Spring 2025 SSEPF3 Financial Systems and Banking Test Review

Front

In which of the following situations might it be best to pay with a debit card? When renting a car or purchasing airline tickets., When making everyday purchases at the grocery store or coffee shop., When paying for a service, such as lawn service, a haircut, or leaving a tip at a restaurant., When making a purchase at a yard sale.

Back

When making everyday purchases at the grocery store or coffee shop.

Front

In which of the following situations might it be best to pay with cash? Options: In a small transaction, such as purchasing a coffee from a café., When making a large purchase for an expensive item., When purchasing an item online., When paying a recurring monthly bill.

Back

In a small transaction, such as purchasing a coffee from a café.

Front

What is a major disadvantage of using a title pawn or payday lender?

Back

They can lead to a cycle of debt due to high fees and interest rates.

Front

What is the Rule of 72?

Back

It is a way to calculate how long it will take for an investment to double given a fixed annual rate of interest.

Front

How does investing in the stock market differ from putting money in a savings account at a bank?

Back

Investing allows you to accumulate wealth for retirement while saving is best for short-term purchases or emergency funds.

Front

What is one question to consider when deciding whether to open a Roth IRA or a Traditional IRA? Options: Do I want a guaranteed return of 6% or 8%? Do I want to pay taxes now or later? Do I want to take advantage of my employer's matching contribution? Do I want to take on more or less risk?

Back

Do I want to pay taxes now or later?

Front

All of the following are downsides to being unbanked EXCEPT:
- Lack of access to credit
- Lost time paying bills
- Difficulty making cashless purchases

Back

Lack of fees associated with banks

Front

Choose the statement about prepaid cards that is FALSE: Prepaid cards typically include a lot of fees. Prepaid cards are a useful option for someone who is unbanked to make online purchases. Prepaid cards are a great way to build credit. Prepaid cards are usually accepted everywhere that debit and credit cards are accepted.

Back

Prepaid cards are a great way to build credit.

Front

Juan saved $1000 from his summer job cleaning pools. Which of these account types would work best for him if he doesn't need access to the money for a number of years AND he wants to earn the highest interest rate? Regular savings account, 401(k) account, Checking account, Certificate of Deposit

Back

Certificate of Deposit

Front

Why is this the case? Options: Money is an accepted unit of account, while baseball cards are not. Investments in money are less risky than investments in baseball cards. Money is an accepted medium of exchange, while baseball cards are not. The value of money is more easily divisible than the value of baseball cards.

Back

Money is an accepted medium of exchange, while baseball cards are not.