6.16: Financial Literacy Post Test

How do fixed expense differ from flexible expenses?

• Fixed expenses are monthly bills, while flexible expenses are one-time

• fixed expenses can be changed, while flexible expenses are optional

• fixed expenses are necessary, while flexible expenses are optional

• fixed expenses are larger than flexible expenses

What is the main role of the Federal Reserve Bank?

• To regulate insurance companies

• To manage the nation’s monetary policy and control interest rates

• To insure bank deposits

• To sell stocks

If you want to compare the overall performance of the stock market, which tool would you use?

• Stock market index

• Insurance deductible

• Money market account

• Estate tax

What is the main difference between a savings account and a money market account?

• Money market accounts usually offer higher interest rates and may require higher minimum balances

• Savings accounts are only for businesses

• Money market accounts are not insured by the FDIC

• Savings accounts have no withdrawal limits

What is a key difference between credit cards and debit cards?

• Debit cards have higher interest rates than credit cards

• Credit cards offer a line of credit, while debit cards use funds directly from your bank account

• Debit cards allow you to borrow money from the bank

• Credit cards require a PIN for every transaction

What is the primary purpose of a credit report?

• To list your personal assets

• To provide a detailed history of your credit activity

• To calculate your annual income

• To track your employment history

Which of the following is a benefit of having a trust as part of your estate plan?

• It guarantees no taxes will be paid

• It allows assets to be managed and distributed according to your wishes, possibly avoiding probate

• It replaces the need for a will

• It is only for people with children

Which of the following is a government-issued debt security with a maturity of less than one year?

• Mutual fund

• Treasury Bill

• Certificate of Deposit

• Stock

Which of the following is a benefit of using a credit card over a debit card?

• Debit cards provide better fraud protection

• Debit cards have no spending limits

• Credit cards often offer rewards and cash back programs

• Credit cards do not affect your credit score

If you are planning for long-term financial security, which combination of accounts and investments would be most effective?

• Only a savings account

• A mix of retirement accounts, mutual funds, and bonds

• Only stocks

• Only certificates of deposit