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WorksheetsMoney Matters - Final Exam
Total questions: 70
Worksheet time: 56mins
Name
Class
Date
1.
Mandatory government spending includes which of the following?
a)
Infrastructure and science
b)
Social Security and Medicare
c)
Healthcare and military
d)
Education and agriculture
2.
What does the term "withholding" mean in reference to your paycheck?
a)
The amount of your paycheck that you are NOT being taxed on
b)
How much you are going to owe the government when you file your annual tax return
c)
How much you earn and includes salary, bonus and commissions
d)
How much is being taken out of your paycheck for things like taxes, employer sponsored health insurance, and retirement
3.
When do you start paying income taxes?
a)
When you turn 18
b)
When you get a full-time job (part-time does not count)
c)
When you make more than the minimum income requirement
d)
When you are notified by the IRS that you are required to pay federal income taxes
4.
Why is it important to be extremely careful when completing your 1040 form?
a)
Making a mistake will disqualify you from receiving future refunds
b)
The 1040 form determines whether you owe additional taxes or are entitled to receive a refund from the government
c)
Completing the 1040 incorrectly will mean the wrong amount of taxes will be withheld from your paychecks going forward
d)
Mistakes on your 1040 form make you ineligible for employment during the next year
5.
If your only income is salary paid by your employer, which of these statements about filing your taxes is true?
a)
You need to file your tax return by the end of the calendar year (typically December 31st)
b)
If your employer takes out federal income taxes through payroll withholdings, you do not need to file a tax return
c)
You must file your tax return by the deadline (typically April 15th of the following year) or request an extension by that date
d)
You do not need to pay any income taxes until April 15th, so you should ask your company to wait until after that date to withhold any money
6.
You are starting your first job and you are asked to complete some paperwork on your first day. Which form will determine how much money is withheld from your paycheck for taxes?
a)
W-4
b)
W-2
c)
I-9
d)
1040
7.
Which of the following paycheck withholdings puts money into a retirement investment fund that you will manage?
a)
Social Security
b)
Medicare
c)
401(k) contribution
d)
Federal income taxes
8.
When determining whether you NEED to file a federal tax return, each of these questions matters EXCEPT…
a)
How much income did you earn this year?
b)
What type of income did you earn this year?
c)
What state do you live in?
d)
Are you claimed as a dependent on anyone else's tax return?
9.
Juanita has a part-time job that pays $12/hour and works about 50 hours every month. Her withholdings are Social Security (6.2%), Medicare (1.45%) and federal income tax (10%). What is her approximate net pay?
a)
120
b)
500
c)
600
d)
700
10.
Which of the statements about this W-4 is TRUE?
a)
Mr. Khan is filing as married filing jointly
b)
Mr. Khan is requesting for an additional $50 to be withheld from his paycheck
c)
Mr. Khan submitted this W-4 two days after he started working at Little Company Inc.
d)
Mr. Khan’s paycheck will have less money withheld from his paycheck since he is claiming a dependent
11.
Elaine just accepted a new job and is working with the company’s HR department to fill out paperwork. Which of the following steps is she responsible for?
a)
Determine how much tax to withhold from her paychecks based on W-4 information
b)
Complete a W-4 form
c)
Send withholding amounts to the federal government
d)
Complete a W-2 form
12.
What is the name of the tax form that requires you to provide identification and proves you are eligible to work in the U.S.?
a)
I-9
b)
1099
c)
1040
d)
W-4
13.
Which of the following statements about this W-2 form is true?
a)
Avia Consulting will use this W-2 to file their 1040 form
b)
Lily earned about $117,000 over the year based on the total of her Wages, Social Security wages, and Medicare wages
c)
Lily paid state income taxes of $1,189.90
d)
Lily works in the same city that Avia Consulting is based in
14.
When you complete your 1040 form, if you overpaid your taxes and the government owes you money, that is called a __________.
a)
withholding
b)
direct deposit
c)
deduction
d)
refund
15.
