WorksheetsWise Financial Literacy Test Prep (Part 4 of 4)
Total questions: 25
Worksheet time: 13mins
Name
Class
Date
1.
76. The maximum amount of money a person can borrow is called a credit
a)
A. history.
b)
B. rating.
c)
C. report.
d)
D. line.
2.
77. Which of the following can help a person lower her personal risk of loss?
a)
A. Insurance.
b)
B. A will.
c)
C. Mutual funds.
d)
D. Home ownership.
3.
78. If a car was damaged in a flood, which type of car insurance would typically cover the damage to the car?
a)
A. Universal.
b)
B. Term.
c)
C. Disability.
d)
D. Comprehensive.
4.
79. How should a person decide how much coverage she needs when selecting renters insurance?
a)
A. Do online research to find out the minimum coverage requirement.
b)
B. Ask salespeople from several different insurance companies.
c)
C. Determine the dollar value of personal property to be covered by insurance.
d)
D. The amount of insurance is the same for everyone.
5.
80. Car insurance is more expensive for teenage males than teenage females because studies have shown that
a)
A. male teenagers have a greater number of accidents than female teenagers.
b)
B. more male teenagers take driver education classes than female teenagers.
c)
C. female teenagers do not drive often.
d)
D. female teenagers frequently own their cars.
6.
81. A person had an Apple computer that was destroyed in a fire. She was able to buy a new Apple computer because her insurance policy had the following benefit
a)
A. actual cash value.
b)
B. replacement value.
c)
C. limited risk.
d)
D. unlimited claim.
7.
82. If a driver receives several traffic tickets, the cost of the car insurance will probably
a)
A. increase.
b)
B. decrease.
c)
C. stay the same.
d)
D. be billed monthly.
8.
83. Money that a person pays to an insurance company for a policy is called a
a)
A. debt.
b)
B. premium.
c)
C. deductible.
d)
D. liability.
9.
84. Before a person can receive money to cover the damage from a car accident, he must
a)
A. file a claim with his insurance company.
b)
B. increase his insurance coverage.
c)
C. have a witness who will testify for him.
d)
D. notify the lender who gave him a car loan.
10.
85. What is the key word for insurance companies when establishing the cost for a policy?
a)
A. Diversify.
b)
B. Deductible.
c)
C. Risk.
d)
D. Credit.
11.
86. Two types of life insurance policies are
a)
A. general and fixed-rate.
b)
B. valuable and indemnified.
c)
C. term and whole life (permanent).
d)
D. annual and tax exempt.
12.
87. When shopping for life insurance, the best strategy is to
a)
A. do what the insurance salesperson recommends, since he is an expert.
b)
B. buy coverage at work if possible.
c)
C. figure out how much is needed, then get prices from different companies.
d)
D. buy insurance coverage after age 40 so the risk will be lower.
13.
88. The purpose of life insurance is to
a)
A. pay a person’s outstanding credit card bills.
b)
B. provide investment income to pay expenses during retirement.
c)
C. help meet the financial needs of dependents upon a person’s death.
d)
D. protect against financial loss during a person’s lifetime.
14.
89. Which of the following financial products has the highest risk?
a)
A. Checking accounts.
b)
B. Certificates of deposit (CDs).
c)
C. Stocks.
d)
D. Savings accounts.
15.
90. One reason investors purchase stock is
a)
A. increase wealth.
b)
B. borrow money.
c)
C. earn interest.
d)
D. balance a budget.
16.
91. Before a person begins investing, he should have
a)
A. taken more than one business course.
b)
B. a meeting with a licensed financial planner/advisor.
c)
C. a minimum of $5,000 to invest.
d)
D. location where government officials meet.
17.
92. The New York Stock Exchange (NYSE) can be described as a
a)
A. marketplace where stocks are bought and sold.
b)
B. market for trading bonds.
c)
C. place to barter goods and services.
d)
D. location where government officials meet.
18.
93. A person wants to invest in a low-risk investment product. Which of the following would be the best investment for her?
a)
A. US Treasury bond.
b)
B. Mutual fund.
c)
C. Common stock.
d)
D. Speculative stock.
19.
94. The stock price of a corporation is most likely to increase when the corporation announces a
a)
A. decrease in the expected profit for this year.
b)
B. budget deficit.
c)
C. new product being released for sale.
d)
D. serious problem with its product.
20.
95. A method of reducing investment risk is known as
a)
A. speculation.
b)
B. diversification.
c)
C. consolidation.
d)
D. negotiation.
21.
96. Profit from the sale of stocks, bonds, or real estate is called
a)
A. equity capital.
b)
B. gift income.
c)
C. capital gains.
d)
D. tax-free income.
22.
97. A company that sells shares of ownership through a stock exchange to investors is a
a)
A. sole proprietorship.
b)
B. public corporation.
c)
C. securities exchange.
d)
D. private corporation.
23.
98. One of the main reasons for buying a stock mutual fund is that it is
a)
A. safe.
b)
B. managed by a professional.
c)
C. guaranteed to provide income.
d)
D. backed by the government.
24.
99. Investments with greater potential returns generally have higher
a)
A. risk.
b)
B. fees.
c)
C. liquidity.
d)
D. deductibles.
25.
100. A. When a person buys a company’s bond, he
a)
A. owns a part of the company.
b)
B. has lent money to the company.
c)
C. is liable for the company’s debts.
d)
D. can vote as a shareholder.
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