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Personal Finance Final Exam 2020 Practice

Total questions: 85

Worksheet time: 43mins

Name
Class
Date
1.
the work a person does
a)
labor
b)
income
c)
salary
d)
resources
2.
money earned
a)
salary
b)
income
c)
purchase
d)
spend
3.
a person's knowledge and work skills
a)
credit
b)
resources
c)
human capital
d)
savings
4.
the amount of money a person can earn by being self-employed or by doing a job for another person or business
a)
salary
b)
scarce
c)
interest
d)
lend
5.
things that are produced and used
a)
interest
b)
credit
c)
lend
d)
resources
6.
to give money to someone else in exchange for something
a)
interest
b)
lend
c)
spend
d)
borrow
7.
another person gives you money that you will then need to pay back
a)
borrow
b)
purchase
c)
scarce
d)
labor
8.
to obtain by paying money for an item or a service
a)
income
b)
purchase
c)
saving
d)
salary
9.
to let someone else use your money and they will need to pay you back
a)
human capital
b)
borrow
c)
lend
d)
interest
10.
paying for something with money that is borrowed and must be paid back, usually with interest
a)
credit
b)
income
c)
resources
d)
salary
11.
the money paid by the borrower to the lender for the use of the lender's money
a)
interest
b)
savings plan
c)
scarce
d)
purchase
12.
a plan that helps you save money regularly, so you can reach you goals
a)
credit
b)
savings plan
c)
borrow
d)
credit
13.
not having enough resources or product
a)
lend
b)
borrow
c)
purchase
d)
scarce
14.
to give your money to a charity or worthy cause
a)
loan
b)
donate
c)
tax
d)
spending goal
15.

A period of temporary economic decline during which trade and industrial activity are reduced; generally identified by a fall in gross domestic product (GDP)

a)

recession

b)

failure

c)

crash

16.

A person or business that offers loans at extremely high interest rates

a)

entrepreneur

b)

loan shark

c)

creditor

17.

All of the decisions and activities of an individual or family regarding their money, including spending, saving, budgeting, etc.

a)

Personal finance

b)

Economy

18.

A person or organization that uses a product or service

a)

consumer

b)

borrower

19.

A fee paid by a borrower to the lender for the use of borrowed money.

a)

bills

b)

interest

20.

A debt evidenced by a "note," which specifies the principal amount, interest rate and date of repayment

a)

bank fee

b)

loan

21.

The knowledge and skill set necessary to be an informed consumer and manage finances effectively

a)

financial literacy

b)

budgeting

22.

An obligation of repayment owed by one party to a second party

a)

debt

b)

ownership

23.

Money earned

a)

spend

b)

income

c)

purchase

24.
A card that borrows money but it has to be paid back
a)
Debit Card 
b)
Credit Card 
c)
Baseball Card 
d)
Pokemon Card 
25.
A card that uses money directly from your bank account
a)
Debit Card 
b)
Credit Card 
c)
Pokemon Card 
d)
Baseball Card 
26.
An agreement between a borrower and a lender, where the borrower agrees to repay money with interest over time.
a)
Loan 
b)
Interest 
c)
Income 
d)
Deposit  
27.
A mortgage is used for ...
a)
Buying a new machine
b)
Buying a new vehicle
c)
Buying land or premises
d)
Paying staff wages
28.
money that you make from your job
a)
interest
b)
occupation
c)
wage
d)
income
29.
hourly rate that you get paid
a)
wage
b)
income
c)
salary
d)
register
30.
yearly amount that you get paid
a)
interest
b)
wage
c)
salary
d)
saving
31.
If you borrow money from a bank, you have to...
a)
pay the amount you borrow back
b)
pay interest back
c)
have a time limit to use it
d)
all options are correct.
32.
What is the difference between needs and wants?
a)
needs=other things
wants=survival
b)
needs=survival 
wants=other things
33.
Disposable income is income that people spend on things they don’t really need. 
a)
True
b)
False
34.

Complete record of your borrowing and repayment performance.

a)

Personal info

b)

Personal history

c)

Credit history

d)

Credit info

35.
A standard tool that calculates whether a borrower will have  difficulty meeting his or her loan repayment obligation is called:
a)
debt-to-income ratio
b)
Credit
c)
Borrower
d)
Backward planning
36.
The cost of borrowed money, usually expressed as a percentage.
a)
interest
b)
savings plan
c)
scarce
d)
purchase
37.
401(k), IRA, and Roth IRA are all examples of a __________ account.
a)
Retirement
b)
College Savings
c)
Low Interest
d)
Stock
38.