Question #1 of 3: What was the net (or take-home) pay for this employee for this pay period?
a)
495
b)
744.1
c)
2744.1
d)
3600
16.
Question #2 of 3: How much did this person pay towards Medicare in this pay period only?
a)
5.8
b)
24.8
c)
44.5
d)
52.2
17.
Question #3 of 3: How frequently is this employee paid?
a)
Daily
b)
Every other week
c)
Weekly
d)
Monthly
18.
Your friend Laila is talking to you about the benefits of tax filing websites. Which of the following is true?
a)
Filing your taxes using a website is always free of charge
b)
You are guaranteed a higher refund than if you were to use a paper form or hire a professional
c)
If you owe money to the IRS, you receive a discount if you e-file use a tax filing website
d)
You can avoid the costs of having to pay a professional, though you may have to pay for e-filing online
19.
Jessica is 16 years old and earned $1,100 through her photography side gig. Her parents can claim her as a dependent on their tax return. All of the following statements are true EXCEPT…
a)
Jessica is required to file an income tax return
b)
Jessica should expect to receive a W-2 in January
c)
Jessica is required to pay a 15.3% self-employment tax
d)
Jessica can file her own tax return even though her parents are claiming her as a dependent
20.
Which of the following describes what a "dependent" is for tax purposes?
a)
A child or adult that you support financially
b)
Someone who is temporarily disabled
c)
An adult who financially supports you
d)
Someone who is a full-time student under the age of 30
21.
If a taxpayer fills out their W-4 in a way that does not withhold enough money to cover their tax obligation, what is the most likely outcome after they file their taxes?
a)
They will receive a refund
b)
They will owe a payment to the IRS
c)
They will be audited
d)
They will be charged with tax evasion
22.
Which of the following statements about the W-2 form is TRUE?
a)
A W-2 lists all the money you earned in cash over the last year
b)
The total wages you earned from ALL jobs you worked in the previous year appear on ONE W-2 form
c)
You need a separate W-2 form from EACH of your employers in order to file your taxes
d)
The W-2 includes information about the interest you earned from your investments
23.
Akshay worked at a cafe while he was a college senior in Boston, Massachusetts. After graduating in June, he moved back to his home in California and started a full-time job in September. Which of the following statements is true?
a)
Akshay will need to file only a federal tax return
b)
Akshay will need to file a federal tax return and a state tax return for Massachusetts
c)
Akshay will need to file a federal tax return and a state tax return for both Massachusetts and California
d)
Akshay will need to file a federal tax return this year and file state returns the following year
24.
All of the following people would be required to file a tax return EXCEPT…
a)
Janet, who earned $28,200 but was paid entirely in cash
b)
Max, whose total income from three separate part-time jobs was $9,500
c)
Isaiah, who owns his own business and generated an income of $7,000
d)
Dani, who is a cafe barista and earned $13,000 in wages and $250 in tips
25.
Marquis is starting a fast food job during his senior year of high school. He lives with his parents and they will claim him as a dependent on their taxes this year. He earns $2000. Based on how he completed his W-4, his employer withheld $200 in federal income taxes from his paychecks. What will happen if Marquis doesn't file taxes in April?
a)
The IRS will refund his $200 directly to him
b)
The IRS will refund his $200 to his parents
c)
The IRS will fine Marquis $75 or more for not filing taxes
d)
Nothing will happen, but Marquis will miss out on his potential refund
26.
Juan saved $1,000 from his summer job cleaning pools. Which of these account types would work best for him if he doesn't need access to the money for a number of years AND wants to earn the highest interest rate?
a)
Regular savings account
b)
Money Market account
c)
Checking account
d)
Certificate of Deposit
27.
