Financial Literacy Practice Test #2

To AVOID being charged a late fee on a credit card bill, a person must pay the payment:

• on the day the credit card bill is due

• by mail on the date the credit card bill payment is due

• so that the payment is received by the credit card company on or before the due date

• a week after receiving the bill from the credit card company

What should a person do when they receive a store gift card?

• find out if the store is allowed to reduce the value of the store gift card for any reason

• apply for the store's credit card to use when making a purchase with the store gift card

• exchange the store gift card for cash if this is a store they do not like

• avoid using the store gift card so it increases in value by earning interest

One responsibility of the Federal Reserve System (FED) is to:

• limit the number of depositors a bank can have

• encourage banks to be open on weekends and nights

• directly influence interest rates charged by banks

• provide loans to individuals that have declared personal bankruptcy

Which of the following is considered a source of personal income?

• interest charged on a credit card

• capital gains from the sale of stock or real estate

• money received from student loans

• money borrowed to purchase a car

Car insurance companies are likely to place drivers in the "assigned risk pool" if they:

• are over the age of 65

• are born outside of the US

• have had several recent accidents

• have teenage children

The New York Stock Exchange (NYSE) is a:

• list of blue chip stocks

• place to barter goods and services

• marketplace where stocks are bought and sold

• government regulatory agency

A person who wants to begin investing part of his salary for retirement should ask his employer if the company has a:

• healthcare plan

• childcare plan

• tuition reimbursement

• 401(k) plan

A benefit of buying term life insurance as opposed to whole life insurance is that term insurance usually:

• offers a greater amount of insurance coverage for a specific period of time at a lower cost

• builds more cash value over time for the policy holder

• provides lifetime insurance coverage for a fixed cost per year

• combines lifetime insurance coverage with an opportunity for building savings at a reasonable cost

A woman is offered two jobs; one with a salary of $27,000 plus benefits and the other at $30,000 with no benefits. It would be a wise financial decision for her to take the:

• $27,000 job, if the benefits package is worth more than the $3,000 difference in salary

• $27,000 job, because her taxes will be lower

• $30,000 job, since she has no need for medical benefits because she is healthy

• $30,000 job, because if she is making a higher salary, she is guaranteed quarterly sales increases

Generally, a student who drops out of high school without graduating and who does NOT get additional training or education is:

• likely to have fewer job opportunities than a high school graduate

• likely to earn more money over a lifetime than a high school graduate

• well prepared to take advantage of opportunities for career advancement

• well prepared for a professional career