Wise Financial

A person receives a $200 gift card. It is important for the person to

• know that the card will earn interest after two month of inactivity

• make purchases that cost more than the card’s value

• cash the card at a bank where the person has an account

• read the conditions on the card or packaging about inactivity fees

Which is the most important question to ask when comparing credit card offers?

• What is the annual percentage rate (APR) on the credit card?

• Can credit card payments be made before the due date?

• How many people are using the card?

• What time of the month are the payments due?

A person has a car loan with a 10% interest rate. The loan would cost the least amount if it is paid back in

• 5 years

• 6 years

• 3 years

• 4 years

Which approach to money management indicates an understanding of the time value of money?

• saving money in a safe at home

• saving money in an account that earns interest

• using a prepaid credit card for all purchases

• using debit card for all purchases

A stock is characterized as a “growth” stock because the expectation is for the corporation to

• provide shareholders with dividends

• have significant increases in sales and earnings

• pay a high rate of interest monthly

• issue bonds to investors

The value of buying insurance for a cell phone is to

• permit an upgrade to a newer model cell phone

• be able to change the cell phone service provider

• be able to replace the cell phone if it is lost or stolen

• lower the cost of roaming charges on the cell phone

A person who is interested in earning investing income from stocks is generally advised to buy stocks that pay

• dividends

• premiums

• awards

• interest

A benefit of using a debit card is that it provides a way to

• earn additional income

• limit the amount of cash a person needs to carry

• improve a person’s credit rating

• earn interest on purchases

The purpose of having a diversified investment portfolio is to

• avoid paying income taxes

• lower the investment risk

• eliminate the need for working with a professional

• lower the amount of money needed for an investment

One advantage of having a bank savings account is that it

• offers depositors a higher interest rate on United States government saving bonds

• protects a person from having to pay bank charges or late fees on other accounts at the bank

• guarantees depositors interest-free loans

• is a reliable way to earn interest while establishing a personal financial history