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WorksheetsPersonal Finance 1.01 - 2.05 Review
Total questions: 45
Worksheet time: 23mins
Name
Class
Date
1.
A key difference between commercial banks and credit unions is that:
a)
Commercial banks are ‘for‐profit’ and credit unions are ‘not‐for‐profit’
b)
Commercial banks typically pay higher interest rates than credit unions
c)
Credit unions are more commonly located in rural area while commercial banks are more commonly located in urban areas
d)
Commercial banks offer more services, such debit cards, and online banking, than creditunions.
2.
Since Taylor was a young child she has kept her savings in a piggy bank. She likes this method ofsaving because she can have immediate access to the money if she needs it. Recently, in a class atschool, discussion focused on why depository institutions are safer than her piggy bank. Some students’ comments were based on fact while others were based on myths. Which aspect of security at a depository institution is NOT TRUE?
a)
Depository institutions have insurance protection for up to $250,000 per depositor peraccount type so if something happened to the money in the bank, you would get it back aslong as the deposited amount was no more than the insurance limit.
b)
All money stored at a depository institution is kept safe at all times by numerous security measures.
c)
Information about depositors and their accounts is kept in secure data storage.
d)
Depository institutions have insurance protection. Depositors can have multiple accountsinsured at the same depository institution as long as each account has no more than$100,000.
3.
Sanjay is concerned about the safety of the money in his savings account. Which type of depository institution should he choose?
a)
A commercial bank, since his deposits would be insured by the Federal Deposit Insurance Corporation (FDIC)
b)
A credit union, since his deposits would be insured by the National Credit Union Association(NCUA)
c)
He could safely choose either a commercial bank or a credit union, as long as his savingsaccount balance meets the insurance requirements.
d)
Neither a commercial bank nor a credit union. Money is most safely kept at home in a personal safe or vault.
4.
Ariel is saving money to purchase a new computer before she leaves for college in two years. She wants to open a special account at a depository institution to keep her saved money safe. She has asked you for advice on which type of account would be best for her. What would be the best advice for Ariel?
a)
Check several depository institutions and choose one with a free, no‐interest checkingaccount. That way, when Ariel has saved enough for her computer she can simply write a check to pay for it.
b)
Shop around for the depository institution with the highest interest rates for their savings accounts. She would be able to make regular savings deposits and earn interest while she is saving up for the computer.
c)
Look for a Credit Union that offers share draft accounts. These secure accounts are designed especially for saving for long‐term financial goals.
d)
Shop around for a depository institution that offers safe deposit boxes. These accounts offer extra security for deposits and can be set up to allow her to withdraw her money when she needs it.
5.
Savings tools offered by depository institutions may earn interest. Which of the following statements is NOT TRUE about interest?
a)
Interest is the price paid for using someone else’s money.
b)
When earning interest, look for low rates.
c)
When paying interest, look for low rates.
d)
The amount of interest earned or paid is determined by the interest rate.
6.
Samantha wants to be able to use funds in her checking account but finds going to the bank to withdraw cash to be inconvenient. She would like a more effective way to access her checking account funds. What would you suggest she do?
a)
Apply for mobile banking. That way she can access her money with her smartphone to pay for the things she needs. The amount she spends would automatically be deducted from her savings account.
b)
Apply for a debit card. That way she can use the card instead of cash to purchase the things she needs and the amount spent is immediately deducted from her account.
c)
Apply for a credit card. That way she can use the card to purchase the things she needs and pay for it when the credit card statement comes from her checking account.
d)
Request a cashier’s check from her depository institution. That way she can spend money from her checking account without risk of an overdraft fee.
7.
Common fees that may be charged by a depository institution include all EXCEPT:
a)
overdraft fee.
b)
late fee.
c)
ATM fee.
d)
minimum balance fee.
8.
David made a mistake in his checking account record keeping and spent $10 more than he had deposited in his account. As a result, he can expect to be charged a(n):
a)
ATM fee.
b)
contact fee.
c)
safe deposit fee.
d)
overdraft fee.
9.
Which statement is TRUE about Payroll Taxes?
a)
Payroll taxes are paid are paid on both earned and unearned income.
b)
Payroll taxes fund different operations and programs of the federal government.
c)
Payroll taxes fund the Social Security and Medicare programs.
d)
The amount of tax paid depends on many different factors but increases as income increases.
10.
