Personal Finance Final Exam Part 2 Review Spring 2025

When making a decision about a financial product (loan, savings account, credit card, etc.), which of these pieces of advice is LEAST valuable?

• Read the fine print of any disclosures so you understand the fees and terms of your account

• Do research to learn more about each of the options

• Compare products based on the factors you personally find most important

• Choose the product with the most advertisements

Which of the following will result in your paying the LARGEST amount of interest to the credit card company?

• Paying off your balance every month

• Making the minimum payment every month

• Paying 20% of your credit card balance every month

• Saying 'credit' every time the cashier asks 'Debit or credit?'

What is a mutual fund?

• A loan taken out to buy shares in a company

• A government program that provides retirement benefits

• A pool of money collected from multiple investors to invest in stocks, bonds, or other assets.

• A type of savings account with a fixed interest rate

Why are scholarships important for students pursuing higher education?

• They guarantee admission to any college or university

• They offer loans that must be paid back after graduation

• They provide financial aid that does not need to be repaid

• They are only available to students with high academic scores

Which of the following statements about car insurance is TRUE?

• If you are in an accident, the other driver cannot sue if you have car insurance

• If you cause an accident and another driver is injured, your insurance will cover portions of his/her medical bills

• If you have insurance and are pulled over for speeding, you won't get 'points' on your license

• If you pay your premium on-time every month, you won't have to pay anything extra if you are in an accident

Which of the following people is MOST likely to be a victim of identity theft?

• Morgan, who shreds all documents containing personal information before throwing them away

• Jordan, who uses different, strong passwords for various accounts

• Chelsea, who regularly checks her bank account balance while connected to the WiFi at her local cafe

• Abby, who avoids posting on social media about topics that could be used as security questions

Which description of the difference between saving and investing is MOST accurate?

• Saving and investing are the exact same thing

• If you have less than $10,000 in an account, what you are doing is saving. If you have more than $10,000 in your account, you are investing

• Investing is best for the short-term and for emergencies while saving is best for the long-term

• Savings accounts provide a stated rate of return that is less risky. On the other hand, investors do not know what their return will be, making investing riskier.

What is the purpose of a sinking fund?

• To cover regular monthly expenses like rent and utilities

• To save money for a specific future expense or goal

• To pay off existing credit card debt

• To invest in the stock market for long-term growth

Anna receives her first paycheck and realizes that her take-home pay is substantially less than the rate she was offered when hired. Which of the following would help explain this problem?

• Anna's pay is smaller than she anticipated because businesses typically pay high school students less than minimum wage

• Taxes, social security, and Medicare are being deducted from her pay

• Her company is downsizing and has decided to pay her less without notice

• Most employers charge a 'payroll fee,' which the company collects to offset the cost of preparing each employee's paycheck every pay period

Each of the following is a benefit of using online and mobile banking EXCEPT...

• You can eliminate overdraft fees

• You can transfer money electronically between accounts

• You can check your balances before you make a purchase

• You can keep an ongoing record of your deposits and withdrawals