WorksheetsFinancial Literacy IA6/Final Exam SY21-22 Review
Total questions: 50
Worksheet time: 25mins
What is a resume?
A list of people willing to recommend you for a job
A collection of work samples
A document that describes your qualifications for a job
A letter of application
What is direct deposit?
A deposit you make at an ATM
An interest payment from the bank
A transfer you make between two bank accounts
A deposit an employer makes into an employee's account
What should be left out of financial decisions whenever possible?
Emotion
Shared decision making
Financial plans
All of the above
Which of the following statements is TRUE about the value of a college education?
A high school graduate can expect to earn about the same as a college graduate.
A college graduate can expect to earn, on average, about $40,000 more than a high school graduate over a career.
If you start college but don't finish, your pay will be closer to the level of a high school graduate than the level of a college graduate.
College is only valuable if you want to increase how much you earn.
What is a stock?
A partial ownership in a company
A group of real estate investments
A regular payment a company issues investors
A government investment
Which loan type am I? I have limits on the amount that you can borrow based on your year in college. The federal government makes the interest payments on me while you are in college, and you make the interest payments on me after you graduate.
Unsubsidized Federal Student Loan
Private Student Loan
Subsidized Federal Student Loan
Institutional Student Loan
Commercial banks are funded through which of the following?
Customer deposits
Government funding
Stockholders
Services
The FDIC in the United States insures some financial accounts up to what amount?
$10,000
$250,000
$50,000
$500,000
Reading through a credit card disclosure (aka the Schumer Box), you see the A.P.R. for a specific card is set at 9.99% - 23.99%. Which of the following statements is probably TRUE?
When given a range of A.P.R.s like this, you can assume most cardholders pay the lowest rate listed
One of the primary factors determining your card's A.P.R. is your credit score
With credit card A.P.R.s, cardholders like higher A.P.R.s because they earn more
The A.P.R. on credit cards is usually fixed so they won't be adjusted as long as you are a cardholder
Which of the following statements comparing credit and debit cards is TRUE?
Far more businesses accept credit cards than debit cards
Credit cards pull money directly from your bank account, while debit cards get their money from Visa or Mastercard
Credit card companies provide you with a monthly statement, while debit cards do not
With debit cards, you're spending your own money at point of sale, while with credit cards, you're promising to pay back the money eventually
What financial product am I? I am a type of credit card that requires cardholders to make a security deposit equal to the credit limit on their account. Due to this deposit requirement, I am often a good choice for young people looking to establish their credit history.
Standard credit card
Secured credit card
Overdraft credit card
Rewards credit card
Which of the following statements is TRUE?
If you make the minimum payment on your card by the due date, the credit card company will not charge you interest.
If you pay your balance in full after the due date, the credit card company will not charge you interest.
If you pay your balance in full after the due date, you will be charged interest.
If you pay your balance in full by the due date, you will be charged interest.
Which of the following statements about Federal student loans is TRUE?
The Federal government offers numerous loan repayment plans, including standard, income-based, and graduated payments.
Federal student loans do not begin accumulating interest until after you graduate and are employed at least part time.
Federal student loans are typically more expensive than private student loans.
You must take the SAT or ACT to qualify for Federal student loans.
Elizabeth is considering buying a $30,000 car. Which financing option would have the LOWEST expected monthly payment and the HIGHEST expected total interest payments?
$0 down payment, 6% interest, 60 months
$0 down payment, 6% interest, 84 months
$3000 down payment, 6% interest, 60 months
$3000 down payment, 0% interest, 36 months
Which statement accurately describes a revolving line of credit?
You owe the same payment every month
You can buy additional items as you need them without getting approval for each purchase
They do not charge interest
One common example is a car auto loan
What are the two most important factors in calculating your credit score?
Payment history and type of account
Amounts owed and length of credit history
Payment history and amounts owed
Length of credit history and new credit inquiries
What is opportunity cost?
