Career Prep Unit 6 Test

Which of the following is a function of banking and financial institutions in society?

• Providing access to loans and credit
• Promoting environmental sustainability
• Offering entertainment services
• Operating transportation services

How do checking and saving accounts differ?

• Checking accounts earn higher interest rates than saving accounts
• Saving accounts are primarily used for daily transactions
• Checking accounts offer limited access to funds
• Saving accounts focus on long-term saving goals

What is a distinguishing feature of a money market account?

• Higher interest rates than other saving accounts
• Access to a line of credit
• Linked to a credit card for purchases
• Check-writing capabilities

True or False: Jane is 15 and wants to start saving for college. She has a job making about $200 a week and decides to open a basic savings account to save her paycheck. This is the best option for her.

• True
• False

What is a credit score?

• The amount of money you owe on your credit cards
• The interest rate charged on your loans
• The number of credit cards you own
• The 3-digit number that represents your creditworthiness

How can responsible credit card usage impact your credit score?

• It has no impact on your credit score
• Responsible usage always leads to a decrease in your credit score
• It only impacts your credit score if you have a high income
• It can improve your credit score by establishing a positive payment history

What happens if you don't pay at least the minimum payment on your credit card by the due date?

• Your credit card gets canceled
• Your credit limit decreases
• You earn cash back rewards
• You are charged a late payment fee

What is the grace period on a credit card?

• The time to report a lost or stolen card
• The time to pay off your credit card balance without incurring interest charges
• The time to request a credit limit increase
• The time to redeem rewards points

How are interest charges calculated using the average daily balance method?

• Multiplying the initial deposit by the interest rate
• Subtracting any payments or credits made during the billing cycle
• Considering the balance at the end of the billing cycle
• Considering the balance at the beginning of the billing cycle

What is compound interest?

• Interest calculated only on the initial amount
• Interest calculated on the initial amount and previous interest
• Interest that changes over time
• Interest that remains the same throughout the term