DECA - Personal Financial Literacy Exam // Practice 1

Jack traded in his old car for a new one with better gas mileage. He paid 20% down on his new car's $23,670 cost with tax and title. The car dealer then deducted the value of the trade-in, $4,500, from the remaining amount that Jack owed. After deducting his down payment and the value of the trade-in, how much would Jack still owe on the car before interest is added?

• A. $14,436

• B. $12,793

• C. $18,963

• D. $16,637

As part of the debtor-creditor relationship, borrowers have the right to

• A. dispute inaccurate information on their credit reports.

• B. delete negative information from their credit reports.

• C. ask for credit score increases on their credit reports.

• D. submit requests for multiple credit reports per year.

Which of the following is an example of insider trading:

• A. A company's chief executive officer provides the company's financial auditor with material or financial information.

• B. A senior manager tells a stakeholder that the government did not approve a new product because it did not meet safety standards.

• C. A financial planner advises a client to invest a certain percentage of their money in a closed-end mutual fund.

• D. A bank manager reveals to a customer that the interest rates for 30-year mortgages have reached an all- time low.

What is a primary function of the Securities Exchange Commission (SEC)?

• A. Sells new securities on behalf of public companies

• B. Distributes annual dividends to public corporations' stockholders

• C. Conducts the financial-statement audits for public corporations

• D. Oversees the registration process for initial public offerings (IPOs)

A researcher should consider an author's expertise in a particular topic when assessing the validity of written articles and publications to

• A. evaluate the author's level of credibility.

• B. verify the timeliness of the information.

• C. confirm personal understanding of the information.

• D. analyze the author's emotional intelligence.

6. Which of the following is the best source of information regarding your gross pay, deductions, and net pay:

• A. Timecard

• B. W-4

• C. Pay stub

• D. Bank

Workers often increase their productivity to

• A. take longer vacations.

• B. obtain more benefits.

• C. pay higher taxes.

• D. earn higher wages.

Which of the following products are most likely to be subject to sales tax:

• A. Light bulbs, homes, and prescription drugs

• B. iPads, sweaters, and books

• C. Shoes, milk, and inherited items

• D. School supplies, land, and candy

Anita is self-employed. Which of the following is a true statement regarding her tax obligations:

• A. She must pay the entire amount of her payroll taxes.

• B. She does not have to pay income taxes.

• C. Her taxes are called excise taxes.

• D. She is taxed at a lower rate than people who are not self-employed.

Kale, who earned $38,900 in income last year, receives a raise of 3%. Inflation is 5%. What is Kale's loss in purchasing power?

• A. $3,112

• B. $778

• C. $1,945

• D. $1,167