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WorksheetsPersonal Finance Semester Review part 3 (chapters 7-12)
Total questions: 42
Worksheet time: 21mins
Grace, William, and Olivia went out for a meal. When the bill came, it was $3,552.09. Grace noticed an additional charge of $52.09 on the bill. She asked the waiter, and he explained that it was for not paying the bill in full the last time they dined there. What does the $52.09 represent?
consumer loan
financing options
line of credit
finance charges
David recently bought a brand new sports car. He understands that the value of his car will depreciate over time. What does that mean?
It means that the value of the car will stay the same.
It means that the value of the car will double.
It means that the value of the car will decrease.
It means that the value of the car will increase.
Arjun and Aria have been married for 5 years. They have finally paid off their student loans and purchased a home. They created a plan for their earning, spending, and saving so they could meet their financial goals. This plan has helped them meet their goals and allow them to live comfortably. What does this plan demonstrate for Arjun and Aria?
That they are financially irresponsible.
That they are financially responsible.
That they have no financial education.
That they have had many financial options in life.
Kai, James, and Grace were discussing about credit scores. Kai was curious to know which of the following categories has the greatest impact on Paige’s credit score?
Her payment history.
Her types of credit used.
Her amounts owed.
Her open accounts.
Michael, Abigail, and Avery are discussing about credit scores. Michael mentions that Paige is looking to improve her credit score. Which of the following situations would allow Paige to improve her score?
Paige takes out a loan and does not make any payments.
Paige decides to pay only cash for all of her purchases and bills.
Paige uses a credit card and makes payments every other month.
Paige ensures to pay her debts promptly on or before the due date.
Jackson, Aiden, and Aria are friends who are planning to start a small business. They learned that their friend Curtis has a preapproved loan at his local bank. He can borrow against it, pay it back, and borrow again as needed for his own business. They are curious to know, what has Curtis’s bank extended to him?
A revolving credit.
A consumer credit
A line of credit.
A credit card.
Ethan, Sophia, and William are roommates. They recently moved into a new house. Hank, their landlord, had all the utilities connected to the house before they moved in.
What type of credit is Hank using by having the utilities connected to the house?
Installment credit
Revolving credit
Service credit
Consumer credit
Mason is planning to apply for a mortgage loan. What is typically considered as collateral for his loan?
A boat
A stove
A house
A car
Evelyn, Noah, and Benjamin are roommates in their final year of college. Evelyn just got her first credit card and has been very careful about her spending. She always pays her bills on time and clears her balance in full. However, her recent credit card statement shows a balance of $1,498.13. If she doesn't clear this balance, she will have to pay an additional $32.95 on her next statement. What does this $32.95 represent?
A finance charge
A line of credit
A finance option
Consumer loan
Jackson, Benjamin, and Oliver are planning a road trip. Jackson suggests leasing a car for the trip, as he doesn’t want the hassle of using his own vehicle. There are many different makes and models of cars and trucks available for lease, even vehicles that Jackson couldn’t afford to purchase if he was going to buy a car. The lease option that he has checked into require him to be responsible for routine maintenance and provide proof of insurance coverage. He will be limited to12,000 miles per year. What advantage would Jackson gain by leasing a car for the road trip?
He can drive a more expensive vehicle than he could purchase.
He can drive as many miles as he wants.
He won’t need to pay for routine maintenance on a vehicle.
He won’t be required to have proof of auto insurance.
Harper, Mason, and Mia went out for a shopping spree. Harper used her credit card for all the purchases. Later, when she received her credit card bill, she discovered that one of the charges from their shopping day was duplicated. What is the first step that Harper should take to correct this mistake on her credit card bill?
She should cancel the credit card immediately.
She should call the credit card company and notify them in writing.
She should stop payment on the creditor’s check.
She should let the credit card take care of it.
Benjamin received an email stating that his bank account has been compromised and he needs to verify his account details. This is an example of what?
It is when Zoe files a lawsuit in small claims court
It is when someone uses Benjamin's personal information without permission to commit fraud.
It is when Abigail negotiates a settlement for Benjamin.
It is when someone claims to be able to repair Benjamin's credit.
Anika, Priya, and Hannah were discussing their finances when Anika noticed an error on her credit card bill. Under the Fair Credit Billing Act, what is the first step that Anika should do to preserve her rights?
She should write a letter explaining the issue in detail and provide receipts.
She should pay the bill and not worry about it.
She should cancel the card and shred her statements.
She should call the credit card company.
William and Evelyn are homeowners who are struggling to make their house payments as agreed. If they continue to fail in making their payments, they could have their property foreclosed on. What does this mean?