The principal in an investment account
The total amount of investments in a portfolio
The value of an investment opportunity you pass up in order to take another investment opportunity
The value of an investment opportunity when it's compared with all the other investments you've made in the past
Your friends are having a debate about rules of thumbs to use when it comes to student loan debt. Who is CORRECT?
Miguel says, "You should borrow as much money as you can through private student loans, and then take out federal student loans."
Dani says, "You should avoid student loans no matter what, even if that means you have to work long hours and can't take a full course load."
Jason says, "You should generally limit your borrowing to what you expect to earn as a starting salary when you graduate from college, and avoid private student loans."
Aisha says, "You should borrow all of the financial aid your college offers you in your financial aid offer, even if you don't need it all."
Which of the following is a variable expense?
Rent on an apartment
Groceries
A gym membership
A car payment
Which of the following is a liability?
Bonus paycheck
Credit card balance
Investment fund
Savings account
Which of the following is something you would not expect to see withheld from your paycheck?
Federal income tax
State income tax
Sales tax
Social Security
Who tracks all of your credit information?
Companies named Equifax, Experian and TransUnion
Federal government
Consumer Financial Protection Board (CFPB)
Lenders
A lender checking Jason’s credit score for an auto loan would likely notice that...
His savings account has more than $3000 in it
He paid off a car loan after making every payment for 4 years
When he stopped paying his credit card for 3 months 9 years ago
The credit scores of his family, including his parents and his wife if he is married
Which of the following careers is most likely to involve preparing tax returns for individuals?
Accountant
Chief Financial Officer
Comptroller
Risk manager
Which of the following could have a NEGATIVE impact on your credit score?
Paying your bills on-time
Paying down balances on your credit card accounts
Decreasing your utilization of credit
Applying for multiple credit cards in a short period of time (e.g., a week)
Which statement accurately describes a strategy for paying down debts?
The DEBT SNOWBALL method is to pay the highest interest loans off first while making minimum payments on the others.
The DEBT SNOWBALL method is to pay off the smallest loans first, which can be motivating because you will have fewer sources of debt.
The HIGH RATE method is to only make payments on the loans with the highest interest rates.
The HIGH RATE method is to pay off the biggest loans first, because they will have the highest interest payments overall.
Which of the following is a potential consequence of not paying your debts?
Lender can file bankruptcy on your behalf
You are turned down for new loans
Lose your job
Collection agencies begin visiting your friends and relatives to collect your debt
What is networking?
A way for employers and employees to connect using social or professional relationships
A way for employers and employees to post and respond to classified advertisements
An online database for employees to post resumes
A company department that matches job seekers with job openings
What does a negative net worth indicate?
Your assets exceed your liabilities.
Your assets equal your liabilities.
Your liabilities exceed your assets.
You have only assets and no liabilities.
Which of the following actions puts you at risk for dumpster diving?
Not shredding financial documents when you’re done with them
Choosing online passwords that are easy to guess
Giving out your Social Security number over the phone
Having a mailbox in an unsecured location
Which of the following is a short-term financial goal?
Saving for retirement
Saving for college
Buying a birthday gift for a friend
Buying a house
In financial terms, when someone refers to the return on investment for a college education, the return refers to the _________________ and the investment is the _______________________.
Increased earnings from attending college, time spent pursuing your degree
Cost of your education and the time spent pursuing your degree, increased earnings from attending college
Decreased earnings from attending college, stock market returns
Increased earnings from attending college, cost of your education and the time spent pursuing your degree
Which statement accurately describes a revolving line of credit?
You owe the same payment every month
You can buy additional items as you need them without getting approval for each purchase
They do not charge interest
One common example is a car auto loan
The number one reason risk pooling is valuable to the insurance industry is...
It allows companies to charge the same premium to all members of the pool.
It brings together many individuals' premiums so that there is money to cover the select few with losses.
It makes insurance coverage available to everyone, even those who are unable to make their payments.
It is subsidized by the federal government.
Going to an in-network doctor is a good idea, because...
you will receive a higher quality of care.
you will save on overall costs when compared to seeing an out-of-network doctor.
you will get a significant tax credit for that year.
you will always work with a primary care physician who manages your overall health.
