W!se Practice Test 3

Which of the following provides an increase in assets or wealth?

• Volunteering at a hospital

• Taking out a loan

• Having capital gains

• Running the marathon

The denominations of coins in the United States are:

• $.01, $.05, $.10, $.25, $.50, and $1.00

• $.01, $.30, $.50, and $5.00

• $.05, $.10, $.50, $.75, and $10.00

• Coins can be in any denomination a consumer desires

Mutual funds are:

• An investment portfolio managed by the investor

• An investment that holds a wide range of different investment instruments, providing diversification

• Usually less risky than investing in a money market

• Guaranteed to increase in value

Why is term life insurance usually the least expensive type of life insurance?

• The policy only pays a death benefit

• The policy builds a cash value

• The policy provides coverage for a lifetime

• The policy is available to all consumers

Which of the following is a disadvantage of using phone cards, debit cards, electronic transfers, and ATM cards?

• Consumers can make purchases without of writing check

• They expose consumers to greater likelihood of identity theft

• They slow down the economy's recovery

• They decrease availability of currency in the economy

The process of setting aside money and putting it to work by having it earn interest or dividends or gain value in the equities market with the idea of having additional funds to use in the future is described as:

• Savings and investing

• Making Money

• Setting goals

• Diversifying

Joan wants to open a checking account and wonders if checking accounts pay interest. How would you answer her question?

• All checking accounts pay interest

• Some types of checking accounts pay interest

• Checking accounts never pay interest

• Checking accounts pay interest if the account balance does not fall below $300.00

The purpose of Insurance is NOT to:

• Diversify an investment portfolio

• Share risk with other policy holders and the insurance company

• Protect assets

• Protect against potential losses

Generally, the higher the deductible on an insurance policy, the

• greater the premium

• lower the premium

• more frequently the premium has to be paid

• less frequently the premium has to be paid

A credit card finance charge is:

• The sales tax

• The cost of the items purchased

• The dollar amount it cost to use credit

• A service fee