Which of the following is an effective strategy for personal saving?
a)
Wait until the end of the month and save whatever is left in your checking account
b)
Save a certain percentage of each paycheck and deposit it directly into a savings account
c)
Cover all of your wants and needs and save whatever is left over
d)
Take out a payday loan so you can save before you receive your paycheck
28.
Joelle wants to have an emergency fund to cover 6 months of her expenses. Her monthly gross pay is $4,000 and her monthly expenses are $2,000. If she plans to save 10% of her gross pay each month, how long will it take her to build her emergency fund?
a)
3 months
b)
9 months
c)
24 months
d)
30 months
29.
All of the following statements about bank accounts are true EXCEPT…
a)
If the bank account is FDIC-insured, your money is safe even if the bank fails
b)
Many banks pay interest on the money you deposit into your savings account
c)
Historically, savings accounts earn higher returns than investments in the stock market
d)
Money in a checking account is usually easy to access via ATM, debit card or check
30.
All of the following are reasons to open a checking account EXCEPT…
a)
Prepaid cards typically include a lot of fees
b)
Prepaid cards are a useful option for someone who is unbanked to make online purchases
c)
Prepaid cards are a great way to build credit
d)
Prepaid cards are usually accepted anywhere that debit and credit cards are accepted
31.
You are developing a savings plan and using short-, medium-, and long-term goals to motivate you. Which represents possible goals from short-term to long-term? Save for…
a)
Retirement, a house down payment, college tuition
b)
A new cell phone, college tuition, a house down payment
c)
A new cell phone, dinner with friends this weekend, a new bike
d)
Retirement, college tuition, a vacation
32.
Fill in the blanks with the correct responses. If you follow the 50-30-20 rule of budgeting, you'll be putting 50% of your monthly income toward _______________, 30% of your monthly income toward _____________, and 20% of your monthly income toward ______________.
a)
Needs, wants, savings
b)
Savings, needs, wants
c)
Needs, savings, wants
d)
Wants, needs, savings
33.
Which represents the BEST time to start saving for your retirement?
a)
As soon as you have your first full-time job
b)
Right after you pay off your student loans
c)
Once you are debt-free, including paying off all credit cards, auto loans, and your mortgage
d)
At age 45, so you have exactly 20 years until retirement
34.
Which of the following statements is TRUE?
a)
The majority of Americans have an adequate emergency fund
b)
The majority of Americans have sufficient amounts of money saved for retirement
c)
The majority of Americans have an adequate emergency fund, but do NOT have sufficient amounts of money saved for retirement
d)
The majority of Americans do NOT have an adequate emergency fund or sufficient amounts of money saved for retirement
35.
Experts recommend that you accumulate enough to cover 3 to 6 __________________ of expenses in your emergency fund.
a)
Days
b)
Weeks
c)
Months
d)
Years
36.
Which of these lists ranks the savings options from highest expected interest rate to lowest expected interest rate?
a)
Online savings account, 5-year CD, Savings account at traditional bank, 10-year CD
b)
Savings account at traditional bank, online savings account, 5-year CD, 10-year CD
c)
Savings account at traditional bank, online savings account, 10-year CD, 5-year CD
d)
10-year CD, 5-year CD, Online savings account, Savings account at traditional bank
37.
Three of these statements best describe a checking account. Which statement best describes a savings account?
a)
This account offers a convenient way to pay bills and access cash from an ATM
b)
This account pays you interest on money you have put away for later to help your money grow
c)
This account is automatically debited when you use a debit card
d)
This account typically allows an unlimited number of transactions per month
38.
You overhear your Aunt Tina tell your mom that she, her husband, and their kids are "living paycheck to paycheck." What does Aunt Tina mean by that?
a)
Aunt Tina gets a paycheck one month, and her husband gets a paycheck the next month; they alternate pay periods
b)
Aunt Tina and her family don't have any money saved, and their paychecks are just barely covering monthly expenses
c)
Aunt Tina and her family have high paying jobs and don’t worry much about money
d)
Aunt Tina only receives paper paychecks instead of direct deposit
39.