How is long term disability insurance different from health insurance?
Health insurance only covers the cost of healing the injury/illness, while long term disability covers a percentage of your income while you are away from work due to the injury/illness.
Long term disability only covers the cost of healing the injury/illness, while health insurance covers a percentage of your income while you are away from work due to the injury/illness.
Long term disability insurance is an extension of health insurance offered only at select hospitals.
Health insurance is optional and long term disability is mandatory in all US states.
Optional insurance plans, such as cell phone and pet insurance, can be useful for people who have a history of frequent visits to repair shops or vets. For folks who do not often need these services, which of the following options is the BEST alternative to these types of insurance plans?
Trying to fix complicated issues themselves by learning online.
Setting aside the monthly premium amount into a savings account as an emergency fund.
Avoiding purchasing a phone or pet until they can pay for the best insurance plans.
Bringing their phone and pet with them everywhere they go so that they can ensure that nothing unexpected happens.
Margaret opened her mail this morning and is shocked to see her total hospital bill for her recent injury. She's worried she can't afford to pay this bill. What is the BEST thing she can do?
Ignore the bill so that the hospital understands that she can't afford to pay it back.
Use her credit card(s) to pay back the bill.
Take out a personal loan to cover the cost of the bill.
Negotiate a repayment plan in which she can pay the bill back in installments.
What is the difference between a declaration page and an agreement when referring to your homeowners insurance policy?
Inexpensive policies have the one-page declaration, while full coverage policies have an entire agreement
The declaration page details exactly what is covered, while the agreement outlines how much you'll pay monthly
The declaration page lists all the possessions inside your home, while the agreement explains the details of your policy
The declaration page outlines the premiums, deductibles, and coverage limits, while the agreement provides details on exact coverage
Which of the following people probably needs life insurance the most?
An unmarried person with no children
A person who is about to retire
A mother whose children depend on her income
A person who has no children, unmarried and a large amount of money in savings
If you feel your insurance company is not upholding your policy correctly and you can't resolve it directly with the company, you will likely have the most success by contacting...
Your US Senator or Congressperson
The Federal Trade Commission
Your state's Department of Insurance or Insurance Bureau
Your local police department
Uma's renters insurance policy has a premium of $15/month, a deductible of $1000, and a personal property coverage limit of $40,000. Her apartment is burglarized and $5,600 of possessions are stolen or destroyed. How much will Uma pay in order to replace her stuff?
$15
$15/month for as many months as it takes her to pay back off the $5600 (approx 370 months)
$1000
$5600
After getting into a car accident, you should immediately...
Move you and your car to a safe area if possible and check to see if anyone is hurt.
Call your insurance agent and assure them you were not at-fault.
Get out of the car and take photos of the accident.
Start filing your auto insurance claim.
What is one difference between an HSA and an FSA?
Only an HSA can be used to cover the care for a spouse or qualified dependents.
You use pre-tax money for an FSA and use post-tax money for an HSA.
FSA funds must be used up annually, while HSA funds can accumulate year over year.
An FSA moves around with you even if you change jobs; an HSA stays with your employer.
A standard homeowners policy will include all of these coverage bundles except...
Dwelling
Other Structures
Personal Property
Earthquake and Flood
The actuarial value of a plan is...
the percentage of costs the insurance company will cover.
the percentage of costs you will cover.
the percentage of costs that are covered through a government subsidy, if you are eligible.
the percentage of your overall healthcare costs that go toward your monthly premiums for the year.
Which of the following auto insurance coverages are you REQUIRED to carry in most states?
Personal Injury Protection
Collision
Comprehensive
Liability
Where does funding for Social Security come from?
From people who opt-in to a Social Security plan before age 25
Leftover funding from hospitals and retirement homes
Social Security payroll taxes
Fundraising events hosted by the Social Security Administration
Which of the following is an example of earned income?
Transfer payments
Wages
Investments
Gifts
What is a volatile investment?
An investment that can change quickly without warning
An investment that is fairly low risk
An investment that requires a high volume of investors
An investment that gains value slowly over time
