2nd Semester Employment/Personal Finance-Exam-Review

Jonelle selects a student loan repayment plan with a 20-year term. One downside is...

• She won't receive any grace period with this plan.
• Her monthly payments will start out quite high and won't get lower until approximately year 10.
• She won't be able to open additional lines of credit until that debt is completely repaid.
• She will pay more in interest than if she had used the Standard repayment plan.

Which statement best describes the difference between a debit and credit card?

• Debit cards have low interest rates while credit cards have high interest rates
• Debit cards spend money from your own checking account while credit cards take out a loan from the credit company
• Debit cards are better to use in stores while credit cards are better for shopping online
• Debit cards allow you to view all your transactions online while credit cards only show your available credit limit

Kyle just got his financial aid award letter. In what order should he accept aid from first to last?

• Work-Study, Scholarships and Grants, Federal Student Loans, Private Loans
• Private Loans, Federal Student Loans, Work-Study, Scholarships and Grants
• Federal Student Loans, Scholarships and Grants, Work-Study, Private Loans
• Scholarships and Grants, Work-Study, Federal Student Loans, Private Loans

Which of the following accounts would be best for setting aside $1000 if you did not need access to the money for a number of years AND wanted to earn the highest interest rate?

• Online savings account
• Certificate of deposit
• Traditional savings account
• Checking account

Which definition best describes the FAFSA?

• The amount of money the federal government offers you in student loans
• The paperwork your bank has you complete in order to take out a personal student loan
• Paperwork you complete in order to have part of or all of your student loan debt forgiven
• An application you complete in order to determine eligibility for Federal government student aid

Nikki asks you for advice on how to improve her credit score. Which of the following options is the BEST advice to give her?

• Close any credit cards she's no longer using
• Spend more money on each of her credit cards
• When merchants ask, "Credit or debit?" always choose credit
• Pay down credit cards that are close to their credit limits on-time and consistently

Which of the following people is required to file taxes?

• Greg, who earned $320 through his online business
• Samira, who earned $1,000 babysitting and $2,500 at the ice cream store
• Neil, who earned $12,600 from his paid internship
• Pat, who earned $250 by mowing her neighbors' lawns

Jennifer is trying to save up for an emergency fund of $3000. Which saving strategy would likely be MOST effective in helping her meet her goal?

• At the end of the month put any leftover money in her checking account into her savings instead
• Set up a direct deposit of $75 from each paycheck to automatically get put into her savings account instead of her checking account
• Wait until she's paid off all of her credit card and student loan debt, and then start saving for an emergency fund
• Every month, after she's paid for rent, student loan and credit card debt, utilities, and groceries, put $50 or $100 into savings

Zoe buys three new lipsticks from a store at the mall. Which payment method would reduce the amount of money in her checking account?

• Pays with a prepaid card she loaded earlier in the month
• Uses her credit card and says, "Credit" when the cashier asks, "Credit or debit?"
• Uses her debit card and says, "Credit" when the cashier asks, "Credit or debit?"
• Pays with cash she had in her purse

Which person from this list is saving rather than investing?

• Yvonne, who puts $750 per month into her savings account earning 1% interest
• Danielle, who contributes 2% of her pay to her company's 401(k) plan
• Daryl, who uses his $5000 end-of-year bonus to buy Treasury bonds
• Alexis, who buys $100 worth of shares in an S&P 500 index fund every month