Financial Literacy Quiz

Your take-home pay, or net income, is _________.

• the amount you receive after benefits, such as vacation pay and health insurance, have been added

• the total amount you earn

• gross income

• the amount you receive after taxes, insurance, or other costs have been subtracted

The amount of interest you earn on money in your savings account will depend on which factors?

• the interest rate, the time money remains in the account, and how the bank pays the interest

• the prime rate, your credit rating, and how you make the deposits

• the interest rate, how often you make deposits, and how the bank invests your money

• the amount of collateral, the amount in your checking account, and the balances on your credit cards

What type of financial institution must have a majority of their assets in housing-related loans?

• Credit Unions

• Savings Institutions

• Banks

• None of the above

A ________ allows deposits and withdrawals; may require a minimum balance to keep the account open; earns interest; and may limit the number of times you can withdraw money.

• regular savings account

• money market account

• certificate of deposit

• checking account

Which of the following assets is the most liquid?

• A certificate of deposit that comes due in six months

• The money in your wallet

• Ten shares of common stock

• The money in your savings account

Overdraft protection is _________.

• an automatic loan made to an account if the balance will not cover a transaction made on the account

• the use of a debit card to purchase an item at a retail store

• the percentage of increase in your account from earned interest

• the amount of interest that a financial institution would pay on a deposit

What type of financial institution is governed by federal and state laws and regulations?

• Credit Unions

• Savings Institutions

• Banks

• None of the above

All the following are ways to establish good credit except _________.

• pay your bills in full and on time

• always keep your promises to repay the money you borrow

• use your credit card to buy something you can’t really afford

• don’t write a check for more money than you have in your account

_________ earns higher interest; may require a higher minimum balance; and provides checks for withdrawals.

• regular savings account

• money market account

• certificate of deposit

• checking account

Charging on a credit card is basically _________.

• free money

• like using a co-pay

• using secured collateral

• taking out a loan