Interest is - a charge for lending money to a bank - the amount owed for borrowing money - the amount added into your savings when opening a bank account - a charge for the convenience of accessing money stored in your bank account
answer
the amount owed for borrwoing money
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Which of the following is a type of savings vehicle? • Certificate of Deposit • Money Market Account • Checking Account • Both A &B
answer
Both A &B
question
John just opened a savings account and wants to maximize the amount of interest he earns. Which of the following actions would enable him to earn MORE interest? - Selecting an account with a high interest rate. - Leaving his money in the account for long period of time. - Transferring money into his checking account each month. - Both A & B
answer
Both A & B
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You are opening a savings account that earns compound interest. Which compounding frequency will earn you the MOST money? - Compounding 1 time a year - Compounding 4 times a year - Compounding monthly - Compounding daily
answer
Compounding daily
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To earn as much interest as possible, you should open a savings account that earns _______ interest and has the ______ interest rate. • compound; lowest • compound; highest • simple; lowest • simple; highest
answer
compound; highest
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The purpose of a budget is to: • help you plan how you will spend the money you earn or receive • stop you from spending too much money • increase the balance of your savings account • tell you how much you owe the government in taxes
answer
help you plan how you will spend the money you earn or receive
question
Which of the following savings vehicles usually requires a high minimum balance? • Simple savings account • Certificate of Deposit (CD) • Checking account • All of the above
answer
Certificate of Deposit (CD)
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Which of the following is generally true about savings vehicles? • Savings vehicles are only useful for long-?term investments • People should evaluate different forms of savings vehicles based on their needs • Savings vehicles are never insured • All of the above
answer
People should evaluate different forms of savings vehicles based on their needs
question
Which of the following accounts will give you the LEAST access to your money? • Simple savings account • Certificate of Deposit (CD) • Checking account • Cash
answer
Certificate of Deposit (CD)
question
When it comes to saving money, what is a good rule of thumb? • Keep most of your savings in your checking account • Put aside money for savings each month • Choose the savings account with the lowest interest rate • Putting anything you can't afford on your credit card
answer
Put aside money for savings each month
question
Which of the following is a unique feature of credit unions? • Credit unions are typically owned and run by their members. • Credit unions limit membership to certain people or groups. • Credit unions offer a wide variety of banking services. • Both A ; B
answer
Both A ; B (correct answer)
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The best way to ensure the accuracy and safety of your accounts is to: • Monitor your online accounts regularly • Shred your paper account statements weekly • Balance your checkbook annually • Call your customer service center daily
answer
Monitor your online accounts regularly
question
Which of the following is NOT one of the responsibilities of the Federal Reserve? • Supervising the Reserve banks • Establishing the federal budget • Maintaining a stable banking system • Setting the nation's monetary policy
answer
Establishing the federal budget
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The three parts of the Federal Reserve System are the Reserve Banks, the Federal Open Market Committee (FOMC), and the: • Board of Governors • United States Mint • Department of the Treasury • Secretary of State
answer
Board of Governors
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What's the purpose of balancing or monitoring your checking account? • To help you calculate how much money you have in your account • To keep an estimation of how many checks you write • To find out which checks you have bounced • To stop identity theft from occurring
answer
To help you calculate how much money you have in your account (
question
What part of a check is the LEAST important? • memo line • signature line • routing number • The check number
answer
memo line
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Savings accounts usually offer _________ interest rates than checking accounts. It is _________ to access your money in a savings account than in a checking account. • lower; easier • higher; harder • lower; harder • higher; easier
answer
higher; harder
question
Which of the following statements comparing debit cards to credit cards is TRUE? • Debit cards allow you to draw funds directly from your checking account. • Debit cards typically offer greater fraud protection than credit cards. • Debit cards never require a signature to finalize a purchase like credit cards. • Debit cards charge higher interest rates on purchases than credit cards.
