Financial Literacy Quiz

What type of loan would be most suitable for Hermione?

• Auto loan

• Small business loan

• Mortgage

• Personal loan

If Hermione struggles to repay the loan, which federal agency might be able to help with restructuring or refinancing?

• The Department of Treasury

• The Securities and and Exchange Commission (SEC)

• The Small Business Administration (SBA)

• The Federal Deposit Insurance Corporation (FDIC)

What is the primary function of an organization like the FDIC?

• To regulate stock markets

• To insure deposits in case of bank failure

• To set interest rates

• To provide loans to businesses

What is the main difference between a checking account and a savings account?

• Checking accounts offer higher interest rates.

• Savings accounts allow for a higher number of withdrawals.

• Checking accounts are primarily for electronic transactions. (This is the best answer)

• Savings accounts are used for business transactions only.

Which of the following is a primary function of the Federal Reserve?

• To collect taxes

• To promote maximum employment, stable prices, and moderate long-term interest rates

• To provide social security benefits

• To manage national parks

How does the Federal Reserve influence interest rates?

• By directly setting rates for individual loans

• By adjusting the federal funds rate

• By controlling the national budget

• By managing international trade agreements

What is the role of investment banks in the financial system?

• To provide checking and savings accounts

• To connect businesses with investors

• To offer auto loans and mortgages

• To manage government pension funds

What is a potential risk associated with investing in a new business venture like Tony's?

What factors typically affect a person's credit score?

• Age and gender

• Payment history, credit utilization, and credit mix

• Educational background and job title

• Political affiliation and religious beliefs

What steps can Dr. Frankenstein take to improve his credit score?

• Cosigning on a loan for a friend

• Making consistent on-time payments for existing debts

• Increasing his spending to utilize more credit

• Asking the government to raise the minimum wage