Font size
WorksheetsFinancial Literacy Certification - Practice Questions
Total questions: 25
Worksheet time: 13mins
All of the following make up the big three credit reporting agencies EXCEPT:
Equifax
TransUnion
Experian
Federal Reserve
It's important to reconcile your checking account so you can make sure neither you or the bank have made mistakes. It also guarantees that you know exactly how much money you have in your checking account.
True
False
Which of the following institutions give loans? Select all that apply.
Pawn Shop
Credit Union
Payday Lender
Bank
What is a cashier's check?
A check you write to the bank
A check guaranteed by the bank that prints the check
A check you receive from your friend out of their checkbook
What is liquidity?
Refers to the state of water
Money invested as a down payment
How quickly you can convert an asset to cash
Which savings instrument is most liquid?
A savings account
A certificate of deposit
A savings bond
Which of the following will charge the highest interest rate on a loan?
Payday Lenders
Credit Unions
Banks
What is a credit union?
A place where people who have bad credit go for a loan. They only require that you bring them the title to your car.
A non-profit institution that is owned by its members and often provides higher dividends and lower interest rates on loans
The exact same thing as a bank, just with a different name
True or False: If you want to have the most money possible for retirement, it is better to start saving when you're about fifteen years away from retirement, rather than when you're younger.
True
False
What is a credit card cash advance?
Paying off your credit card bill with cash from your credit card
Getting cash from your credit card (such as taking at withdrawal from it at the ATM) and paying a higher fee
Using your credit card to make a purchase
What is compound interest?
When you earn interest on your money and keep it in the bank instead of withdrawing your money
Interest that is earned on an account and then withdrawn by the account owner.
Interest that is earned on the principal only
Interest that is earned on the principal plus interest already earned
Which earns you more money over time?
No interest
Simple interest
Compound interest
If you only make the minimum payment on your credit card each month, ________ .
You are not charged interest
You will pay off the amount you owe quickly
You will end up paying a lot of money in interest and it will take a long time to pay off your balance
What is a deductible?
You monthly insurance payment
The portion of a loss that the insured is responsible for
The official request to an insurance company to pay for a loss
The largest market for stocks/securities in the U.S. is the ____.
NASDAQ
New York Stock Exchange
Dow Jones
S & P 500
Why do we need FDIC (Federal Deposit Insurance Corporation) insurance on our bank accounts?
In case the bank catches on fire
We don't
To protect the money we have in the bank in case the bank goes out of business (Up to $250,000)
What are pensions and 401Ks?
Insurance
Taxes
Retirement
What type of investment has the highest risk?
Bonds
Savings accounts
Stocks
Compound interest allows principal to grow at a ____ rate than simple interest.
Slower
Equal
Faster
Who regulates the stock market?
FDIC
NCUA
SEC
IRA
True or False: In general, the higher the deductible your insurance has, the higher the cost of your policy.
True
False
Which type of lender will typically offer the best interest rate?
Pawn Shop
Bank
Credit Union
Tax Preparer
What is net worth?
Liabilities (what you owe)
Assets minus Liabilities
Assets (what you own)
What is a recession?
A period of time in which the economy goes up
A period of time in which the economy goes down
A period of prosperity
A recent high school graduate was denied a $5,000 used car loan. The graduate may have a better chance of being approved for a loan by:
applying for a loan from the Federal Deposit Insurance Corporation (FDIC)
having a family member with a good credit score cosign for the loan
applying for a loan from the Securities and Exchange Commission (SEC)
requesting a larger loan than is actually needed