answer
Debit cards allow you to draw funds directly from your checking account. (correct answer)
question
Making a minimum payment: • Means you are paying a small portion of your total credit card debt • Is the same thing as making a late credit card payment • Will have a negative effect on your credit score • Will cause your credit card to be cancelled
answer
Means you are paying a small portion of your total credit card debt (correct answer)
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What is a credit card balance? • The amount of interest you must pay the credit card company • The required minimum payment to your credit card company • A way to track your incoming and outgoing purchases • The amount of money you still owe to the credit card company
answer
The amount of money you still owe to the credit card company (correct answer)
question
Which of the following is NOT a common credit card fee? • Late fee • Annual membership fee • Balance transfer fee • Minimum payment fee
answer
Minimum payment fee (correct answer)
question
What payment type can help you stick to a budget? • Credit cards • Debit cards • Payday loans • Cash advances
answer
Debit cards (correct answer)
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Which of the following payment types require you to pay upfront? • Money order • Cashier's check • Prepaid card • All of the above
answer
All of the above (correct answer)
question
The annual percentage rate on a credit card determines: • The amount of interest you are charged on credit card purchases • The amount your credit limit can go up within a year • How many credit cards that you can own • None of the above
answer
The amount of interest you are charged on credit card purchases (correct answer)
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Which of the following can increase your credit card's APR? • Paying the minimum • Missing a credit card payment • Paying off the full balance • Cashing in on rewards points
answer
Missing a credit card payment (correct answer)
question
If you are planning to carry a large balance on your credit card, which of the following credit card features should you look for? • Low APR • Low annual fees • Lots of credit card rewards • A large credit limit
answer
Low APR (correct answer)
question
Which payment method typically charges the highest interest rates? • Credit cards • Cashier's checks • Prepaid cards • Payday loans
answer
Payday loans (correct answer)
question
Which of the following MOST influences your credit score? • Types of Credit Used • Payment History • Length of Credit History • Amounts Owed
answer
Payment History (correct answer)
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Which of the following actions would IMPROVE your credit score? • Closing out old credit cards • Paying off your credit card bill • Using a large portion of your credit limit • Opening a new savings account
answer
Paying off your credit card bill (correct answer)
question
How many free credit reports are you legally entitled to each year? • One credit report each year • Three credit reports each year • One credit report from each credit bureau • Three credit reports from each credit bureau
answer
One credit report from each credit bureau (correct answer)
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All of the following make up the big three credit reporting agencies EXCEPT: • Federal Reserve • Experian • Equifax • TransUnion
answer
Federal Reserve (correct answer)
question
Which of the following actions can NEGATIVELY impact your credit score? • You disputed an item on your credit report. • You forgot to pay the cable bill. • You pay all your bills in cash. • You use a small amount of your available credit.
answer
You forgot to pay the cable bill. (correct answer)
question
Having a low credit score can make it more difficult to: • Obtain a car loan • Open a new credit card • Secure an apartment lease • All of the above
answer
All of the above (correct answer)
question
Which of the following actions has NO impact on your credit score? • You inquire about a credit card charge. • You use a large percentage of your credit limit. • You opened several new credit cards last week. • You send in your credit card payment a couple days late.
answer
You inquire about a credit card charge. (correct answer)
question
Which of the following statements about credit scores is TRUE? • Credit scores reflect how likely individuals are to repay their debts. • Credit scores range from the low 300's to the mid 800's. • Each person has three credit scores. • All of the above.
answer
All of the above. (correct answer)
question
Having a good credit score is important because: • It can impact your ability to get a driver's license. • It can impact your ability to be approved for bank loans. • It can impact how much you will have to pay the government in taxes. • It can impact how much you will have to pay for college.