You are at the checkout counter at the local supermarket and use your debit card to pay for your groceries. Where does the money for this purchase come from?
a)
Your credit card company covers the cost
b)
It is deducted directly from your checking account
c)
Your credit card company provides you with a cash advance to cover the cost
d)
It is deducted directly from your savings account
40.
Fill in the blanks: If inflation is _____________ your savings account interest rate then you will be ______________ purchasing power.
a)
Higher than, gaining
b)
Higher than, losing
c)
Equal to, gaining
d)
Lower than, losing
41.
Jocelyn gets a text alert from the bank that her account balance has dropped below $100 after a series of $20 ATM withdrawals. She has not used her ATM in over a week and wonders what she should do. What would you recommend?
a)
Wait until her monthly statement arrives so she can check to see if those withdrawals are still there
b)
Wait a week as it is fairly common for the bank to catch mistakes like this
c)
Check her wallet to be sure her debit card has not been stolen. If she still has it, then she should not worry.
d)
Contact her bank immediately as it appears that her account may have been hacked
42.
Which of the following transactions will REDUCE your checking account balance immediately?
a)
Writing your monthly rent check which you will mail tomorrow
b)
Using your debit card to pay for groceries at the supermarket
c)
Using your credit card to pay for your school books
d)
Depositing a check at a local bank branch
43.
Which of the following statements is an advantage of online banking?
a)
Once you set up online banking, your bank will waive overdraft, ATM, and monthly fees
b)
Using online banking allows you to earn a higher interest rate
c)
Using online banking, you can request transfers, pay bills and automate your savings without visiting the bank branch
d)
You can only shop online if your bank account has online banking features
44.
FDIC Insurance is...
a)
Optional coverage consumers can purchase so that their bank deposits remain safe
b)
Insurance bank branches can buy to protect their business against fraud and scams
c)
Required if you want to do online or mobile banking
d)
Protection for bank customers’ deposits up to $250,000, guaranteeing their money is still available if the bank goes out of business
45.
When signing up for a new checking account, you answer "Yes" to receive overdraft protection. On this day, you have $10 in your account and go out and use your debit card to buy lunch for $12, a movie ticket for $12 and dinner for $15. What is likely to be the outcome resulting from these transactions?
a)
Your account will be closed
b)
You will likely be charged an overdraft fee for one or more of the transactions and also will need to repay the bank for the amount overdrawn
c)
Since you requested overdraft protection, the bank will not allow you to overdraw your account so your debit card will be denied
d)
The bank will provide you five days to add funds to your account to cover the overdraft and no fees will be assessed
46.
How often do customers typically receive a bank statement for their checking account?
a)
Daily
b)
Weekly
c)
Monthly
d)
Annually
47.
When signing up for a new checking account you answer "No" and opt out of overdraft protection. On this day, you have $10 in your account and go out and use your debit card to buy lunch for $12, a movie ticket for $12 and dinner for $15. What is likely to be the outcome resulting from these transactions?
a)
Your account will be closed
b)
You will likely be charged an overdraft fee for one or more of the transactions and also will need to repay the bank for the amount overdrawn
c)
Since you declined overdraft protection, the bank will not allow you to overdraw your account so your debit card will be denied
d)
The bank will provide you five days to add funds to your account to cover the overdraft and no fees will be assessed
48.
Fill in the blanks: Direct deposit typically refers to your ______ sending your ______ electronically to your bank account.
a)
employer, bills
b)
employer, paycheck
c)
parents, allowance
d)
state government, taxes
49.
How does investing in the stock market differ from putting money in a savings account at a bank?
a)
Investing is always a less risky option than saving
b)
Investing is best for short-term situations like emergency funds; saving is best for the long-term
c)
Investing typically earns between 1-2% while saving generally earns between 5-7%
d)
Investing allows you to accumulate wealth for retirement while saving is best for short-term purchases or emergencies
50.
