WISE Practice Test #8

Front

The advantage of having a Roth Individual Retirement Account (IRA) is that

Back

Money withdrawn from the account after age 59 ½ is tax free

Front

Money in an emergency fund should be used to pay for

Back

Necessary expenses when a person is not working

Front

What is a characteristic of a payday loan?

Back

The loan must be paid back in a short period of time

Front

If a person has a savings account at a nonprofit financial institution that is owned by its members, that person banks with

Back

A credit union

Front

What should a person consider before buying a cell phone insurance policy?

Back

The cost of insurance compared to the cost of replacing the phone.

Front

The credit card APR is the

Back

Annual rate of interest

Front

The cost of buying an insurance policy is known as the

Back

Premium

Front

Instead of using a credit card, a person used her debit card linked to her checking account. By doing this she

Back

Avoided borrowing

Front

People invest in stocks because

Back

Stocks have higher growth potential than traditional bank accounts

Front

Why would a person put a stop payment on a check?

Back

To prevent anyone from cashing a check that was lost or stolen