you invest for five years

b. It keeps you from reacting to dips in the market and selling at too low of a price

Why is risk pooling essential for the insurance industry to exist? a. Risk pooling eliminates everyone who files expensive claims and makes them uninsurable b. Risk pooling creates large groups to spread the risk level out while maximizing the amount of premiums that can be collected c. Risk pooling provides every insured person with a monthly check, called a premium, so they can pay whatever bills they need d. Risk pooling is a low-cost way for everyone to save their premiums in a saving account to use later

b. Risk pooling creates large groups to spread the risk level out while maximizing the amount of premiums that can be collected

If a person with multiple sources of debt has a goal of eliminating one or more of them in as little time as possible, which debt repayment strategy would be best? a. High-interest method b. Snowball method c. Stopping payments on all debts but one so you can pay that one off faster d. Making the minimum payment

b. Snowball method

Eli is planning ahead for retirement. They should consider all of the following factors when determining how much they'll need in retirement EXCEPT... a. What age they plan to retire b. The current balance in their checking account c. The lifestyle they want to lead in retirement d. How much money they expect to receive through Social Security

b. The current balance in their checking account

Which of the following statements is an advantage of online banking? a. Once you set up online banking, your bank will waive overdraft, ATM, and monthly fees b. Using online banking, you can request transfers, pay bills, and automate your savings without visiting the bank branch c. Online banking is the only way you can make online purchases d. If you set up online banking, your bank will also file your taxes for you automatically

b. Using online banking, you can request transfers, pay bills, and automate your savings without visiting the bank branch

Which of the following statements about forbearance is true? a. You don't have to make monthly payments and interest does not accrue b. You don't have to make monthly payments but interest still accrues c. You have to make regular monthly payments but interest does not accrue d. You have to make regular monthly payments and interest accrues

b. You don't have to make monthly payments but interest still accrues

Shonda's mom recommends that she spend a year building her credit history and boosting her credit score before she applies for a loan to buy her dream car, which costs $54,000. Why is that good advice? a. A good credit score will reduce her down payment b. A good credit score will reduce her principal c. A good credit score will reduce her interest rate d. A good credit score will allow her to pay the full $54,000 in cash

c. A good credit score will reduce her interest rate

Ralph has a shiny new car, and he wants to make sure the insurance company will help him fix or replace it in case of any type of damage. Each of these coverage areas will provide the type of coverage he's looking for on his car EXCEPT... a. Uninsured/underinsured motorist b. Collision c. Comprehensive d. Liability

c. Comprehensive

How can credit cards make it more challenging to save? a. Many banks will not let you open a savings account when you have a credit card b. You will be charged a fee for every credit card transaction c. Retailers mark up purchases if you use a credit card d. Credit cards make it easier to spend money

d. Credit cards make it easier to spend money

Which of the following is an example of diversification? a. Putting the majority of your money into a savings account and investing the rest b. Investing different amounts of money every month c. Purchasing shares of stock in a variety of companies and industries d. Using multiple investment managers to get different opinions

c. Purchasing shares of stock in a variety of companies and industries

The goal of an actively managed fund is to outperform the market. What does this mean? a. The fund is guaranteed to provide a rate of return that is lower than the overall market b. The fund will match the overall return of the market c. The fund is managed by a fund manager, who tries to beat the overall market's rate of return d. If the actively managed fund does not beat the market, the fund manager will pay you the difference

c. The fund is managed by a fund manager, who tries to beat the overall market's rate of return

Piper is willing to pay a high premium for their disability insurance. What are the likely outcomes of paying that higher premium? a. They receive a low deductible and a low monthly payment b. They receive a low deductible and a low coverage limit c. They receive a low deductible and a high coverage limit d. They receive a low deductible and a high risk assessment

c. They receive a low deductible and a high coverage limit

Which of the following statements BEST describes investing? a. Putting $100 per month into an FDIC-insured bank account for short-term goals b. Buying and selling stocks within the same day to take advantage of short-term price variation c. Reducing the purchasing power of your money over time d. Buying assets, like stocks, with the intention to hold them and grow your wealth over the long term

d. Buying assets, like stocks, with the intention to hold them and grow your wealth over the long term

Each of the following people has $5000 in debt. Which debt is most worthwhile? a. Phil, who spent mostly on GoFundMe campaigns for people he saw on social media b. Tyree, who took out a loan for an old used car so he can drive to and from campus c. JJ, who used a credit card to pay his daily expenses while he was out of a job d. It's impossible to tell because we don't know how much they each valued the spending, how much it impacted their lives, or how easily they can repay the debt

d. It's impossible to tell because we don't know how much they each valued the spending, how much it impacted their lives, or how easily they can repay the debt

All of the following must be done in order to accept your financial aid offer EXCEPT... a. Review your Student Aid Report b. Sign and return your promissory note c. Complete entrance counseling d. Make a deposit to secure your student loans

d. Make a deposit to secure your student loans

Which of the following statements is TRUE about the state of retirement in the U.S.? a. Most Americans are able to retire at their full retirement age b. Many retirees are able to support themselves on Social Security payments alone c. The majority of employers offer pension plans for workers d. Many people may need to invest to build wealth and to support themselves in retirement

d. Many people may need to invest to build wealth and to support themselves in retirement

All of the following are true about a passively managed fund EXCEPT... a. Fees for a passively managed fund are typically lower than those for an actively managed fund b. Passively managed funds are generally seen as low risk investments c. A passively managed fund guarantees the average return of the securities it includes d. Passively managed funds are managed by a fund manager

d. Passively managed funds are managed by a fund manager

Which of the following is TRUE about a stock split? a. Stock splits impact the overall value of a company b. Stock splits decrease the number of shares you own c. Stock splits indicate that a company is doing poorly d. Stock splits make a stock more accessible to a greater number of investors

d. Stock splits make a stock more accessible to a greater number of investors

In general, why do so many different types of companies check your credit report? a. They're legally required to do so by the Securities and Exchange Commission (SEC) b. To determine the price of the product or service they're selling you c. Doing business with someone with a low credit score will also lower their credit score d. They want to make sure you're likely to make consistent and timely payments

d. They want to make sure you're likely to make consistent and timely payments

After completing the FAFSA, what will you receive that you'll need to advance through the financial aid process? a. A list of grants and scholarships you are likely to receive b. Discounts on tuition at certain colleges based on your financial need c. Career counseling that is offered to all FAFSA filers d. Your Student Aid Report that contains information like your Expected Family Contribution

d. Your Student Aid Report that contains information like your Expected Family Contribution

Consolidation __________ your monthly payment and often means you will pay __________ in interest over the life of your loan. a. raises, less b. raises, more c. lowers, less d. lowers, more

d. lowers, more