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WorksheetsConsumer Education - Final Exam Review
Total questions: 45
Worksheet time: 23mins
Companies are now required to offer private health insurance plans to employees. *
True
False
Comprehensive automobile insurance is required when you finance a car.
True
False
House insurance will help cover the cost of fixing damage to a house caused natural disasters.
True
False
It is wise to get multiple quotes for any type of insurance to compare coverage and cost.
True
False
The fist number of liability coverage (50/100/25) indicates that what is insured for $50,000?
Bodily injury for all the people in an accident that involves at least four people.
Property damage for the person at fault
Bodily damage for a single person in an accident that is not at fault
Property damage for the person not at fault in an accident
Comprehensive insurance covers what kind of damage to an automobile?
Only repairs needed due to a collision with another automobile
Damage caused due to a collision with an animal
Damage caused by a tree that falls on the car
Only b & c
None of the above
Which of the three types of savings accounts requires you to agree to the money being deposited for a specified period of time?
Regular savings
Money market account
Certificate of deposit
Mutual funds
Which of the three types of savings accounts typically requires you to maintain a minimum balance?
Regular savings
Money market account
Certificate of deposit
Mutual funds
9- Compound interest allows you to______________?
Earn interest on your original deposit only
Pay interest for borrowing money
Earn interest on the original deposit plus interest earned
None of the above
What is the first basic principle of investing?
Wait to invest until after college
Begin investing now
Don’t invest – it is too risky
Always invest for the short term
What is the recommended amount you should keep in a savings account?
One ~ two months of expenses
One year of expenses
Three ~ six months of expenses
Don’t worry about savings
Financial advisors are available to you in case
You need to borrow money
Need help and advise on investing
You feel lonely
None of the above
Before you invest money, you need to be aware of
Your risk tolerance level
That higher risk equals higher returns
That lower risk equals lower returns
All of the above
Bonds are considered best for
Long term investing
Short term investing
The high risk investor
The low risk investor
Both b & d
When investing in the stock market, it is best to
Invest all your money in one stock
Invest money in companies you know nothing about
Invest your money in a number of different stocks
Run away!
Choose the item that best represents what a mutual fund is.
A collection of different stocks to minimize risk
A way for someone with a smaller amount of money to invest in the stock market without having to buy all of one stock
It has a particular strategy of investment
All of the above
If you decide to buy a 12,000 euros car, the minimum down payment is 10% you should plan on paying
2,400 Euros
120 Euros
1,200 Euros
1,000 Euros
If you decide to buy a 12,000 euros car, the minimum down payment is 10% you should plan on paying
2,400 Euros
120 Euros
1,200 Euros
1,000 Euros
23- Does gender impact auto insurance premiums?
Yes. Men tend to have more accidents and pay higher premiums.
People under 25 years of age pay higher premiums.
Yes. The more one drives, the more likely an accident may occur. The rates typically rise when vehicles are driven more than 7,500 miles per year.
Yes. Married people, statistically speaking, have fewer auto accidents and pay lower premiums.
The payment you receive is based on the replacement cost of an item minus depreciation
Household inventory
Liability insurance
Actual Cash Value
Replacement value
Replacement value
A list or other documentation of personal belongings, with purchase dates and cost information
A claim settlement method in which the insured receives the full cost of repairing or replacing a damaged or lost item
The payment you receive is based on the replacement cost of an item minus depreciation
Provides payment to others if a member of the insured household accidentally causes harm to other people or property.
Peril is:
Cause of loss
Possessions such as jewelry, furniture, and boats
Careless neglect, often resulting in injury
A danger or risk.
Creating a budget can make you feel powerful! Why?
People who budget earn more money, so they can live a better life
A budget puts you in control of your spending and saving, so you make good decisions and feel more confident
You can't really budget unless you have an important job, which means that other people look up to you
Budgeting is extremely easy, so once you set it up, you are done for good and can spend time on other things
Ada has just moved into her own apartment and is working full time. Each item below would go into her budget in the "Monthly Bills" category EXCEPT...
Cell phone plan
Rent
Clothing
Renters insurance
The two main portions of a budget are...
the money coming in (income) and the money you're spending (expenses)
the money coming in (expenses) and the money you're spending (income)
the cash you are spending in stores and the bills you are paying online
the items you want to buy and the money you need to save for retirement
Why is it important to be able to decide if an item is a NEED or a WANT?
Needs are worth spending money on, but you should never spend on a want
Needs can be very expensive, but wants are usually far less expensive so you don't need to keep track of them
You cannot create a budget that has both needs and wants included -- you need them each in a separate budget
When you budget, you should make sure all your needs are met first, then you can decide to spend on wants
Ethan is considering updating his cell phone plan to include unlimited data. In which situation could unlimited data be a NEED for Ethan?
