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Personal Finance Knowledge Check

Total questions: 30

Worksheet time: 15mins

Name
Class
Date
1.

The amount of federal income tax withheld depends on both your level of earnings and the number of withholding allowances claimed.

a)

TRUE

b)

FALSE

2.

According to the "Rule of 72", my money will double in how many years:  Investment earning 4%.

a)

3

b)

18

c)

9

d)

1

3.

Which one describes the balance sheet equation:

a)

Net Worth = Liabilities + Assets

b)

Assets * Value = Equity

c)

Assets = Liabilities + Net Worth (Equity)

d)

None of the above

4.

Every individual or married couple is required to file a federal income tax return regardless of the amount of income earned.

a)

TRUE

b)

FALSE

5.

Tax credits and deductions reduce your taxable income by comparable amounts.

a)

TRUE

b)

FALSE

6.

At most banks and other depository institutions, you will be hit with a hefty service charge if your checking account balance falls even just $1 below the stipulated minimum amount for just one day out of the month. 

a)

TRUE

b)

FALSE

7.

U.S. Series EE and I savings bonds are not a very good way to save.

a)

TRUE

b)

FALSE

8.

How much would a home buyer have to pay at the time of closing -- take into consideration closing costs (50% of the down payment), down payment (20%), and a loan fee of 2 points.  The home is $250,000 and requires a 20% down payment.

a)

75,000

b)

79,000

c)

82,000

d)

85,000

9.

You should buy a car instead of leasing if you plan to drive it more than 150,000 miles over its life.

a)

TRUE

b)

FALSE

10.

Excluding mortgage payments, most families will have little or no credit problems so long as they limit their monthly credit payments to 25 to 30 percent their monthly take-home pay.

a)

TRUE

b)

FALSE

11.

Buying a new car is the major reason that people borrow money through consumer loans.

a)

TRUE

b)

FALSE

12.

Consumer loans can only be set up with fixed rates of interest. 

a)

TRUE

b)

FALSE

13.

A low APR is not as important as having a low payment.

a)

TRUE

b)

FALSE

14.

Selecting an insurance company is the first thing you should do when buying life insurance.

a)

TRUE

b)

FALSE

15.

With health care insurance that covers the whole family, children may be included up to age 26 as long as they are full-time students.

a)

TRUE

b)

FALSE

16.

Which one of the following include is not one of the most common financial resources needed after the death of a family breadwinner:

a)

special needs of dependents

b)

last medical & funeral expenses

c)

new car

d)

income needed to maintain an adequate lifestyle

17.

If you lose a lot of money because a broker gave you a poor investment recommendation, you can recover most or all of your loss by filing a claim with the Securities Investor Protection Corporation.

a)

TRUE

b)

FALSE

18.

You would have to save $2,500 a year in order to end up with a $25,000 nest egg in ten years.

a)

TRUE

b)

FALSE

19.

When interest rates go down, bond prices also go down because such securities become less valuable.

a)

TRUE

b)

FALSE

20.

In order to receive maximum social security retirement benefits, a worker must retire before his or her 66th birthday.

a)

TRUE

b)

FALSE

21.

All of the following are pitfalls to good retirement planning except:

a)

starting too late

b)

not having any money

c)

putting away too little

d)

investing too conservatively

22.

Due to recent changes in the law, a person no longer has to be mentally competent in order to draw up a valid will.

a)

TRUE

b)

FALSE

23.

To obtain more of one thing society forgoes the opportunity of getting the next best thing.

a)

utility

b)

economic principle

c)

opportunity cost

d)

microeconomics

24.

The state of being in short supply; shortage.

a)

starvation

b)

utility

c)

margin

d)

scarcity

25.

The total value of all goods and services produced in a country.

a)

Capital

b)

Gross Domestic Product

c)

Consumer Price Index

d)

Inflation

26.

A period of temporary economic decline during which trade and industrial activity are reduced.

a)

recession

b)

inflation

c)

supply

d)

shortage

27.

The 4 types of market structures include: perfect competition, monopolistic competition, oligopoly, and monopoly.

a)

TRUE

b)

FALSE

28.

A market structure in which many producers supply similar but varied products.

a)

perfect competition

b)

monopolistic competition

c)

oligopoly

d)

monopoly

29.

Long-term debt securities issued by the Treasury, government agencies, and corporations to finance their operations.

a)

mortgages

b)

loans

c)

bonds

d)

stocks

30.

Rule stating that more will be demanded at lower prices and less at higher prices.

a)

Law of Supply

b)

Law of Prices

c)

Law of Utility

d)

Law of Demand