Which of the following statements is TRUE about compound interest?
a)
Compound interest is difficult to calculate, so those who use it earn higher profits for their efforts
b)
Compound interest means you have a fund manager who is compounding your returns without charging a fee
c)
Compound interest allows you to earn interest not only on the amount you have saved, but also on the interest you've already earned
d)
Compound interest directly impacts how much you will be charged in fees
51.
What kinds of behaviors can PREVENT people from making smart investing decisions?
a)
Staying calm when the market is experiencing a downturn
b)
Buying stocks when prices are low and selling them when they’re high
c)
Exiting the market because that’s what everyone else is doing
d)
Investing in a diversified portfolio instead of trying to beat the market
52.
Daniel has saved $2,000 in a savings account that earns 0.5% interest annually. What will most likely happen to the purchasing power of his savings over time?
a)
His purchasing power will DECREASE because the interest rate is lower than the historical rate of inflation
b)
His purchasing power will INCREASE because the interest rate is higher than the historical rate of inflation
c)
His purchasing power will INCREASE because the interest will compound faster than the historical rate of inflation
d)
His purchasing power will remain the SAME because the interest rate is the same as the historical rate of inflation
53.
Which of the following accurately describes a difference between an individual bond compared to a bond fund?
a)
A bond pays you dividends while a bond fund pays you regular interest
b)
A bond guarantees you a higher rate of return than a bond fund
c)
A bond is issued by a company while bond funds only invest in government bonds
d)
A bond is considered to be a less diversified investment than a bond fund
54.
Which of the following statements about Exchange Traded Funds (ETFs) is TRUE?
a)
ETFs are traded once a day after the market closes
b)
An ETF is a single stock that you can buy in the stock market
c)
Actively managed ETFs have very low fees
d)
ETF prices can change throughout the day as they are exchanged on the market
55.
You bought 10 shares of stock in StreamingVideoCo for $45 per share. Two months later you sold the 10 shares of stock for $80 per share. What was your profit or loss on StreamingVideoCo stock? (Assume that StreamingVideoCo didn't pay a dividend and that you didn't incur any trading fees during that period.)
a)
Loss of $800
b)
Profit of $350
c)
Loss of $450
d)
Profit of $800
56.
Which of the statements below BEST describes the relationship between risk and return when considering an investment?
a)
Investors expect to earn a lower return when they invest in a high risk asset
b)
Investors expect to earn a higher return when they invest in a low risk asset
c)
Investors expect to earn a higher return when they invest in a high risk asset
d)
Investors expect to earn zero return when investing in a low risk asset
57.
Why is diversification a recommended investment strategy?
a)
Investing in a diversified portfolio guarantees that you won’t lose money with your investments
b)
If you tell your fund manager to use diversification, they’ll charge you lower fees
c)
Diversifying your portfolio helps reduce risk
d)
If you diversify your portfolio, you will definitely earn a high return
58.
How is a bond different from a stock?
a)
A bond is a loan you give to an organization while a stock is partial ownership in a company
b)
Bonds are typically riskier than stocks but have the potential to earn higher returns
c)
Bonds are usually issued by smaller startup companies while stocks are issued by well established organizations
d)
Bonds are best for earning high returns while stocks are best for providing a stable source of income
59.
An actively managed mutual fund…
a)
Generally has lower fees than a passively managed index fund
b)
Is managed by a fund manager who charges a fee
c)
Always performs better than an index fund
d)
Is a mix of two types of stocks and two types of bonds to diversify your portfolio
60.
How can someone make money from investing in a stock?
a)
They sell the stock for a lower price than what they bought it for
b)
They receive dividends or they sell the stock at a higher price than what they bought it for
c)
The stock loses value but the overall market experiences a positive return
d)
They sell the stock for the same price they bought it for
61.