answer
It can impact your ability to be approved for bank loans. (correct answer)
question
Which action is LEAST important to maintaining a healthy credit score? • Make on?time payments • Check your credit report annually • Know your exact credit score • Fix inaccurate information on your credit report
answer
Know your exact credit score (correct answer)
question
When referring to student loans, what is a grace period? • The time period between graduating college and starting your first job when you don't have to pay back student loans • The period after graduating or leaving school before you must begin paying back student loans • The amount of time you have to pay back your entire student loan amount - None of the above
answer
The period after graduating or leaving school before you must begin paying back student loans (correct answer)
question
Which of the following loans will typically offer the lowest interest rate? • Payday loan • Federal Student Loan • Private Loan • Both A & B
answer
Federal Student Loan (correct answer)
question
The Federal Application for Student Aid (FAFSA) form: • must be completed by your guidance counselor • can be submitted on online or by mail • can only be filled out by U.S. citizens • is used to apply for private loans
answer
can be submitted on online or by mail (correct answer)
question
You are looking for ways to pay for your higher education costs. Which of the following options will require you to pay back any money you receive? • Grants • 529 plans • Federal student loans • Scholarships
answer
Federal student loans (correct answer)
question
Your sister is starting 9th grade next year and is thinking about going to college. What step would you recommend she take first? • Fill out her FAFSA form • Sign up for college admission exams • Start applying for grants & scholarships • Look for school clubs & organizations she's interested in
answer
Look for school clubs ; organizations she's interested in (correct answer)
question
After you send in your FAFSA form, what will you receive back? • Your IRS Data Retrieval Form • Your Student Aid Report • A copy of your family's tax returns • A copy of your completed FAFSA form
answer
Your Student Aid Report (correct answer)
question
Using the FAFSA form, you can apply for: • Federal student loans • The federal work-?study program • Private loans • Both A ; B
answer
Both A ; B (correct answer)
question
Which of the following statements about federal student loans is TRUE? • The interest rate on your loan will be fixed over time. • The interest rates on federal loans and private loans are similar. • You can only get federal student loans if you demonstrate financial need. • You do not accumulate interest on federal loans.
answer
The interest rate on your loan will be fixed over time. (correct answer)
question
The return on investment (ROI) from education is typically the highest for: • A high school graduate • A college applicant • Someone with a 2?year (Associate) degree • Someone with a 4?year (Bachelor's) degree
answer
Someone with a 4?year (Bachelor's) degree (correct answer)
question
Which loan type requires you to make loan payments while you're attending school? • Unsubsidized federal loan • Subsidized federal loan • Both A & B • Neither A nor B
answer
Neither A nor B (correct answer)
question
Jim is in the market for a car, but he'll probably only need it for a couple of years. After that, he plans on moving into the city and using public transportation. He has a short commute to work, so he won't be putting many miles on his vehicle. What's the best transportation option for Jim? • Use his savings to buy the car in full • Buy the car using an auto loan • Lease the car • Take public transportation
answer
Lease the car (correct answer)
question
All of the following components are commonly found in rental housing agreements EXCEPT: • Whether the renter can have pets in the house • How much the renter will pay • What type of renter's insurance the renter must buy • Which repair types the renter will be responsible for
answer
What type of renter's insurance the renter must buy (correct answer)
question
What is a mortgage? • A type of rent used to pay for housing • A type of loan used to buy property • A measure of the value of a home • A measure of your credit rating
answer
A type of loan used to buy property (correct answer)
question
What is a mortgage? • A type of rent used to pay for housing • A type of loan used to buy property • A measure of the value of a home • A measure of your credit rating
answer
A type of loan used to buy property (correct answer)
question
A _________ is generally considered an appreciating asset because it will _________ in value over time. • car; increase • car; decrease • house; increase • house; decrease
answer
house; increase (correct answer)
question
Renting provides _________ flexibility but can lead to _________ costs in the long-?term. • greater; lower • greater; higher • less; lower • less; higher
answer
greater; higher (correct answer)
question
John would like to move from the suburbs into the city, but the rent in the city is very high. John has found an apartment he really likes, but he can only afford about 60% of the monthly rent. What is the best housing option for John? • Purchase a home in the city center instead. • Rent the apartment anyway. • Rent the apartment with a roommate. • Purchase a home in the suburbs instead.
answer
Rent the apartment with a roommate. (correct answer)
question
Which of the following are costs associated with owning a car? I. Fuel II. Insurance III. Repairs IV. Wear ; Tear fees• I, III, and IV • I, II, and IV • I, II and III • I, II, III, and IV
answer
I, II and III (correct answer)
question
Someone may choose to own a car instead of leasing because: • The car can be resold later to make some money back. • The car can be resold later for a higher price. • The maintenance costs for a leased car are generally higher. • The insurance costs for a leased car are higher.
