FIN LIT FINAL

Why is it important to check your bank statements regularly?

• To monitor transactions for errors or fraud
• To qualify for overdraft protection
• To receive bank rewards
• To apply for a credit card
• To enter bank sweepstakes

Which of the following statements about savings accounts is FALSE?

• Savings accounts pay interest on the money you deposit.
• Savings accounts allow an unlimited amount of withdrawals each month.
• Savings accounts may require you to maintain a minimum balance to avoid paying a fee.
• Savings accounts are best used to store money for longer-term goals.

What is a direct deposit?

• A wire sent through the post office
• A check that must be manually deposited
• A mobile banking alert
• A digital transfer of money from an employer or organization directly into your account
• A feature used only by government agencies

Fill in the blanks with the correct responses. If you follow the 50-30-20 rule of budgeting, you'll be putting 50% of your monthly income toward _______________, 30% of your monthly income toward _____________, and 20% of your monthly income toward ______________.

• Needs, wants, savings
• Savings, needs, wants
• Needs, savings, wants
• Wants, needs, savings

What is compound interest?

• Interest calculated only on the initial principal amount.
• Interest that is deducted from the principal amount.
• Interest calculated on the initial principal and also on the accumulated interest of previous periods.
• Interest that remains constant over time.
• Interest that is only applicable to short-term loans.

Experts recommend that you accumulate enough to cover 3 to 6 months of _________________ in your emergency fund?

• Total Living expenses
• Months
• Entertainment expenses
• Clothing expenses
• Transportation expenses

This is a type of investment designed to match the performance of a specific market index, such as the S&P 500.

• An Index Fund
• A 529 plan
• A 401K
• A Bond
• Social Security

What is the primary purpose of an emergency fund?

• To pay for vacations and leisure activities.
• To cover unexpected expenses, such as medical bills or car repairs.
• To invest in stocks and bonds for long-term growth.
• To save for a down payment on a house.

What is a payday loan?

• A long-term loan with low interest rates.
• A short-term, high-interest loan typically due on the borrower's next payday.
• A loan specifically for purchasing a house.
• A government-subsidized loan with flexible repayment terms.
• A loan with no interest or fees.

What does Maslow's Hierarchy of Needs describe?

• A guide to building better time management skills.
• A ranking of professional skills for workplace success.
• A classification of personality traits based on behaviors.
• The levels of human needs, from basic survival to self-fulfillment.
• A chart explaining how ecosystems function.