Financial Literacy Quiz

What is an example of a source of income?

• Wages

• Expenses

• Taxes

• Debts

How does an exemption work in terms of income?

• Increases taxed income

• Reduces taxed income

• Has no effect on taxed income

• Doubles taxed income

What does liquidity refer to in financial terms?

• The ease of buying assets

• The degree of ease in which assets can be sold or accessed

• The difficulty of selling assets

• The cost of buying assets

What is a characteristic of gift cards?

• They never expire

• They can have a monthly inactivity fee after 12 months

• They increase in value over time

• They are only valid for one year

What is opportunity cost?

• The cost of an opportunity

• The next best alternative given up when a choice is made

• The financial gain from an opportunity

• The time spent on an opportunity

Which institutions charge the highest interest rates on loans?

• Banks

• Pawnshops, payday lenders

• Credit unions

• Supermarkets

What is an advantage of using a credit union?

• Higher interest rates on loans

• Lower interest rates on loans

• No interest on loans

• No loans available

What is overdraft protection?

• A feature that prevents all transactions

• A feature that allows overdrawing without fees

• A feature that prevents overdrawing by providing a loan

• A feature that cancels checks

What is compound interest?

• Interest added to principal – interest earned on interest

• Interest subtracted from principal

• Interest that does not accumulate

• Interest that is paid annually

What does the Rule of 72 help determine?

• The time it takes to triple an investment

• The time it takes to double an investment

• The interest rate needed to halve an investment

• The interest rate needed to triple an investment