Career Prep Final Exam 2024

Which of the following transactions will REDUCE your checking account balance immediately?

• Writing your monthly rent check which you will mail tomorrow
• Using your debit card to pay for groceries at the supermarket
• Using your credit card to pay for your school books
• Depositing a check at a local bank branch

How are credit unions and banks different?

• Typically, deposits at a bank are insured, but deposits at a credit union are not
• Banks charge overdraft fees, but credit unions do not
• Banks are owned by shareholders, while credit unions are owned by members
• Banks allow customers to do online banking, while credit unions are too small to provide that service

What would be a good time to spend money from your Emergency Fund?

• You lose your job but still have bills to pay
• Your friend tells you that you should buy as much Bitcoin as possible
• Your favorite artist releases a new album and you just have to buy it
• Your friends are going on an expensive trip an you would like to go with them

If you used the 50-30-20 rule of budgeting, how much money would you be saving?

• 20%
• 30%
• 50%
• 100%

The average American teenager is likely to spend MOST of their money on...

• Bills and utilities
• Transportation
• School-related items
• Food

How is gross pay different than net pay?

• Gross pay is for hourly workers, while net pay is for salaried employees
• Gross pay is always lower, while net pay is always higher
• Gross pay is the total you earned, while net pay has taxes deducted
• Gross pay is used for spending, while net pay is used for budgeting

What action corresponds to the advice "Pay yourself first?"

• Wait until the end of the month to determine how much you have leftover to save
• Set aside a fraction of your paycheck into a savings account before you start spending
• Spend your regular paycheck on needs and wants but funnel any extra money into saving
• Become self-employed so you're paying yourself instead of being paid by an employer

What is a bond?

• A type of loan you can get from the federal government that you pay back with interest
• An investment in which you loan money to a corporation or government and are paid back with interest and the principal that you originally lent to them.
• A type of loan you can get from a bank that you pay back with interest
• An investment in which you loan money to another individual and are paid back with interest

Which of the following is TRUE about investing?

• It guarantees a high rate of return over a short period of time
• It can help you grow your money through the power of compounding
• It is meant for achieving short-term financial goals
• It involves little risk because your returns are insured up to $250,000

Ben is 24 and wants to start saving for retirement. What can he do to set himself up for success?

• Wait until his 30s to start investing
• Invest 10-15% of his monthly salary
• Invest primarily in low-risk investments like bonds
• Delay his expected retirement age by 20 years