What is a brokerage account used for?
a)
It’s an online portal that allows you to set up appointments with a fund manager
b)
It’s the account you use to pay any taxes you owe on money you earned on your investments
c)
It’s a type of account used to buy and sell stocks, bonds, and funds
d)
It’s a special type of 401(k) plan that only some employers offer
62.
Why is it important for you to understand your risk tolerance before you start investing?
a)
It helps you decide if you want to participate in your employer’s match program for your 401(k)
b)
It’s recommended that people with a low risk tolerance shouldn’t invest at all
c)
If you have a high risk tolerance, you may be eligible for lower fees since you won’t care if your portfolio drastically loses value
d)
You should tailor your investment portfolio so that it assumes an amount of risk you are comfortable with
63.
Katrina works for Penny's Pickles, which offers a 401(k) match for up to 3% of her salary, which is $65,000 per year. In her budget, she only has $150 per month available to save for retirement. What should she do?
a)
Opt out of the 401(k) plan since she doesn’t have much to contribute; use the money elsewhere in her budget
b)
Contribute $75/mo to her 401(k) and $75/mo to an IRA, so that she's diversified
c)
Save the $150/mo in a bank account until she has enough to max out her 401(k), and then invest
d)
Contribute the full $150/mo to the 401(k) because her company will match that full amount, "doubling" her investment every month
64.
Sam is 22, just started his first full-time job, and is selecting his investments through his company's 401(k) plan. Why might a target date fund (TDF) be a good option for Sam?
a)
A TDF is actively managed by a fund manager but comes with low fees
b)
A TDF buys a single stock and bond so that beginner investors can practice day trading
c)
A TDF is insured by the federal government, so Sam's money is protected even if the fund performs poorly
d)
A TDF will automatically adjust his asset allocation based on the retirement year he has chosen
65.
What is one question an investor should ask when deciding whether or not they would like to open a Roth IRA or a Traditional IRA?
a)
Do I want to make a guaranteed return of 6% or 8%?
b)
Do I want to pay taxes now or later?
c)
Do I want to take advantage of my employer’s matching contribution?
d)
Do I want to take on more or less risk?
66.
Nancy is new to investing and is eager to get started. All of the following are things she should do EXCEPT...
a)
Invest in a low cost index fund
b)
Estimate how much she will need for retirement to determine how much she needs to invest each month
c)
Pick individual stocks to see if she can beat the market
d)
Invest in a diversified portfolio
67.
Sanjana is explaining what Social Security is to her younger brother. Which of the following descriptions should she use?
a)
Social Security is a type of retirement savings plan that you can open through a brokerage firm
b)
Social Security is a government program that pools contributions from current workers to fund retirement support benefits to those who are eligible
c)
Social Security is a type of retirement savings plan offered by some employers
d)
Social security is a government mandate that requires employers to offer their employees a 401(k) or pension plan
68.
As a shareholder in a public company, what are the benefits available to you?
a)
You may receive dividends from the company, if the company pays them, and you have ownership of a portion of the company
b)
You must receive dividends from the company (all companies must pay them) and you can select members of the management team (e.g., the Chief Executive Officer (CEO))
c)
You can select members of the management team [e.g., the Chief Executive Officer (CEO)] and vote for members of the Board of Directors
d)
You have ownership of a portion of the company and receive coupon payments from the issuer
69.
Why are Index Funds such a popular investing option?
a)
They are a mix of 2-3 individual stocks that can help you diversify your portfolio
b)
They provide a low-cost, diversified investment option that closely matches the overall return of a given index, such as the S&P 500
c)
They are actively managed by a fund manager
d)
They are managed by robo-advisors that guarantee higher returns than the overall stock market
70.
You buy a bond with a fixed coupon rate of 5%. A year later, similar bonds that are issued have a coupon rate of 3%. Which of the following is TRUE?
a)
The price of your bond will increase
b)
The demand for your bond will decrease
c)
The price of your bond will stay the same
d)
The interest rate for your bond will fall to 3%
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