WorksheetsW!SE Practice Test 4 - Difficult
Total questions: 60
Worksheet time: 3600secs
One of Andre's seldom-used credit cards has been stolen without his knowledge. When he gets his monthly statement, he realizes that someone else has been using the card and reports it stolen. The maximum amount of the unauthorized purchases he is liable for is:
zero
$50
the total amount
$25
Why is term life insurance usually the least expensive type of life insurance?
the policy only pays a death benefit
the policy builds a cash value
the policy provides coverage for a lifetime
the policy is available to all consumers
Joan wants to open a checking account and wonders if checking accounts pay interest. How would you answer her question?
all checking accounts pay interest
some types of checking accounts pay interest
checking accounts never pay interest
checking accounts pay interest if the account balance does not fall below $300
A factor that is likely to affect the market price of a stock is:
the age of the corporation
corporate profits
the number of corporate employees
wages
When Lucy was born, her grandparents gave her a Series EE savings bond that will be worth $1,000 at maturity. Her grandparents paid:
$1,000 for the bond
$500 for the bond
$750 for the bonding
these bonds are gifts for long term depositors
Which statement does NOT accurately describe a characteristic of cash value for whole life insurance?
cash value grows gradually overtime
if the policy is cancelled, you may be entitled to some or all of the accrued cash value
policy that accumulates cash value is less expensive than a policy that does not accumulate cash value
when an insured person dies, the beneficiary will receive the death benefit, but the insurance company keeps the cash value
Which financial product can you buy for $25, is safe, and will be worth $50 at a future date?
Series EE savings bond
certificate of deposit
50 shares of ABC Co. stock
ABC Co. bond
Patty is selling her car through a newspaper ad. When she finds a buyer, she wants a form of payment which is guaranteed to be good. Which form of payment should she avoid?
cashiers check
certified check
credit card
check
Predatory lending practices do not include which of the following:
a creditor knocking on your door and agreeing to refinance your mortgage without looking at your credit history
an individual agreeing to a high cost loan with excessive fees
a lender who expects a loan to be refinanced when you are unable to make payments
a loan that you can afford with an interest rate that is the same as the interest rate being charged by at least three other financial institutions
The federal agency that regulates the securities industry is the:
Federal Trade Commission
Department of Commerce
Securities and Exchange Commission
Federal Reserve
The type of credit card issued by an oil company, bank, or department store is:
an installment card
a revolving charge card
a debit card
a cash card
If you have been denied credit, a job, a license, an insurance policy, or a loan based on your credit report, you are entitled to receive a free copy of that credit report within how many days of denial?
30
60
90
there is no time limit
Ellen, Barbara, and Paul all charged $1,000 on their credit cards last year. Who paid the most in finance charges?
Ellen, who generally pays off her credit card in full but occasionally will pay the minimum when she is short of cash
Barbara, who always pays off her credit card bill in full after she receives it
Paul, who only pays the minimum amount each month
They all paid about the same since the method of payment per month does not influence the finance charge
Troy has $50 a month transferred electronically from his checking account to his savings account. This is an example of:
an installment payment
a savings plan
an ATM transaction
a debit card transaction
Insurance is frequently described as a method of "sharing the risk" because the:
risk of loss is shared with the insurance company sales person
insured shares the risk of loss with all the other policy holders
insured can share the risk by spreading the cost over a number of years
risk of loss is shared with the government
When a corporation or government agency borrows money from an investor and pays interest and principal to that same investor, it is a:
common stock
savings account
bond
certificate of deposit
Which of the following investment products is guaranteed by the federal government?
common stock
corporate bonds
U.S. treasury notes
preferred stock
Matthew and Alicia just had a baby. They received money as baby gifts and want to put it away for the baby's college tuition. Which of the following has the lowest potential growth rate over the next 18 years?
savings account
certificate of deposit
U.S. government savings bonds
common stocks
Erika and Mark received an inheritance of 100,000. They plan to invest their inheritance money to buy a house in six years. Which of the following carries the greatest risk?
savings accounts
common stocks
bonds
regular checking accounts
A teenage boy has opened a checking account. He is surprised to find that though he is getting a written bank statement each month he is not getting his cancelled check returned. The teenager should be aware that the reason cancelled checks are NOT returned is to:
protect him from providing opportunities for forgery
insure that he does not receive important materials he is likely to lose
lessen the bank's need to maintain records of check transactions
save the bank money associated with returning copies of these checks
The price of the Candy Corporation stock will generally increase when there is:
positive news about corporate earnings
investor confidence is declining
investors are bullish on the health sector
interest rates are rising
A credit card finance charge is:
the sales tax
the cost of all the items purchased
the dollar amount it costs to use credit
a service fee
New coins and currency make their way into the general economy, consumers and businesses, through the distribution system of the:
treasurer of the united states
secretary of the department of treasury
federal reserve system
U.S federal mint
A cash card generally:
can be used in the same way that someone uses a check to pay bills by mail
is purchased with a specific amount of money that can be used to pay for goods or services
is the same as a credit card which means you can use it to pay the minimum on a bill
is the same as a debit card and is always linked to a specific checking account
Which of the following is your right as a shareholder of common stock?
the right to hire officers of the corporation
the right to receive dividends if paid
the right to receive discounts on products or services
the right to receive interest payments
Jennie owns Disney shares and cannot attend the annual stockholder of common stock?
