W!SE Practice Test 4 - Difficult

Front

What is a revolving charge card?

Back

A type of credit card that allows the cardholder to make purchases up to a certain limit and pay off the balance over time, with interest charged on the unpaid balance.

Front

What is the maximum liability for unauthorized purchases on a stolen credit card if reported promptly?

Back

$50, as per the Fair Credit Billing Act.

Front

Which financial product may pay a dividend?

Back

Common stock, which represents ownership in a company and may provide dividends to shareholders.

Front

What carries the greatest risk when investing an inheritance for future use?

Back

Common stocks, as they can fluctuate significantly in value compared to savings accounts, bonds, or checking accounts.

Front

What are travelers checks?

Back

Travelers checks are prepaid checks that function as cash and can be easily replaced if lost.

Front

What is the difference between a debit card and a credit card?

Back

A debit card withdraws money directly from a checking account, while a credit card allows borrowing up to a limit to be paid back later.

Front

What is an installment card?

Back

A type of credit card that requires the cardholder to pay off the balance in fixed payments over a specified period.

Front

What is a savings account?

Back

A bank account that earns interest on deposits and is used for saving money.

Front

What is a money market account?

Back

A type of savings account that typically offers higher interest rates and may require a higher minimum balance.

Front

What is a certificate of deposit (CD)?

Back

A savings product that offers a fixed interest rate for a specified term, with penalties for early withdrawal.