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WorksheetsFINAL EXAM PREP PERSONAL FINANCE SP22 WYKLE
Total questions: 65
Worksheet time: 33mins
A lawnmower that normally sells for $200 is on sale for 25% off. How much is the lawnmower after the discount and before sales tax?
$175
$170
$125
$150
If sales tax is 10%, how much sales tax must you pay on an oven that costs $500? (Percentages must be converted to decimal number before multiplying.)
$10
$50
$5
$100
Which of the following best refers to money available to you to use as you like or need after taxes have been deducted from your gross pay and your budgeted expenses (bills such as rent, utility bills, etc.) have been covered?
variable
fixed
obligatory
discretionary
What is the first step to long-term budgeting success? (Hint: It's behavioral, at heart.)
Establish your budgeting habits first, then adjust your spending habits.
Monitor your spending and adjust it whenever you feel like it
Adjust your spending habits then set a budget based on these adjustments.
Include all your bills in your budgeting plans.
Which of the following is NOT a fixed expense? (Hint: Which of these expenses is subject to change most in amount from week to week or month to month based on usage or need?)
cable/internet
gasoline for car
rentq
loan repayment
Which of the following is a major advantage paying with cash?
Excessive spending is more likely to occur if a larger bill is broken for minor purchases.
People tend to regret purchases make with cash.
Spending is limited to available cash.
If a person runs out of cash, she can easily make a withdrawal at an ATM.
Which of the following is a common non-monthly expense that could be included in a monthly budget?
power bill
rent
internet/cable
auto maintenance
Which of the following is NOT considered a type of college financial aid?
pell grants
subsidized/unsubsidized loans
parental support
tuition waivers
All of the following are true about why it is important to complete the FAFSA process EXCEPT:
It allows you to be eligible for federal student aid.
It allows you to be eligible for early admission.
It allows you to be eligible for some grants.
It allows you to be eligible for many scholarships.
When calculating Return On Investment (ROI), which of the following best describes the BENEFIT of a college education?
the amount of money it costs to attend college
the amount of money you will make at a job once you get your degree
the amount of money you will have to borrow in order to attend college
the amount of money you will have to pay in interest on your loans
Which of the following is true about the FAFSA?
Money is awarded on a first-come, first-served basis.
You must use your parents' tax information unless you are married
You must use your parents' tax information unless you are 24 years old
All of these are correct
Which of the following describe who a "dependent" is for tax purposes when you file taxes as an adult, independent income earner?
Someone who is temporarily disabled that you know in your apartment complex
Someone who financially supports you
Someone who is a part-time graduate student over the age of 30 in your family
Someone who you financially support, such as a child under the age of 24
Find the simple interest earned with the following: Principal: $18,000, Interest Rate: 3.5%, Term: 5 years. [P x R x T]
$19,400
$3,150
$3,081
$4,421
Which of the following best describes the "snowball method" of paying off debts?
the amount of debt gets bigger as each payment is made
debt is paid off faster because each payment amount is the same
you start off with the smallest debt and pay all debts off faster with increasing amounts
paying off debt takes a long time and you pay less and less each time bills are due
Which of the following is not one of the 3 steps to financial freedom?
Invest your money
Build an emergency fund
Use the snowball method
Establish a crisis fund
Which of the following is an example of a luxury that could be eliminated from a budget?
groceries
medical insurance
restaurant visits
gas for car
How much money should you have in your EMERGENCY fund (not a crisis fund)?
$1,000
$5,000
1-2 Months of Expenses
3-6 Months of Expenses
(Miles driven/MPG) x gas price = ?
how long it will take you to get to a destination
the cost of gas per miles driven
the amount you need for an oil change
how to calculate a monthly car loan payment
Which of the following is NOT a major cost of vehicle ownership?
Financing/Insurance
Fuel/Gas
Repairs/
Maintenance
Cleaning/
Detailing
When a person owes more on a car than it is worth, what is this called?
being upside down
standing sideways
building equity
liquefying the asset
Which of the following maintenance issues is most likely going to be the responsibility of a landlord, not a tenant?
lawn care
replacing missing floor tiles
snow removal
garbage and recycling
Which of the following apartment or home rental expenses is potentially refunded to the lessee (the person renting)?
rent
insurance
parking fees
security deposit
How does insurance help consumers?
insurance offsets or shifts the financial risk involved with unexpected events
people with insurance earn dividends on their policies because it is an investment
the insurance company makes money regardless of the consumer's needs
having insurance means you will never have an accident
For what circumstance does a licensed driver need liability insurance?
injury to another driver and/or damage to their car if you are in an accident
non-accident damages such as lost wages from missing work due to an accident
damage to your vehicle from an accident
the cost the other driver at fault is responsible for if they don’t have insurance
The legal document that states what your insurance agreement contains is called a/an:
deductible
policy
premium
liability
The portion of a claim that a person must pay before her insurance company contributes is called a/an:
deductible
policy
premium
liability
The money paid for an insurance policy is called the:
deductible
fee
premium
policy
How much interest will you owe if you pay off your entire credit card balance each month?
none
half
depends on the interest rate
depends on what day of the month your balance is due
Which of these items is MOST important to consider when selecting a credit card?
cash back rewards
24 hour customer service
interest rates and fees
credit limit
Which of the following is a benefit of having a good credit score?
receiving discounts at local stores
being offered significantly lower interest on all types of loans and financing
earning a higher salary
getting accepted to better educational institutions
Credit cards can help _____________ when paid off on time regularly.
build credit your score/report
you understand personal finance better
you with going into debt
you open more lines of credit
Which of the following will NOT help you protect yourself from identity theft and fraud?
regularly monitor your credit report
contact lenders and credit bureaus to address incorrect information
freeze your credit/close your cards
wait for someone to contact you from a credit ratings agency
April 15 is the date that:
W-2s are sent to employees by their employers
taxes are normally due
the date by which you need to complete your W-4
you must file an extension with the IRS if you need more time to pay your taxes
Form W-2 is:
used to declare filing status, dependents, and other withholdings to your employer
used to declare your earnings and tax obligation to the IRS
used by employers to show earnings and withholdings from paychecks
all of the above
Form 1040 is:
used to declare filing status, dependents, and other withholdings to your employer
used to declare your earnings and tax obligation to the IRS
used by employers to show earnings and withholdings from paychecks
none of these are correct
Your friend is talking to you about the benefits of tax filing software. Which of the following is true?