It means they will get to redecorate.
It means that their house will be taken away through a legal process.
It means that they will get a new loan.
It means that they don’t have to pay interest on their loan.
Anika, Elijah, and James are discussing the Fair Credit Reporting Act, which allows consumers the right to know what is in their credit file. James mentioned a reason that he believes is NOT a valid reason to check the contents of your credit file. Which of the following is that reason?
James said, 'You should check it to protect yourself against credit card fraud.'
James said, 'You should check it to make sure that your information is accurate.'
James said, 'You should check it to make sure that someone else can use your information.'
James said, 'You should check it to ensure that there aren’t any errors in your information.'
Avery recently noticed an error on his credit card bill. He discussed this with his friends David and Michael. They gave him some advice on how to correct the error. Which of the following advice is NOT true about correcting an error on a credit card bill?
The creditor has 1 year to correct the bill or show why it is correct.
Avery should write a letter describing the disputed charge.
The creditor has 30 days to respond.
Avery has 60 days to dispute a charge.
William noticed a suspicious charge on his credit card statement. He decided to write a dispute letter to his credit card company. Sophia, his friend, asked him what a dispute letter was. How would you explain it to Sophia?
It is a letter that explains William's vacation plans to the credit card company.
It is a letter that explains the disputed charge to his credit card company.
It is a letter that explains William's education to the credit card company.
It is a letter that explains William's life to the credit card company.
David borrowed money from Oliver to buy a car but failed to repay him as agreed. Oliver decided to take legal action and the court granted him a garnishment. What does this mean?
A court order that allows Oliver to repossess David's car
A court order that allows a portion of David’s salary to be withheld to repay Oliver
A court order that attaches the debt to David's house
A court order that absolves David from repaying the debt
Maya, Sophia, and Nora went to a store to buy a toy. Maya chose a teddy bear, Sophia chose a doll, and Nora chose a puzzle. Nora had to give up the teddy bear to buy the puzzle. What is the opportunity cost for Nora?
It is the value of the money spent when Nora chose the puzzle.
It is the value of what Nora saved when she chose the puzzle.
It is the value of the puzzle that Nora purchased.
It is the value of the teddy bear that Nora gave up to buy the puzzle.
Michael, Nora, and Aria are discussing their financial plans. Michael suggests they should all have an emergency fund. Nora asks, 'What is the purpose of an emergency fund?'
It is to be used for vacations.
It is to pay for unexpected expenses.
It is to be used for retirement.
It is to spend as you desire.
Emma, Abigail, and Hannah are discussing their financial habits. Emma mentions the concept of “paying yourself first”. What does she mean by this?
She means to charge as much on your credit cards as possible.
She means to save as little money as possible.
She means to set money aside for savings before you pay your bills.
She means to spend all of your money frivolously.
James, Elijah, and Avery are planning to invest their savings. They understand that investing is a strategy to earn more on their money than the rate of inflation. According to them, what is the purpose of investing?
The purpose is to make their money grow.
The purpose is to prepare for unplanned events.
The purpose is to accumulate assets over their lifetime.
The purpose is to create deferred spending.
Maya, Ethan, and Luna are working together on a project to understand the importance of saving and investing. They hope to learn how to meet their current and future needs and live comfortably. What are they seeking through this project?
They are seeking diversification.
They are seeking financial security.
They are seeking estate planning.
They are seeking retirement planning.
Nora, Zoe, and Benjamin were discussing their financial situations. Nora mentioned a situation where she had to pay for an unexpected car repair. She was able to do so without any hassle. What is the ability to quickly turn assets into cash, as Nora did in this situation?
It is wealth.
It is savings.
It is liquidity.
It is investing.
Scarlett, Hannah, and Charlotte are discussing their individual retirement accounts (IRAs). Scarlett mentions that her IRA is tax-deferred. Hannah and Charlotte are confused about what it means to be “tax-deferred”. Can you explain it to them?
It means that Scarlett's investment has grown.
It means that Scarlett doesn’t have to pay taxes on the interest earned.
It means that Scarlett gets a money match from her employer.
It means that Scarlett doesn’t have to pay taxes on the gains until she makes withdraws.
Abigail, Aiden, and Mia are planning to invest their savings. They want to reduce the risk of their investments. What is the process called where they spread their assets among several different types of investments?
Spending
Planning
Saving
Diversification
Lily, Anika, and Sophia are roommates. Their water heater broke down in the middle of winter. It will cost them $1,000 to replace it. They need to get cash quickly to get their water heater replaced. What characteristic does their emergency fund need to accommodate their need?
It needs to be a foundation.
