Wise Practice Test #1

One of Sage's seldom-used credit cards has been stolen without his knowledge. When he gets his monthly statement, he realizes that someone else has been using the card and reports it stolen. The maximum amount of the unauthorized purchase he is liable for is:

• $0

• Unlimited liability

• $50

• $25

Consumers who file for bankruptcy are still responsible for:

• Mortgage loans

• Credit card balances

• Car loans

• Tax claims and student loans (unless undue hardship)

Banks use savings account deposits to:

• give loans to consumers and businesses

• pay interest to checking account depositers

• pay bonuses to executives

• help out different charities in the area

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

• The policy builds a cash value

• The policy provides coverage for a lifetime

• The policy is available to all consumers

• The policy only pays a death benefit.

Robert wants to open a checking account and wonders if checking accounts pay interest. How would you answer his 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.

What is a credit score?

• A number used to determine how much credit to extend to a person.

• A measure used to indicate a person's gross wealth.

• A reward system that is based on the number of credit cards a person has.

• A formula based solely on a person's earnings.

A teenage boy has opened a checking account. He is surprised to find that though he is getting a written bank statement each month he is not getting his cancelled checks returned. The teenager should be aware that the reason cancelled checks are NOT returned is to

• protect him from providing opportunities for forgery.

• insure that he does not receive important materials he is likely to lose.

• lessen the bank's need to maintain records of check transactions.

• save the bank money associated with returning copies of these checks.

Which statement does NOT accurately describe a characteristic of cash value for whole life insurance?

• Policy that accumulates cash value is less expensive than a policy that does not accumulate cash value.

• When an insured person dies, the beneficiary will receive the death benefit but the insurance company keeps the cash value.

• Cash value grows gradually over time.

• If the policy is cancelled, you may be entitled to some or all of the accrued cash value.

Which factor would most likely lead to an increase the interest rate on a person's credit card?

• Number of purchases

• Late payments

• Total amount charged

• Number of cash advances

If a business wants to raise capital but not create debt, it can:

• Float a bond issue

• Issue common stock

• Borrow money from a commercial bank

• Borrow money from the government