As Mariah was looking over her sales receipt for the shirt she bought at a retail store, she discovered that she was charged 6% more than the price tag showed for the item. What is this extra 6% charge most likely to be?
a)
An excise tax on the shirt she purchased.
b)
Property tax on the shirt she purchased.
c)
Income tax on the shirt she purchased.
d)
Sales tax on the shirt she purchased.
11.
Who is Medicare designed to help?
a)
Low income families
b)
Single parents
c)
Senior citizens
d)
Children of unemployed parents
12.
Dane is researching the topic of property taxes for a presentation he is doing in his PersonalFinance class. He has come across the following statements he is considering adding to his presentation. Which should he EXCLUDE from his presentation because it is not correct?
a)
Property taxes are assessed at the same rate for all types of property, including homes,land and building, regardless of location or whether they are used for business or personal use.
b)
Property taxes are usually charged by state and local governments to pay for local schools and other services and expenses incurred by these governments.
c)
Property taxes are commonly paid on automobiles. This tax usually paid once per year when the automobile is licensed.
d)
Property tax on homes, land and buildings are usually only paid once or twice each year.
13.
Which statement is NOT TRUE about property taxes?
a)
Property tax is often charged by states or local governments to pay for local schools.
b)
The property tax rate is set by the federal government to be equal in every state.
c)
The fee paid to license a vehicle is an example of property tax.
d)
Property taxes are most often paid only once or twice each year.
14.
Taxes that are charged on consumption items such as gasoline, hotel rooms, and airline tickets are called _____________ taxes.
a)
sales
b)
excise
c)
federal use
d)
property
15.
Austin has just received his first paycheck. He worked 22 hours at his new job and is being paid$8.00 per hour. He calculated that his paycheck should be $176. His paycheck amount is almost 1/3 less than he expected. What is the most likely reason that Austin’s pay is less than he expected it to be?
a)
Austin calculated the hours he worked without deducting the hours he spent doing on‐the job training.
b)
Austin neglected to deduct the excise tax paid on the uniforms he purchased to wear at his job.
c)
Austin neglected to deduct the amount required to pay income and payroll taxes.
d)
Austin’s employer made a mistake calculating the number of hours Austin worked during his first pay period.
16.
Brett is creating a Statement of Financial Position and needs to list his assets. Which of the following should he NOT list as an asset?
a)
Money in his checking account
b)
Money in the paycheck he will receive next week
c)
His hockey equipment
d)
The market value of his car
17.
To calculate her net worth Jordyn should use the following formula:
a)
Assets – liabilities = net worth
b)
Assets x liabilities = net worth
c)
Assets + liabilities = net worth
d)
Assets / liabilities = net worth
18.
Maggie earns $62,000 per year and has a net worth of $20,000. Samantha earns $96,000 and has a net worth of $15,000. Who is wealthier?
a)
Maggie, because her income minus her net worth is a smaller amount than Samantha’s.
b)
Samantha, because her income minus her net worth is a larger amount than Maggie’s.
c)
Maggie, because her net worth is higher than Samantha’s.
d)
Samantha, because her annual income is higher than Maggie’s.
19.
Jonah is writing down his liabilities to complete his Statement of Financial Position. The item he should include would be:
a)
the market value of his car.
b)
the value of his retirement account.
c)
the combined total of his savings and checking accounts.
d)
the balance on his credit card.
20.
To increase his net worth, Jackson could:
a)
increase his liabilities.
b)
decrease his assets.
c)
increase his market value.
d)
increase his assets.
21.
Erin and her mother are putting together an Income and Expense Statement for Erin to use as she applies for a college scholarship. Which income source does she NOT need to include for this statement?
a)
Interest earned on her savings account.
b)
Money she received from her grandparents for her birthday.
c)
Social Security income her mother is receiving for her since her father died of cancer last year.
d)
Taxes she paid based on her income last year.
22.
Which of the following would most likely be considered a contractual expense?
a)
Cell phone
b)
Food
c)
Entertainment
d)
Clothing
23.
Andy is developing an Income and Expense Statement. He has gathered all his receipts, bank statements, paycheck stubs, and spending records. He needs to categorize them into income and expenses. He is unsure which of the following items should be recorded as expenses. Which should be recorded as expenses?
a)
Taxes deducted from his paycheck, money saved from his paycheck for emergencies, and his car insurance
b)
Money saved from his paycheck for emergencies, interest paid on his car loan, his tax refund from filing last year’s tax return
c)
The scholarship he receives for studying Chinese at the local community college, his car insurance payment, and stock dividends he received from his grandmother
d)
Clothing he purchased for a job interview, tuition for a class he is taking at the local community college, and interest from his savings account
24.