It needs to be invested.
It needs to be liquid.
It needs to create wealth.
Daniel is considering investing in a Certificate of Deposit. Aria and Sophia are helping him understand the characteristics of this investment. Which of the following characteristics they mentioned is NOT true about a Certificate of Deposit?
It could lose value because of inflation.
It is a liquid investment.
It has an early withdrawal penalty.
It is FDIC insured.
Harper, Charlotte, and Liam are discussing their savings. Harper says that an investment is considered liquid if it can be easily converted to cash. Is Harper correct?
No, an investment is liquid if it has a very low risk.
No, an investment is liquid if it is a long-term investment.
No, an investment is liquid if it has a high rate of return.
Yes, an investment is liquid if it can be easily converted to cash.
James, Scarlett, and Benjamin are discussing their 401(k) plans at work. Dawson, their colleague, overhears their conversation and joins in. Which of the following statements about Dawson's 401(k) plan would he find NOT to be true?
His contributions to the plan are limited.
He can select the investments in the plan.
He must be employed by a profit-seeking businesses.
He won’t have to pay any early withdrawal penalties.
Briana is a nurse at a local community hospital where Kai, Abigail, and Evelyn also work. The hospital, being a nonprofit organization, offers its employees an opportunity to contribute to an employer-sponsored retirement plan. Which retirement plan would Briana and her colleagues be using at their workplace?
Keogh
Roth IRA
403 (b)
401(k)
Oliver, Grace, and Noah are interested in investing in the stock market. They approach a professional for help. What is the role of this professional, often referred to as a stockbroker?
A qualified broker who provides advice to Oliver, Grace, and Noah about what to buy and sell.
A broker who sells and buys securities for Oliver, Grace, and Noah for a reduced commission.
A licensed professional who buys and sells securities on behalf of Oliver, Grace, and Noah.
An adviser who helps Oliver, Grace, and Noah make investment decisions based on their goals.
Imagine Aiden, Olivia, and Mason are studying the 2008 financial crisis. They are discussing the economic consequences that resulted from fraud in the financial markets during that time. What could be one of those consequences?
Housing became scarce.
Stock market experienced gains and job growth.
Businesses experienced high sales.
Job loss and business failures were widespread.
Abigail is a self-employed professional who is planning for her retirement. She is considering different types of retirement accounts. Which type of retirement account is typically used by self-employed professionals like Abigail?
SEP
Roth
Keogh
403(b)
Avery, Arjun, and Emma were discussing their financial plans. Arjun mentioned something about a savings account that made Avery and Emma confused. Which of the following statements that Arjun might have said is NOT true about a savings account?
It has a high interest rate.
It is FDIC insured.
It is a safe option for saving money.
It is a liquid asset.
David, Hannah, and Priya are discussing their savings accounts. David mentions that his money market account does not require a minimum balance. Which of the following is NOT true about David's money market account?
It does not require a minimum balance.
It is FDIC insured.
It has a limited number of monthly withdrawals.
It is a liquid asset.
Ava, Lily, and Aria are planning for their future and discussing retirement plans. Ava mentions a type of retirement account where the contributions are taxed, but not the earnings. Can you recall which retirement account Ava is referring to?
Roth IRA
Traditional IRA
501k
Pension
Isla, Henry, and Michael are planning to invest their savings. They are looking for an adviser who can help them make investment decisions to meet their stated goals. Who among the following would be the most suitable for this role?
full-service broker
online broker
stockbroker
financial planner
Michael, Ava, and Aiden are discussing their investment strategies. They are considering the potential tax advantages of investing. Which of the following is NOT a potential tax advantage of investing?
Earnings will not provide Michael with significant income.
Ava's earnings from investments can be tax exempt.
Investments can put Aiden into a different tax bracket.
Taxes can be postponed through investing.
Ethan, Evelyn, and Mia are discussing their investment strategies. Ethan believes in high risk, high reward investments. Which investment mentioned by Ethan is considered a high risk investment?
real estate
options
growth stocks
money market accounts
Ethan, Elijah, and Liam are discussing their future financial plans. Ethan suggests investing in Growth Stocks, Elijah suggests Speculative Stocks, while Liam suggests Life Insurance. If they want a low risk investment, whose suggestion should they follow?
Ethan's suggestion: Growth Stocks
Elijah's suggestion: Speculative Stocks
Liam's suggestion: Life Insurance
Invest in Corporate Bonds
Abigail, Maya, and Aiden are discussing their investment strategies. Abigail believes in moderate risk investments. Which investment, according to her, would be a moderate risk investment?
real estate
money market accounts
speculative stocks
options