He loves watching movies, and he's already paid for all the streaming services, so now he needs the data
Unlimited data will allow him to play video games with his friends even when he's not at home, and he LOVES video games
He has so many social media accounts, and he needs to be able to check them throughout the day, even while in school
He has an hour-long bus ride each direction to and from school, and he needs that time to complete homework and submit it all online
Marsha is trying to determine if an item at the mall is a NEED or a WANT. Which question will be most helpful?
Will something bad happen if I don't have this item?
Do any of my friends have this item?
How happy will this item make me?
Will my teachers be excited if I buy this item, or will they be disappointed?
Justine's part-time job pays her 8 euros per hour. She works for 10 hours this pay period. How much is her gross pay?
8 euros
80 euros
80 euros, minus any taxes she has to pay
80 euros, plus any taxes she has to pay
Brandon receives his paycheck, and it says his gross pay is 250 euros and his net pay is 200 euros. How much money did he have in deductions this pay period?
50 euros
200 euros
250 euros
450 euros
Why should you use your NET pay when creating a budget?
Your net pay will always be higher, so you'll have more money to spend
Your net pay is a more accurate picture of how much money you have available to spend or save
Your employer knows what your gross pay is, but you only know what your net pay is
Once you have your net pay, you can figure out how much to deduct in taxes, and then you can do your budget
Kylie plans on using the 50/30/20 rule for budgeting. How will she split her budget?
50% needs, 30% wants, 20% savings
50% budget, 30% needs, 20% wants
50% saving, 30% needs, 20% wants
50 euros needs, 30 euros wants, 20 euros savings
What does it mean to "pay yourself first"?
On payday, take some money out to reward yourself with some fun spending
Save money when you are young so you can spend more money when you are older
Any time you get paid, set aside some portion to save before you do any spending
Spend money on yourself first, then your immediate family, then friends or other relatives
What is the financial benefit of compound interest?
The interest rates banks offer for compound accounts are always higher than for simple accounts
When you earn compound interest, you earn interest on both the principal and any interest you've already earned
When earning compound interest, you don't accumulate as many bank fees
When you earn compound interest, you earn interest ONLY on the principal
What is a key difference between saving and investing?
Saving is for long-term goals; investing is for short-term goals
Saving earns a much higher rate of return than investing your money
Saving is setting aside money you don't spend now for emergencies or for a future purchase and Investing is buying assets such as stocks, bonds, mutual funds
Saving earns compound interest while investing earns simple interest
Select the best definition of compound interest.
Compound interest is earning interest on the original amount you deposited.
Compound interest is earning interest on the original amount you deposited plus any interest earned.
Compound interest is the amount of interest you are charged on your bank account each month.
Compound interest is earning a fixed dollar amount on your bank account each month.
What is a stock?
A stock is a share of ownership in a company.
A stock is a lending investment to the government or a company.
A stock is an insured bank account with high risk.
A stock is a type of investment that uses money from investors to purchase many different investment types.
Duncan plans to invest all of his money in individual stocks. Why is this likely a bad investment strategy?
He will need a large amount of money to invest in individual stocks.
Purchasing individual stocks has a very low amount of risk and a low return.
He will need to open multiple brokerage accounts for each stock he purchases.
Purchasing individual stocks has a high amount of risk and little diversification.
What is the purpose of insurance?
To manage risk
To build wealth
To build relationships
To manage liabilities
Reed pays $112 per month for his auto insurance. This amount is called his...
deductible
risk
premium
contribution
Which type of auto insurance coverage is used when another person is injured during an accident?
Collision
Liability
Comprehensive
Underinsured Motorist
Select the best definition of an insurance premium.
Your insurance premium is the amount you pay out-of-pocket if a loss occurs.
Your insurance premium is the amount you pay only when you need to use your insurance.
Your insurance premium is the amount of money you pay for the insurance policy.
Your insurance premium is the level of insurance coverage you have.
Which type of insurance covers your necessary medical costs, from doctor’s appointments to surgeries?
Auto Insurance
Disability Insurance
Health Insurance
Liability Insurance
Choose the correct words to finish this sentence: When choosing your insurance plan, you typically have the option of paying a ________ premium in exchange for ________ coverage or a ________ premium with less coverage.
lower; more; higher
higher; less; lower
higher; more; lower
lower; less; higher
Why is it important for you to understand YOUR risk tolerance before you start investing?
it is recommended that people with a low risk tolerance shouldn't invest at all.
If you have a high risk tolerance, you will likely pay less in investment fees.
You should create an investment portfolio that includes an amount of risk you are comfortable with.
You must be willing to take a high amount of risk to begin investing.