What is a credit score?

a)

a three-digit score that tells lenders how much money you make each year.

b)

A five-digit numerical rating that reflects how likely you are to repay your debt.

c)

A three-digit numerical rating that reflects how likely you are to repay your debt.

d)

A credit score is a five-digit numerical rating that reflects how likely you are to fail at paying your debts

39.

What is a budget?

a)

A plan for how money will not be used

b)

A plan for how money will be used

c)

The amount you spend

d)

The amount you save

40.

What is income?

a)

The amount you spend

b)

The amount you don't save

c)

Money taken in

41.
Edward wants to develop a positive credit history.  How should he do this?
a)
maintain reasonable amounts of available credit
b)
Open credit accounts in his parents' names
c)
Have one type of credit account
d)
Pay cash for the majority of purchases
42.
Khalaja is 18 years-old and has applied for credit for the first time.  Her credit application was declined because she has no credit history. What would you recommend Khalaja to do to begin to build a positive credit history?
a)
Khalaja should re-apply for the same credit but include a letter of recommendation from someone who knows her well and can vouch for her character
b)
Khalaja should apply for a different type of credit .  Since she was applying for a bank loan, she should apply for a credit card.
c)
Khalaja should obtain a secured credit card.
d)
Khalaja should acquire several credit cards to establish that she can manage them responsibly.
43.
Which is NOT a way to establish credit?
a)
Creating an account with a bank
b)
Obtaining a credit card
c)
Getting married, having a few kids, buying some stuff, retiring to Florida, and dying.
d)
Having a parent co-sign a card
44.

Collateral is:

a)

Something of value that secures a loan to protect the lender

b)

Department store charge cards.

c)

open-ended Credit

45.

What are the benefits of buying a house?

a)

you do not pay utilities

b)

no upkeep of the property

c)

it is a good investment

d)

no commitment

46.

With insurance, a higher deductible means a

a)

lower premium.

b)

higher premium.

c)

free healthcare.

d)

unlimited liability.

47.
In Terms of credit, what does APR stand for?   
a)
Annual Penalty Rate
b)
Annual Payoff Rate
c)
Annual Payment Rate
d)
Annual Percentage Rate
48.

Which is an asset?

a)

Mortgage

b)

Balance on a credit card or loan

c)

Boat loan

d)

Your House

e)

Your car

49.
The advantage of a 30 year mortgage over a 15 year mortgage is that you pay less over the life of a loan
a)
True
b)
False 
c)
Maybe
50.
Interest is:  
a)
The cost of borrowing money 
b)
A good thing to have to pay
c)
The amount of money that you borrow to buy something 
d)
 A word that we used in class but has no real meaning 
51.

Co-signing a loan means you are enabling a person who is not able to get a loan on their own to get a loan.

a)

True

b)

False

c)

True and it is a bad idea for you and the other person

d)

False and is a good idea for you and the other person

52.
Opportunity Cost is:
a)
Always an easy decision
b)
Something that you can see the effects of immediately
c)
Never has to do with money
d)
A trade off you make
53.

Which type of financial institution is owned by its members?

a)

Commercial Bank

b)

Savings Bank

c)

Credit Union

d)

Mutual Savings Bank

54.

In financial terms a "Want" is

a)

Something needed for survival

b)

Clothes, place to live, food

c)

Something you can live without

d)

A nice thing to have

e)

None of the above

55.

In financial terms a "Need" is

a)

Something needed for survival

b)

Clothes, place to live, food

c)

Something you can live without

d)

A nice thing to have

e)

None of the above

56.

A budget is

a)

A measure of money in and out of your finances

b)

A plan on how to spend money for a period of time

c)

A measure of how much money you spend

d)

A trend in spending from one year to another

57.

Principle is:

a)

The cost of borrowing money

b)

A good thing to have to pay

c)

The amount of money that you borrow to buy something

d)

A word that we used in class but has no real meaning

58.

When looking at a used car purchase you will likely get a warranty of

a)

1 year

b)

90 Days

c)

30 days

d)

5 years

59.

Money coming in to your account is

a)

Really nice

b)

Not happening often enough

c)

Payment/Debit

d)

Deposit/Credit

60.

Money going out of your account is

a)

Not what you want

b)

Happens too often

c)

Payment/Debit

d)

Deposit/Credit

61.

