Personal Finance Diagnostic

John is a senior in high school and is expected to graduate in June.  He earned a score of 28 on his ACT and have a GPA of 3.8 (on a 4.0 scale).  He enjoys school, and wants to continue his education and pursue a degree in medicine.  Of all post-high school options, which would be most realistic for him?

• Work full-time
• Apply to a four-year college to earn a Bachelor's Degree
• Enroll in a technical or trade school to learn a specific skill or trade

The first step in making a decision is to: 

• A. Brainstorm possible solution
• B. Describe the problem or situation
• C. Consider the consequences
• D. Evaluate the decision

A key difference between commercial banks and credit unions is that:

• Commercial banks are ‘for‐profit’ and credit unions are ‘not‐for‐profit’
• Commercial banks typically pay higher interest rates than credit unions
• Credit unions are more commonly located in rural area while commercial banks are more commonly located in urban areas
• Commercial banks offer more services, such debit cards, and online banking, than creditunions.

Since Taylor was a young child she has kept her savings in a piggy bank. She likes this method ofsaving because she can have immediate access to the money if she needs it. Recently, in a class atschool, discussion focused on why depository institutions are safer than her piggy bank. Some students’ comments were based on fact while others were based on myths. Which aspect of security at a depository institution is NOT TRUE?

• Depository institutions have insurance protection for up to $250,000 per depositor peraccount type so if something happened to the money in the bank, you would get it back aslong as the deposited amount was no more than the insurance limit.
• All money stored at a depository institution is kept safe at all times by numerous security measures.
• Information about depositors and their accounts is kept in secure data storage.
• Depository institutions have insurance protection. Depositors can have multiple accountsinsured at the same depository institution as long as each account has no more than$100,000.

People keep a personal budget to help them

• set and reach financial goals.

• earn promotions at work.

• buy with credit.

• buy anything they want.

Which one of the following terms is an organized spending plan for one's money?
SSEPF1b

• Cost System Analysis
• Bankruptcy
• Budget
• Profit and Loss Statement

Institution that accepts savings at interest and lends money to savers chiefly for home mortgages, but may also have checking and other accounts.
SSEPF2a

• commercial bank
• savings and loan
• credit union

Which retirement plan will earn the most because it is not charged an annual tax?

• IRA

• Roth IRA

• Commercial Savings Account

• 401(k)

How do commercial banks make a profit?

• commercial banks are non-profit institutions.

• charge borrowers and depositors the same interest rate

• pay depositors a lower interest rate than they charge borrowers

• charge borrowers a lower interest rate than they charge depositors

Which describes the risks & returns of investing in stocks?

• lowest risk and the highest potential returns

• highest risk and the lowest potential returns

• highest risk and the highest potential returns

• lowest risk and the highest potential returns