Financial Literacy Quiz Set 2s

Which financial product has the most predictable income?

• Stocks

• Bonds

• Certificate of deposit

• Real estate

What action should a person take who must make a tuition payment at the end of August each year?

• Decide how much money will be needed and then place 1/12th of that amount in a separate account each month.

• Pay the tuition fee in full at the beginning of August.

• Borrow money from a friend to cover the tuition payment.

• Wait until the last minute to gather the funds needed for tuition.

When a borrower fails to repay a loan and there is a co-signer on the loan, the most likely result will be

• The co-signer will be held responsible for the repayment of the entire loan plus fees or penalties.

• The borrower will be given an extension to repay the loan without penalties.

• The loan will be forgiven entirely due to the co-signer's involvement.

• The lender will only pursue the borrower and not the co-signer.

When Mary bought a DVD player, she charged it on her credit card. Her purchase created a(an):

• Debt

• Asset

• Liability

• Equity

The type of credit card issued by an oil company, bank, or department store is:

• A revolving charge card

• A secured credit card

• A prepaid debit card

• A business credit card

What is a credit score?

• A number used to determine how much credit to extend to a person.

• A measure of a person's income level.

• A rating of a person's spending habits.

• A score that indicates a person's investment portfolio performance.

You have a $2,000 loss. Your insurance company pays you $1,500 on the claim for the loss. The $500 the insurance did not pay is a result of your policy having a:

• Deductible

• Co-payment

• Exclusion

• Limit of liability

Why is term life insurance usually the least expensive type of life insurance?

• It provides coverage for a limited time only

• The policy only pays a death benefit

• It accumulates cash value over time

• It requires regular health check-ups

Which of the following statements is usually true about individuals who are financially literate?

• They understand the basics of personal finance and money management

• They avoid all forms of debt

• They only invest in stocks

• They rely solely on financial advisors for decisions

Which financial product typically pays the highest rate of interest?

• Savings account

• Certificate of deposit

• Money market account

• Treasury bonds