Money going out of your account is

a)

Not what you want

b)

Happens too often

c)

Payment/Debit

d)

Deposit/Credit

62.
The law of demand states that if the price of CD’s rise, consumers will
a)
Buy more CDs
b)
Buy fewer CDs
c)
Quantity demanded will not change
63.
The law of supply states that if the price of CD’s rise, suppliers will
a)
Supply more CDs
b)
Supply fewer CDs
c)
Quantity supplied will not change
64.
Which of the following will cause an increase in demand for snowboards?
a)
More costly production methods 
b)
A decrease in the price of lift tickets at resorts in Colorado 
c)
A decrease in consumer income   
d)
A decrease in the population 
65.
Due to a disappointing economy, Americans are cutting back on the family vacation road trips. What happens to the market for gasoline?
a)
Demand for gasoline will decrease 
b)
Demand for gasoline will increase
c)
Demand for gasoline will stay the same
66.
What is opportunity cost?
a)
your choice
b)
what you give up to make a choice
67.
What is scarcity? 
a)
Having too many resources 
b)
Not  having enough resources 
68.
A popular bakery has only a few ingredients left to make their products.  They could bake muffins or cookies, but they can’t make both.  The bakers decide to make cookies for their customers.  What is the opportunity cost of their decision?
a)
muffins 
b)
cookies 
69.
The Welch family has saved some money.  They can spend it on a vacation to the Grand Canyon or build a swimming pool in their back yard.  They decide to spend the money on a swimming pool.  What is the opportunity cost of their decision?
a)
vacation 
b)
swimming pool 
70.
What is depreciation?
a)
Cars lose value once you drive them.
b)
Cars lose space once you drive them.
c)
Cars gain value once you drive them.
d)
Cars lose mileage once you drive them.
71.
Which of the following are things to look for when shopping for a new or used car?
a)
the mileage
b)
damage to the exeterior of the car
c)
the price of the car
d)
all of these
72.
The loss of an asset's value over time is called
a)
depreciation
b)
equalization
c)
amoritization
d)
normalization
73.
The cost of owning a car includes
a)
insurance
b)
repairs
c)
gas
d)
all of these
74.
A manufacturer's warranty on a car covers
a)
specific repairs for as long as you own the car
b)
all the maintenance costs for a specific number of miles
c)
specific repairs for a specific amount of time or number of miles
d)
collision repairs but no other repairs
75.
The _______________ is the cash you give to the dealer to lower the principal amount of the car.
a)
warranty expense
b)
interest amount
c)
down payment
d)
trade-in
76.
A long-term rental of a car that allows a specific period of time and mileage is called
a)
purchasing a car
b)
borrowing a car
c)
leasing a car
d)
none of the above
77.
What should you do before you sign a contract to buy a car?
a)
Make sure the car has the features that you want.  
b)
Ask questions if you are unsure about what the car has.
c)
Check the insurance rate
d)
All of the above.  
78.
What are Payday Loans?
a)
loans to help you afford a house or property
b)
loans to get you a car
c)
loan to help you if you run out of money before your monthly check
79.

Which of Monique's actions is a classical financial pitfall?

a)

She installed antivirus and spyware protection on her laptop

b)

She used a secured network when working at the coffee shop

c)

She gave her info to someone who claimed to be a bank teller

d)

She rented her textbook via amazon.com

80.

How do people get trapped in the payday loan cycle?

a)

Customers usually only need to borrow money once

b)

Lenders typically give loans out with a low APR

c)

Customers may visit several payday loan lenders to get $

d)

Lenders typically give out long-term loans

81.

What strategies do most predatory lenders use to attract customers? (hint: choose 2 correct answers)

a)

Short-term loans

b)

High interest rates

c)

Quick access to cash

d)

Credit score is not taken into consideration

82.

What is a disadvantage of a rent-to-own transaction?

a)

A credit check is not always necessary

b)

There are usually no down payments needed

c)

The consumer ends up paying more than the value of the item

d)

The item may be delivered to your house or apartment

83.

When lending money to friends and/or family...(hint: choose 3 correct answers)

a)

Say "yes" 90% of the time to their requests and "no" 10%

b)

Be firm and clear in your communication

c)

Figure out other ways you can help, such as a yard sale

d)

Get everything in writing

84.

What is a risk of co-signing a loan for a family or friend?

a)

You are likely to get a higher APR

b)

You have a shorter loan term

c)

You become the primary borrower on the loan

d)

You may be held responsible for the debt

85.

Filing for bankruptcy is a big deal! Which is a consequence of filing for bankruptcy?

a)

You'll have to close any exiting accounts at banks

b)

Credit lenders will reach out to you with new offers

c)

Your interest rates will decrease

d)

You won't be able to open new lines of credit

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