Final Exam Financial Literacy

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Why is it a good idea to treat your savings account as a fixed expense each month?

• Money can be deposited before it is used for discretionary spending.
• It is another source of income.
• Loans can be paid off faster instead of spending the money.
• More income is earned by accruing more interest.

Banks and lenders use credit scores to determine . . .

• The likelihood that someone is able to repay debt
• A person's financial responsibility
• How much collateral someone has available to put up for a loan
• How successful someone is

What does it mean to use a secure credit card?

• You have a higher level of security against identity theft.
• It tells merchants that your card has been stolen in the past.
• You can only charge up to what has already been pre-paid on the card.
• You have bad credit history.

Which of the following entities do NOT have access to your credit report?

• Banks who are considering loaning you money
• Credit card companies who are considering giving you an account
• Potential employers who are looking for new employees with good credit
• Potential landlords who may rent you an apartment or house

Which of the following is the first step you should take if your identity is stolen?

• Contact the police to file a report
• Contact the fraud departments at all three major credit agencies
• Contact the bank and credit card companies where you hold accounts
• Contact your parents

You have three short-term goals for the end of the school year which include: going to the lake with your friends, which will cost $200; putting a deposit on an apartment, which will cost $350; and putting a down payment on a motorcycle for $150. How should you achieve these goals?

• Ask your parents for help
• Save money each month for the next year
• Use your college fund for your goals
• Use your emergency fund for your goals

The location of which of the following is important when considering a bank?

• ATMs
• Headquarters
• Vault
• Bank employees’ homes

Checks or debit purchases you have made, but do not show up on your bank statement, are referred to as which of the following?

• Non-reconciled
• Outstanding
• Cleared
• Completed