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WorksheetsW!SE Practice Test 3
Total questions: 50
Worksheet time: 47mins
Which of the following provides an increase in assets or wealth?
volunteering at a hospital
taking out a loan
having capital gains
running in the marathon
The denominations of coins in the US are:
$0.01, $0.05, $0.10, $0.25, $0.50, and $1.00
$0.01, $0.30, $0.50, and $5.00
$0.05, $0.10, $0.50, $0.75. and $10.00
coins can be in any denomination a consumer desires
Mutual Funds are:
an investment portfolio managed by the 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
Which of the following is a disadvantage of using phone cards, debit cards, electronic transfer, and ATM cards?
consumers can make purchases without of writing a check
they expose consumers to greater likelihood of identity theft
they slow down the economy's recovery
they decrease availability of currency in the economy
The process of setting aside money and putting it to work by having it earn interest or dividends or gain value in the equities market with the idea of having additional funds to use in the future is described as:
savings and investing
making money
setting goals
diversifying
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
New coins and currency make their way into the general economy, consumers and businesses, through the distribution system of the:
treasurer of the US
Secretary of the department of treasury
federal reserve system
US federal mint
Which of the following provides an increase in assets or wealth?
volunteering at a hospital
taking out a loan
having capital gains
running in the marathon
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
The term used to describe the ease and speed with which you can convert savings or an investment to cash is:
convertibility
principal
liquidity
rate of return
Richard's auto insurance policy expired on 5/15/2002. Richard was upset with his insurance agent and decided to change insurance companies. At 10;00 a.m. on 5/16/2002, as he drove to a different agent to buy a new policy, he had an accident. Who is liable for damage to his car and his personal injuries?
the old agent
the new agent
Richard
the old agent is liable for damage to your car and the new agent for personal injuries
What is a credit score?
a number used to determine how much credit to extend to a person
a measure used to indicate a person's gross wealth
a reward system that is based on the number of credit cards a person has
a formula based solely on a person's earnings
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 bond
these bonds are gifts for long term depositors
A bank Certificate of Deposit is a:
savings instrument that requires a deposit for a period of time during which the saver can withdraw money from the plan at any time without a penalty
savings instrument that requires a deposit for a period of time during which there is a penalty for withdrawals
cash deposit in a savings account that earns interest
certificate for deposits that are issued for half the face value
Which financial product may pay a dividend?
savings account
money market account
certifictae of deposit
common stock
If you have a managed health care plan, it means that you:
usually must first meet with your primary health care physician
can go to nay doctor at any time
will be responsible for $100 of a doctor bill
can apply for an 80% reimbursement of the amount paid to the doctor
Matt's wallet, with all his credit cards, was stolen. He needs to:
notify the credit card companies after he gets his next account statements to get the 800 telephone numbers to report the stolen card
check the next account statements for unauthorized charges and, if so, file a complaint with the credit card company
nothing because retailers will not accept charges by someone who does not own the card
notify each credit card company immediately
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 by using her:
credit card
identification card
cash card
traveler's check
Which of the following is you 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 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
A savings account earns the greatest amount of money when the interest on the account is compounded
yearly
quarterly
monthly
daily
Purchases made with your debit card are usually:
deducted immediately from your checking account
deducted from your credit card balance
added to your credit card balance
put on your credit card bill as a cash advance
Jennie owes Disney shares and cannot attend the annual stockholder meeting. She can:
vote by mail or online through a 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
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 institution
Consumer finance companies, which are often advertised on TV, are also known as:
banks
savings and loan associations
small loan companies
purchase loan lenders
Which statement best describes the relationship between a person's educational level and that person's potential earning power?
education has no effect on a person's potential earning power
a person with a professional degree is likely to earn at least four times as much per year as a person who did not complete high school
attaining a higher education
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 judgement
Robyn is an investor. Which financial product makes her a shareholder in a corporation?
bonds
certificate of deposit
common stocks
bond mutual funds
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
What is the chief reason corporations issue stock?
to raise money for the corporation
to give consumers ownership in their company
to secure tax advantages
to help the economy
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 FDIC 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
Maxine has an auto loan that she has to pay. She will make monthly payments over 5 years. She has a(n):
diversified loan
secure loan
non-installment loan
installment loan
The type of credit card issued by an oil company, bank, or department store is:
an installment lcard
a revolving charge card
a debit card
a cash card
One example of a long-term retirement goal is to:
end the use of credit cards
close savings accounts
deposit at least $100,000 in a retirement account
invest in high risk securities
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
A blank endorsement on a check:
has no effect on the check
cancels the check
creates a check that can be cashed by anyone
restricts the use of the check
Jane opened her credit card bill and was surprised by the amount she owed. She cannot pay the full amount of the bill this month. The lowest dollar amount Jane is required to pay by the credit card company is the:
monthly fee payment
principal payment
minimum payment
interest payment
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
Which of the following investment products is guaranteed by the federal government?
common stock
corporate bonds
U.S. treasury notes
preferred stock
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
'The Fed" is short for:
the federal reserve system
congress
FBI
the federal deposit insurance corporation
Pat has a savings account and a car loan from a not-for-profit financial institution owned by its members. She is probably a member of what type of financial institution?
credit union
commercial bank
savings and loan association
investment club
Claire got a new credit card from American Bank and wants to cancel her USA credit card. The best method is to dispose of her USA credit card is to:
put it in the garbage; the credit company will know she's closing the account when she doesn't use her card
cut up the card and put parts in different garbage bags
cut up the card, put parts in different garbage bags, and instruct the credit card company in writing or by phone to close the account
it doesn't matter how she disposes of the credit card is she instructs the credit card company to close the account
