Personal Finance Review

What is the difference between a bank and a credit union?

• Banks are non-profit institutions, while credit unions are for-profit.

• Banks are for-profit institutions, while credit unions are non-profit.

• Both banks and credit unions are for-profit institutions.

• Both banks and credit unions are non-profit institutions.

Which type of institution typically offers lower interest rates on loans?

• Banks

• Credit Unions

• Both offer the same rates

• Neither offers loans

What is a payday loan?

• A long-term loan with low interest

• A short-term loan with high interest

• A loan for purchasing a home

• A loan for buying a car

What is a disadvantage of using both a title pawn loan and a payday loan?

• They have low interest rates

• They are easy to repay

• They can lead to a cycle of debt

• They improve credit scores

What is a fixed interest rate?

• An interest rate that changes over time

• An interest rate that remains the same throughout the loan term

• An interest rate that is calculated daily

• An interest rate that is only applied to savings accounts

Which type of interest is generally more expensive over time?

• Simple interest

• Compound interest

• Fixed interest

• Variable interest

What is the primary purpose of auto insurance?

• To cover health-related expenses

• To protect against property damage

• To provide financial protection against car accidents

• To insure life events

Which of the following is a way to protect yourself against identity theft?

• Shredding important documents

• Posting a picture of your pay stub

• Giving your bank account information to a friend

• Writing all your passwords down on a sticky note by your computer

Which of the following is a benefit of having a high credit score?

• Higher interest rates on loans

• Lower interest rates on loans

• Fewer loan options

• Increased insurance premiums

What is the main purpose of a savings account?

• To provide a line of credit

• To earn interest on deposited funds

• To offer investment opportunities

• To pay monthly bills