8. What is the purpose of a resume when applying for a job?

a) To showcase your skills and qualifications

b) To request a loan from a bank

10. What is the purpose of insurance?

a) To protect against financial loss

b) To increase your credit score

11. What is the difference between a debit card and a credit card?

a) A debit card is linked to your bank account, while a credit card allows you to borrow money.

b) A debit card is used for online purchases, while a credit card is used for in-store purchases.

c) A debit card has a higher interest rate than a credit card.

d) A debit card requires a credit check, while a credit card does not.

12. What is the purpose of a 401(k) retirement plan?

c) To provide income during retirement

a) To save money for a down payment on a house

b) To invest in the stock market

13. What is the purpose of a credit score?

a) To determine your eligibility for a loan or credit card

14. Which of the following is an example of a tax deduction?

b) Donating to a charitable organization

a) Paying off a credit card debt

15. What is the purpose of a checking account?

c) To easily access your money for day to day spending via debit card, check or ACH

a) To earn interest on your money

16. What is the purpose of a savings account?

a) To hold money long term and earn interest on your money

17. What is the stock market?

d) A place to buy and sell stocks

a) A place to buy and sell groceries

c) A place to invest in real estate

19. What is the purpose of a loan?

c) To borrow money for a specific purpose

a) To save money for a vacation

b) To increase your credit score

20. What is the purpose of a credit card?

d) To borrow money for purchases under a certain limit that must be paid back promptly

b) To earn interest on your money

21. Why is creating a budget so important? (Select all that apply)

It can help you reach your savings goals for what you want or need.

It can help you make better financial decisions.

It can help you see your spending habits so you can adjust them to what you want or need.

It can help you keep track of your neighbor's financial habits.

It can help you get a better job.

22.When should a person begin contributing to a retirement plan?

Before deciding to start a family

Upon collecting Social Security

23.A person choosing a mortgage usually selects a fixed-rate loan because she knows that

The interest rate remains the same for the life of the mortgage

Her income will increase within the next three years

The interest rates are going down

Her homeowners insurance premiums will be lower

24.What does it mean to buy a share of stock in a company?

Owning a portion of the company.

Borrowing money from the company.

25.Why is comparison shopping important?

It can help you find the best deal, saving money.

It ensures you always buy the most expensive product.

It takes up time that could be spent buying impulsively.

Retailers prefer customers who do not compare shop.

Financial Literacy Final Exam: 26-Question Practice Test

26 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

1. What is the purpose of budgeting?

a) To track your expenses

b) To save money for a vacation

c) To increase your credit score

d) To invest in the stock market

2.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

2. Which of the following is a form of investment?

a) Buying a car

b) Opening a savings account

c) Purchasing stocks

d) Paying off a loan

3.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

3. What is the purpose of paying taxes?

a) To support the government's expenses

b) To reduce your income

c) To increase your credit score

d) To invest in real estate

4.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

4. What is the role of a bank in the financial system?

a) To provide loans to individuals and businesses

b) To sell stocks and bonds

c) To prepare tax returns

d) To offer insurance policies

5.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

5. Which of the following is a benefit of saving money in a bank?

a) Earning interest on your savings

b) Avoiding taxes on your income

c) Increasing your credit score

d) Access to free financial advice

6.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

6. What is the consequence of spending more money than you earn?

a) Building wealth

b) Increasing your credit score

c) Going into debt

d) Saving for retirement

7.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

7. Which of the following is a factor that affects your credit score?

a) Age

b) Gender

c) Ethnicity

d) Payment history

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Financial Literacy Final Exam

1. What is the purpose of budgeting?

2. Which of the following is a form of investment?

3. What is the purpose of paying taxes?

4. What is the role of a bank in the financial system?

5. Which of the following is a benefit of saving money in a bank?

6. What is the consequence of spending more money than you earn?

7. Which of the following is a factor that affects your credit score?

8. What is the purpose of a resume when applying for a job?

9. Which of the following is an example of a fixed expense?

10. What is the purpose of insurance?

Access all questions and much more by creating a free account

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