Financial Literacy Quiz 2

What form do employers provide to their employees to report annual wages and taxes withheld?

• W2

• W4

• 1099

• 1040

When you start a new job, which form do you fill out to determine the amount of taxes to be withheld from your paycheck?

• W2

• W4

• 1099

• 1040

What is the term for the money that is taken out of your paycheck for taxes before you receive it?

• Tax refund

• Tax withheld

• Tax deduction

• Tax credit

What is the original amount of money borrowed or invested, before any interest or earnings?

• Dividend

• Capital

• Principle

• Asset

Which type of bank account typically offers a higher interest rate in exchange for higher balance requirements?

• Checking account

• Savings account

• Certificate of Deposit (CD)

• Money Market Account

What is the term for the ownership interest in a company or property, which can be bought, sold, or traded as an investment?

• Liability

• Asset

• Equity

• Bond

What does APR stand for, and what does it indicate?

• Annual Percentage Rate; the true cost of borrowing money including interest and fees

• Average Percentage Rate; the average rate of interest over the year

• Annual Principal Rate; the yearly rate at which the principal amount is paid

• Adjusted Percentage Rate; the adjusted rate of interest after inflation

What type of insurance policy provides coverage for a specified period and typically does not build cash value?

• Whole life insurance

• Term life insurance

• Universal life insurance

• Variable life insurance

What is the main purpose of life insurance?

• To protect your assets

• To provide financial support to your dependents in case of your death

• To invest in the stock market

• To save for retirement

Which of the following is not typically considered when calculating your taxable income?

• Wages and salaries

• Interest earned on savings accounts

• Life insurance payout upon death

• Bonuses