Financial Literacy Exam

Front

Which of the following investments is characterized by the following traits:
-Risky
-Ownership in a corporation
-Pays dividends
-Potential for reward is high
Options: Stocks, Bonds, Commodities, Real Estate

Back

Stocks

Front

Which of the following is the typical amount of time in which a borrower must pay off a mortgage loan? 5 years, 8 years, 30 years, 50 years

Back

30 years

Front

When receiving a mortgage loan, if an individual cannot make a large down payment, they will most likely have to pay for what?

Back

Private Mortgage Insurance

Front

When one invests in a commodity, they are investing in a what?

Back

Natural Resource

Front

When eating at a restaurant, one must consider which of the following additional costs to the price of their meal and sales tax? Interest fee, Reservation cost, Service fee, Tip

Back

Tip

Front

Banks offer the service of a safety deposit box, which can be used for what?

Back

Protect personal documents from potential loss

Front

Which financial institutions receive criticism for targeting people in poverty and other vulnerable populations through charging extremely high interest rates? Options: Pawn Shops, Check cashing services, Credit Unions, Payday lenders

Back

Payday lenders

Front

Which financial institutions can an individual visit to get money from a check without a traditional bank account? Options: Credit Union, Mortgage Company, Check cashing service, Payday Lender

Back

Check cashing service

Front

Rent-to-own agreements can negatively impact consumers because: Consumers do not have to pay cash for the item, Consumers will pay a high interest rate on the item, Consumers can immediately have access to the item, Consumers are limited from purchasing similar items

Back

Consumers will pay a high interest rate on the item

Front

Which of the following investments is characterized by the following traits:
-Investor loans money to a city, county government, or company
-Money is repaid after a certain date, plus interest is paid
-Generally considered a safe investment, although not insured by the FDIC
Options: Bonds, Exchange-traded fund (ETF), Savings Accounts, Mutual Funds

Back

Bonds