Filing your taxes using all commercially available tax prep software is always free of charge.
You are 50% less likely to make a mistake when e-filing your taxes.
You are guaranteed a higher refund than if you were to use a paper form or hire a pro.
You avoid the cost of paying a pro, though you may have to pay for software or e-filing.
Which of the following is NOT a major cost of home ownership?
utilities
property tax
lawn care
homeowner's insurance
This type of mortgage changes periodically. It is fixed at a lower rate initially and then adjusts annually.
Adjustable-Rate Mortgage (ARM)
Fixed-Rate Mortgage
Depreciating-Rate Mortgage
FHA-Rate Mortgage
What does getting “pre-qualified” for a home loan mean?
It is the same as being "pre-approved" for a home loan.
The bank will determine if a person is eligible to purchase homeowner's insurance.
The bank will determine the amount it is willing to loan a prospective home buyer.
The bank will determine the amount it costs to hire an assessor to determine the value of a home.
Depreciation of a home means:
the value increases over time
the cost of the home is greater than a person’s income
the value decreases over time
the cost of the home is lower than a person’s income
All of the following are risks of investing in a single company's stock, EXCEPT:
if the company’s profits decline, the stock price could decrease
if the overall stock market is thriving, it means that it will always thrive
if the overall stock market declines, the stock price could decrease
if the company goes out of business, stockholders could lose their entire investment
What is a bond?
you loan money to a government entity and are paid back with interest after a set period of time
a loan you can get from the federal government that you must pay back with interest
you loan a private company money and hope that they decide to pay a dividend
a loan of money to another individual which they must pay back with interest
In terms of investments, what is diversification?
the creation of a portfolio that includes multiple types of investments in order to reduce risk
the balance of risk and reward by selling off hard assets in the short term
the combination of investment money from multiple people in one company, as in a mutual fund
focusing on types of investments that pay a fixed rate of return, such as bonds
Investing allows you to _____ while saving is best for ____.
accumulate wealth in the long-term (after many decades); shorter-term (up to 5 years in the future) purchases and emergencies
short-term purchases and emergencies; the accumulation of wealth
get money no matter what; getting a return on long-term investments
earning between 1-2%; earning between 5-7%
A subsidized loan is one for which interest is applied to the principal while you’re still in school.
TRUE
FALSE
Which of these has nothing to do with when you can no longer claim to be a dependent when filling out the FAFSA?
you get married
you turn 24
you have your own kid and provide at least 50% support for it
you start working
How much should you have in a CRISIS fund? (not an emergency fund)
1 month's salary
3-6 months of expenses
$1000
$5000
The "principal" of any type of loan is the original amount loaned or borrowed.
TRUE
FALSE
The most important factors in getting pre-approved for a car loan are your income and credit score.
TRUE
FALSE
Collision insurance pays for non-accident related problems that arise such as a tree falling on your car or your car getting vandalized.
TRUE
FALSE
Credit cards are term loans onto which interest is applied daily, unlike revolving loans, onto which interest is applied monthly.
TRUE
FALSE
Which one of the following is NOT one of the three major CRAs (credit/consumer reporting/rating agencies)?
Equifax
Western Union
TransUnion
Experian
You are more likely to be offered low interest rates on loans (such as for car or house financing) and credit cards if you have a credit score in the mid-700s.
TRUE
FALSE
How long you have had credit is the most important factor (35% or greater) used by credit reporting agencies when determining your credit score.
TRUE
FALSE
Your NET pay is the amount you receive from your employer BEFORE taxes and other deductions such as those for health insurance and retirement are subtracted.
TRUE
FALSE
The purpose of the W-4 is to tell your employer at the time you are hired how much should be withheld from each of your paychecks for the payment of federal taxes each time you will be paid.
TRUE
FALSE
Federal Housing Authority (FHA) loans have rates as low as 3.5% and any U.S. homebuyer is eligible for them, regardless of how many homes they have owned.
TRUE
FALSE
Investing in companies with large market caps is considered speculative or risky.
TRUE
FALSE
A diversified investment portfolio will yield a 6%-12% return in the long term due to compounded interest.
TRUE
FALSE
Having only one kind of investment in only one sector of the economy reduces the risk of loss.
TRUE
FALSE
Which of the two types of retirement funds are accessible through an employer?
pension & Roth IRA
pension & 401(k)
pension & traditional IRA
traditional & Roth IRA
Index funds and mutual funds are exactly the same in that they both invest funds in various sectors of the economy based on an objective or philosophy.
TRUE
FALSE
Which of the following does NOT describe a bond:
a loan of money to a government entity or corporation at a set interest rate for a set period of time
a conservative/safe type of investment instrument
a good idea for a long-term investment
a risky investment that makes you part-owner of a company
Which of the following does NOT describe stocks as an investment tool:
give you partial ownership in a company
considered risky investment in the short term because of volatility
yield dividends (profits to shareholders) annually
can be bought from the federal government in the form of T-bills
The fixed interest rate for a conventional home loan is generally around 5%.
TRUE
FALSE