Amanda and Marcus just finished their Income and Expense Statement for last month. They discovered that they have a net gain. What does this mean and what should they do?
a)
Amanda and Marcus are spending more money than they are earning. They need find away to balance their income and expenses by spending less on non‐contractual expenses.
b)
Amanda and Marcus are earning more money than they are spending. They could place additional money in savings and/or spend it on other expenses.
c)
Amanda and Marcus are spending more money than they are earning. One of them should consider getting a second job for a time to help boost their income.
d)
Amanda and Marcus are earning more money than they are spending. They should increase spending for non‐contractual items to bring their income into balance with the expenses.
25.
If expenses were to exceed income on a spending plan, what would be a financially smart solution?
a)
Decrease expenses
b)
Use a credit card more often
c)
Earn less income
d)
Increase purchases
26.
Diana and Aaron have decided to develop a spending plan to help them gain control over their finances. Which of the following statements is NOT TRUE about spending plans?
a)
Spending plans are used to record planned income.
b)
Spending plans are used to record planned expenses.
c)
A spending plan includes items NOT usually included when creating a budget.
d)
When creating a pending plan, it is recommended that you examine your trade‐offs and opportunity costs.
27.
When is your spending plan complete?
a)
When you have allocated all your income into categories for the month.
b)
When you have all of your current income and expenses recorded.
c)
Spending plans are always under revision so they are never complete.
d)
Spending plans are complete each December 31st as one year ends and another year begins.
28.
Chase has decided to work with a spending plan so he can build up an emergency fund for when he is in college. He learned in class that he could probably reduce his spending the most by looking at his non‐contractual expenses. Which of his expenses best fit that category?
a)
Cell phone bill, gasoline, and car payment
b)
Internet bill, entertainment, and clothing
c)
Motorcycle payment, food, and cell phone bill
d)
Gasoline, food, and entertainment
29.
Michael wants to develop a spending plan for himself to use during his final year of high school.What will he need to do as his FIRST step?
a)
Decide what income and spending categories would reflect his values, needs, and wants.
b)
Decide how much money he can spend for each of the bills he pays each month.
c)
Track his current income and expenses. If he has already created an Income and Expense Statement then he has completed this step.
d)
Develop a control system that will work with his life style.
30.
Which of the following tell you what your financial position is today?
a)
Statement of Financial Position
b)
Income and Expense Statement
c)
Spending Plan
d)
All of These
31.
Which of the following statements about our interactions with money is NOT considered to be true?
a)
You are responsible for your present self and future self
b)
Your present self impacts your future self
c)
You are better off in a community than by yourself
d)
Investment increases risk and reduces your ability to cope with risk and uncertainty.
32.
Carter wants to participate in an activity that will improve his well‐being. Which of the following activities would contribute the most to his well‐being?
a)
An activity his friends like to participate in.
b)
An activity that doesn’t cost much money.
c)
An activity that his teacher suggested to him.
d)
An activity that makes him lose track of time.
33.
Jenna wants to improve her financial well‐being. Which of the following would contribute the most to her financial well‐being?
a)
Take a personal finance class to learn how to manage her money.
b)
Pay her grandma back the money she borrowed to take a school trip last year.
c)
Talk to her friends about how to manage her money better.
d)
Open another checking account to help her organize her money.
34.
Jacob is wondering how he can improve his intellectual well‐being. Which of the following would contribute the most to his intellectual well‐being?
a)
Go to the gym three times per week.
b)
Challenge himself by taking on a new project at work.
c)
Join a local service organization.
d)
Take a vacation from work.
35.
Sylas is studying financial planning in one of his classes. His teacher has assigned him to create a timeline of his financial future. Where should the end of his financial planning timeline be set?
a)
When his financial goals have been established
b)
When he money management plan has established high well‐being.
c)
When he is 70‐years‐old.
d)
Never – it is an ongoing process.
36.
Erica wants her class project to reflect her values. Which items would be best to include?
a)
Things that she intends to acquire, do, reach or accomplish in the near or distant future
b)
Things that are necessary or essential for life and survival
c)
Things that reflect her fundamental beliefs about what is worthwhile and important to her
d)
Things that are unnecessary but desired which increase the quality of her life
37.