answer
The car can be resold later to make some money back. (correct answer)
question
One reason to buy a home instead of rent a home is: • Homes have the potential to appreciate in value over time. • Homes have few maintenance costs. • Buying a home requires less money upfront. • Buying a home is a more flexible housing option.
answer
Homes have the potential to appreciate in value over time. (correct answer)
question
Which of the following are NOT deducted on a typical paystub: • Sales tax • Social security tax • State income tax • Medicare tax
answer
Sales tax (correct answer)
question
Which of the following statements about taxes is FALSE? • Taxes are collected at the local, state and federal level • Taxes at the local, state and federal level are all equal • Some states don't collect sales tax. • Some states don't collect income tax
answer
Taxes at the local, state and federal level are all equal (correct answer)
question
Insurance can help you: • minimize monthly expenses • protect against unexpected accidents • reduce the chances of getting into an accident • cover all out?of?pocket costs
answer
protect against unexpected accidents (correct answer)
question
When starting a new job, the form you complete to determine how much tax to withhold from your paycheck is the _______. • 1040 EZ • 1099 • W-2 • W-4
answer
W-4 (correct answer)
question
When you purchase an item in a store, you may be charged __________. • income tax • capital gains tax • sales tax • property tax
answer
sales tax (correct answer)
question
Your auto insurance policy has a $200 monthly premium and $700 deductible. What is the maximum amount you will have to pay out-of?pocket before your insurance covers your costs? • $200 • $500 • $700 • $900
answer
$700 (correct answer)
question
Jan pays $70 each month for her auto insurance policy. This regular payment is called a: • co-?pay • deductible • premium • claim
answer
premium (correct answer)
question
Which of the following typically have the highest insurance premiums. • Drivers who travel long distances • Drivers who have safe driving records • Older, experienced drivers • Young, inexperienced drivers
answer
Young, inexperienced drivers (correct answer)
question
In which of the following scenarios will you be entitled to pay the least amount of money out-of?pocket for medical expenses? • You have no insurance. • You have health insurance with a $500 deductible. • You have auto insurance with a $700 deductible. • You have health insurance with a $1,500 deductible.
answer
You have health insurance with a $500 deductible. (correct answer)
question
You have an insurance policy with the terms listed below. How much should you expect to pay the insurance company each month for coverage? YOUR INSURANCE PLAN: Premium = $300/month; Deductible = $500 • $200 • $300 • $500 • $800
answer
$300 (correct answer)
question
Consumer protection laws are meant to: • Protect consumers from spending too much money. • Prevent consumers from buying unnecessary items. • Protect businesses from consumers. • Prevent unfair or deceptive business practices.
answer
Prevent unfair or deceptive business practices. (correct answer)
question
The best way to investigate fraudulent transactions on your credit card is to: • Keep track of your monthly budget. • Review all old bank statements. • Keep a copy of your bank statements in a safe place. • Review your recent credit card statements.
answer
Review your recent credit card statements. (correct answer)
question
The safest action to take if someone claiming to be from your bank calls you to ask for account information is to: • Pull up the bank website and compare information. • Hang up and call back using the bank's official phone number. • Ask the caller to explain the account information they need in more detail. • Provide only your name and account number.
answer
Hang up and call back using the bank's official phone number. (correct answer)
question
What is the first action you should take if you suspect there has been a fraudulent charge on your credit card? • Close all bank accounts associated with that credit card. • Contact the credit card company to report the fraudulent charge. • Order your credit report to look for other fraudulent activity. • Call the store where the purchase was made and ask them to remove the charge.
answer
Contact the credit card company to report the fraudulent charge. (correct answer)
question
What is the safest way to dispose of old bank account statements? • Shred them in a paper shredder. • Throw them out in a neighbor's trash. • Keep them bundled together in a folder. • Put them in the trash unopened.
answer
Shred them in a paper shredder. (correct answer)
question
It is generally safe to provide your Social Security Number to: • Anyone who asks you for it. • Close friends and relatives who do not know it. • School personnel who want to have it on record. • Verified trusted sources that need it.