vote by mail or online through proxy
assign her stock voting rights to her husband
not vote unless she is at the meeting
plan to attend the stockholders meeting next year
Shares of stock are also known as:
bonds
debts
money market funds
equities
Jami lost her debit card. She did not report it missing for 3 months. If an unauthorized person used her debit card, her maximum liability is:
$50
$500
unlimited liability
no liability because she notified the financial institution
Consumer finance companies, which are often advertised on TV, are also known as:
banks
savings and loans associations
small loan companies
purchase loan lenders
Travelers checks, often used for vacations:
are equivalent to credit cards
are free at most banks
function as cash and are easily replaced if lost
are FDIC insured
When John bought a Microsoft bond, he was:
lending money to Microsoft
borrowing money from Microsoft
buying part ownership of Microsoft
investing in a liquid instrument
Which financial product typically pays the highest rate of interest?
common stock
savings account
checking account
certificate of deposit
Troy has $50 a month transferred electronically from his checking account to his savings account. This is an example of:
an installment payment
a savings plan
an ATM transaction
a debit card transaction
Sara has invested incorporate bonds which are:
issued by banks and investment firms
loans to the issuer of the bond
returns the face value of the bond at maturity less the last interest payment
loans with ownership privileges
Most Consumer Credit Counseling Services (CCCS):
charge a fee for setting up a basic budget
charge a fee for setting up and administrating a debt repayment plan
charge a fee for educating consumers about managing their debts
do not charge a fee for any of their services
Frankie's savings account has earned a lot of interest. He wants to know if he must pay taxes on the interest earned. What would the IRS tell him?
interest earned on savings accounts is not taxable
a sales tax will be charged on the interest earned
savings account interest is taxable
if the interest is under $50, it is not taxable
The activity of the New York Stock Exchange most closely resembles:
a department store
an auction house
a bank
a dance hall
Why does a corporation issue bonds?
to raise money for expansion or other company operations
to expand ownership of the corporation
to comply with Securities and Exchange Commission requirements
to keep from being bought by another corporation
Which of the following lenders charge the highest interest rate?
bank
credit union
pawn shop
finance company
Erika and Mark received an inheritance of $100,000. They plan to invest their inheritance money to buy a house in six years. Which of the following carries the greatest risk?
savings accounts
common stocks
bonds
regular checking accounts
Mutual funds are:
an investment portfolio managed by investor
an investment that holds a wide range of different investment instruments, providing diversification
usually less risky than investing in a money market
guaranteed to increase in value
Why is term life insurance usually the least expensive type of life insurance?
the policy only pays a death benefit
the policy builds a cash value
the policy provides coverage for a lifetime
the policy is available to all consumers
Joan wants to open a checking account and wonders if checking accounts pay interest. How would you answer her question?
all checking accounts pay interest
some types of checking accounts pay interest
checking accounts never pay interest
checking accounts pay interest if the account balance does not fall below $300
The purpose of insurance is NOT to:
diversify an investment portfolio
share risk with other policy holders and the insurance company
protect assets
protect against potential losses
Generally, the higher the deductible on an insurance policy, the
greater the premium
lower the premium
more frequently the premium has to be paid
less frequently the premium has to be paid
A credit card finance charge is:
the sales tax
the cost of the items purchased
the dollar amount it costs to use credit
a service fee
Which financial product may pay a dividend?
savings account
money market account
certificate of deposit
common stock
Nora needed to make a long-distance call from a pay phone and did not have the cash. She was able to make the call using her:
credit card
identification card
cash card
traveler's check
Which of the following is your right as a shareholder of common stock?
the right to hie officers of the corporation
the right to receive dividends if paid
the right to receive discounts on products or services
the right to receive interest payments
How can individuals be prepared for losing their job or having a large medical expense?
maintain a checking account with sufficient funds
pay credit card bills on time
prepare a budget
save at least three months of income
Lucy has no insurance. The situation(s) should she consider insuring against first are:
death so her financial obligations are paid
losses resulting from an illness, accident, or disability
property losses and auto accidents
auto collision, and burglary
Dalton lost his debit card. He reported it missing within 2 days. If an unauthorized person used his debit card, his maximum liability is:
$50
$500
unlimited liability
no liability because he notified the financial institute
Debbie was behind on her stereo installment credit contract payments. As a result, the creditor seized and sold the stereo. The sale price did not cover all of the loan balance, the creditor got a court to order her employer to withhold part of her wages. This court order is called:
wage assignment
bankruptcy
garnishment
deficiency judgment
You used your credit card to buy flowers at the florist. The dollar amount of the purchase was:
deducted immediately from your checking account
added to your credit card account as a finance charge
added to your credit card bill and you pay for it at a later date
put on your credit card bill as a cash advance
The best reason for depositing money in a bank or credit union savings account instead of keeping your money "under the mattress" is that:
money deposited in savings accounts are F.D.I.C insured
most savings accounts earn a guaranteed rate of interest
most savings accounts come with a free credit card
money in a savings account can be accessed any time during the day or night
Which financial product typically pays the highest rate of interest?
common stock
savings account
checking account
certificate of deposit
The type of credit card issued by an oil company, bank, or department store is:
an installment card
a revolving charge card
a debit card
a cash card
Money orders are:
distributed by the Treasury Department
available for no fee at banks and retail stores
a purchased certificate to pay a specified amount to a specific payee
a certified check used to pay a specified amount to a specific payee
Sara has invested in corporate bonds which are:
issued by banks and investment firms
loans to the issuer of the bond
returns the face value of the bond at maturity less the last interest payment
loans with ownership privileges
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
divide the total amount of money that will be needed into 12 equal parts and invest that amount in stocks
obtain a short-term collateralized loan for the needed amount of money
plan to open a new credit card account that will be used to charge the needed amount of money