Which of the following is likely to have the least influence on an individual’s values?
a)
Media
b)
Family
c)
Religious affiliations
d)
Grade point average
38.
Which of the following factors is not influenced by values?
a)
Everything is influenced by values
b)
An individual's daily decisions
c)
An individual's long-term decisions
d)
An individual's financial decisions
39.
Megan’s mother suggested that she was experiencing the consequences of her trade off regarding a decision she made to purchase a dress for prom. Which situation does Megan most likely find herself in for her mother to have made this comment?
a)
Megan had shopped at several stores when she found the prom dress of her dreams and purchased it. She used the money she had saved for the prom dress PLUS most of the money she had saved for replacing the tires on her car. Now the tires need replacing and Megan is short on the cash needed to do the job.
b)
Megan had shopped at several stores when she found the prom dress of her dreams. She checked online and found a coupon that enabled her to save 30% when she returned to the store to purchase the dress.
c)
Megan had shopped in several stores and found six prom dresses she liked a lot. She brought 2 friends shopping with her to tell her which one looked best on her. After much deliberation, she chose the dress that was the least expensive of the 3 she liked best.
d)
Megan had shopped in the store her mother recommended for her prom dress. She found two dresses she liked a lot. Megan purchased the one that was the most comfortable even though it cost $28 more than the other one.
40.
Kaylee will save her allowance of $25 per month to purchase a $150 mp3 player in six months. This is an example of what type of goal?
a)
Short-term goal
b)
Long-term goal
c)
Mid-term goal
d)
This is not an example of a goal
41.
Mark and Susan, a recently married couple with full‐time jobs, set a goal of putting $200 in savings every month to make a down payment on a home in five years. What type of goal have they set?
a)
Short-term
b)
Intermediate
c)
Long-term
d)
Unrealistic
42.
Amber’s academic adviser has asked her to set 3 academic goals for this semester. These goals are MOST LIKELY to be accomplished if:
a)
Amber discusses her goals with her parents
b)
Amber lets her friends set her goals
c)
Amber writes her goals down
d)
Amber thinks about her goals weekly
43.
One element of a financial goal is missing in the example below. Which one is it?“I will save $150 each month to go on a vacation in one year.”
a)
Time Bound
b)
Specific
c)
Attainable
d)
Measurable
44.
Whitney is shopping with her mom and they are deciding on clothing to purchase. Which scenario BEST represents the purchase of a NEED?
a)
Whitney is being inducted into the National Honor Society at her high school. Students have been directed to ‘dress nice’. Whitney has a dress she wore to a wedding last year that still fits but her mom thinks she needs a new one to celebrate this occasion.
b)
Whitney has been selected to attend a national leadership conference and has been instructed that she will need to dress ‘professionally’ for one of the tours. She plans to wear her new jeans and a t‐shirt that has the logo of the leadership conference on it. Her mother thinks she needs to purchase something more appropriate.
c)
Whitney has several pairs of jeans in her closet but found some that really fit her well at an excellent price when she and her mom were shopping. Her mom agrees that with these jeans at this price, they need to purchase a pair.
d)
Whitney will be traveling to Europe with a youth ambassador program this summer. She has been instructed to pack a rain jacket. The rain jacket she already owns does not have a hood since she always uses an umbrella in rainy situations. Her mom believes she needs to purchase a hooded rain jacket because it would be more convenient.
45.
Ian has been shopping for a different vehicle for the past several months. He needs something reliable and would really like something with a nice sound system. He and his parents have talked about how much he can afford and he plans to stay within the price guidelines he and his family have set. Ian was analyzing the opportunity cost of a trade‐off regarding which car to purchase. Which situation best represents what he might be thinking through?
a)
Ian is comparing new vehicles at two car dealerships. He was able to find nearly identical cars at nearly identical prices. One dealership is 20 miles away and the other dealership is 30 miles away.
b)
Ian has found two different cars at a local dealership that meet his needs. The first car has a better sound system than the other. The second car has 20,000 fewer miles on it.
c)
Ian has been shopping for a vehicle online. He finds something that would meet his needs being sold by an individual near him. He would be able to purchase this car for less than he would have paid for a comparable vehicle at a car dealership.
d)
Ian’s older brother is trading vehicles and offers to sell Ian his used vehicle. This vehicle would meet Ian’s needs and he knew the service history of the vehicle was excellent.
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