W!se Financial Literacy Practice Test

If a person makes a deposit of $10,000 or more into a bank account, the bank must notify the

• US Treasury Department

• Federal Deposit Insurance Corporation (FDIC)

• State Banking Commission

• Federal Reserve Board

The best suggestion you gave a friend who is writing a check for the first time is:

• Date the check because it is usually proof of payment

• Use pencil to permit changes

• Make the check payable to cash

• Use the checkbook stub or register to keep a record of the date you write the check

Which documents should be stored in a safe-deposit box?

• Checkbook statements

• Copies of current and past budgets

• Current paycheck stubs

• Mortgage loan papers

The phrase used for putting money into a savings account is:

• Verifying the account

• Balancing the account

• Making a deposit

• Making a withdrawal

When a person declares bankruptcy that fact will appear on the person's credit report

• for a 3 year period

• for a 10 year period

• until the person repays all debts owed

• until the person is able to receive a new credit card

A person has three credit cards with very large outstanding balances and is unable to make payments on any of them. Which action should the person take?

• Notify the credit reporting agency in order to avoid a late fee

• File for bankruptcy in order to maintain ones current credit score

• Notify the credit card companies in order to negotiate a new payment plan

• Contact the Internal Revenue Service in order to avoid paying income tax this year

Which of the following is considered to be open-end credit?

• A mortgage

• A car loan

• Department store charge card

• Installment loans

When a person brings an item to a pawnshop to obtain cash, the transaction is considered

• a collateralized loan

• a custodial payment

• an unsecured loan

• a sales agreement

What is meant by an uncollateralized loan?

• A loan not backed by a co-signer who agrees to cover the amount of the loan

• A personal loan without assets to cover the loan amount

• A home equity loan

• A loan taken on a life insurance policy

What is a credit score?

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

• A measure of 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