answer
Verified trusted sources that need it. (correct answer)
question
Identity thieves can use your personal information to: • Open a credit card • Sign up for electricity service • Get a cell phone contract • All of the above
answer
All of the above (correct answer)
question
Which action will be least helpful if you've been the victim of identity theft? • Withdraw your money from all accounts. • Report the fraud to each credit bureau. • Ordering your latest credit report. • Contact your bank and credit card companies.
answer
Withdraw your money from all accounts. (correct answer)
question
Which document puts you at the least risk of identity theft? • Cash receipts • Paycheck stubs • Pre-approved credit card offers • Old tax records
answer
Cash receipts (correct answer)
question
Which of the following is the BEST way to protect against identity theft? • Discard old account statements weekly. • Use only local public access Wi?Fi. • Change online account passwords frequently. • Avoid emails from people who do not like you.
answer
Change online account passwords frequently. (correct answer)
question
When it comes to investing, what is the typical relationship between risk and return? • It depends on the investment mix in your portfolio. • The greater the potential risk, the smaller the potential return. • The greater the potential risk, the greater the potential return. • There is no relationship between risk and return.
answer
The greater the potential risk, the greater the potential return. (correct answer)
question
Diversification is important in investing because... • It helps you to balance your risk across different types of investments • It increases your overall risk, which guarantees that you will make more money • It ensures that you only make low-?risk investments • It helps you gain the highest rate of return despite any risks.
answer
It helps you to balance your risk across different types of investments (correct answer)
question
Which best describes the difference between stocks and bonds? • Stocks allow investors to own a portion of the company; bonds are loans to the company. • Stocks are a more reliable investment; bonds tend to be more volatile. • Stocks pay interest to investors throughout the year; bonds only pay interest at fixed times during the year. • Stocks allow investors to share in profits; bonds make investors responsible for company debts.
answer
Stocks allow investors to own a portion of the company; bonds are loans to the company. (correct answer)
question
What is the primary reason to issue stock? • To help investors earn a higher rate of return • To raise money to grow the company • To distribute the risk of bankruptcy across more investors • To increase investor awareness of the company
answer
To raise money to grow the company (correct answer)
question
How can investors receive compounding returns? • By selecting a savings account that has a higher interest rate • By investing their earnings back into their original investment • By transferring their earnings into a high?risk investment • By diversifying their investment portfolio
answer
• By investing their earnings back into their original investment (correct answer)
question
If an investment is considered "volatile", it means... • the investment will experience rapid growth over time. • the investment is high?risk, and will its price will increase quickly. • the value of the investment may be hard to predict. • the investment is undervalued and may increase over time.
answer
• the value of the investment may be hard to predict. (correct answer)
question
Which of the following would be considered the highest risk portfolio? • A portfolio made up of 20% savings accounts, 50% mutual funds, and 30% bonds. • A portfolio made up of 40% mutual funds, 40% Treasury bonds, and 10% stocks. • A portfolio made up of 70% mutual funds, 10% stocks, and 20% Treasury bonds. • A portfolio made up of 60% stocks, 30% mutual funds, and 10% Treasury bonds.
answer
• A portfolio made up of 60% stocks, 30% mutual funds, and 10% Treasury bonds. (correct answer)
question
When you buy a ____ , you are loaning money to an organization. • Index fund • Stock • Mutual fund • Bond
answer
• Bond (correct answer)
question
Which of the following correctly orders the investments from LOWEST risk to HIGHEST risk? • Treasury bond ? Stock ? Diversified mutual fund • Stock ? Treasury bond ? Diversified mutual fund • Treasury bond ? Diversified mutual fund - Stock • Diversified mutual fund ? Treasury bond ? Stock
answer
• Treasury bond ? Diversified mutual fund - Stock (correct answer)
question
Which of the following is generally true about 401(k) and 403(b) retirement plans? • They are plans offered through employers • They offer some tax benefits • They restrict when you can withdraw your money • All of the above
answer
• All of the above (correct answer)
