WorksheetsPersonal Finance Final Review
Total questions: 100
Worksheet time: 2hrs 40mins
What is financial literacy?
A set of goals for acquiring, saving, and spending money.
The ability to understand basic topics related to finance, such as making, spending, and saving money.
A plentiful supply of money or valuable goods.
Having enough money for your basic needs and modest wants without work being a necessity.
Having a _____ helps you be in control of your fi nancial situation and achieve your goals.
priority
net worth
financial independence
financial plan
Planning to save enough money to go on a nice vacation is an example of a(n) _____.
need
investment
financial goal
wealth
Which of the following is an example of a short-term financial goal?
I want to buy a house in ten years.
I want to save as much money as possible.
I want to buy a guitar in six months.
I want to retire at 50.
Which of the following is an example of a long-term financial goal?
I want to spend next week’s allowance at the mall.
I want to save as much money as possible.
I want to buy a guitar in six months.
I want to save $4,000 before starting college in two years.
Which of the following is a need?
Shelter
Designer Clothes
Television
Smartphone
What is a want?
Something essential for living.
An expense.
Something important to an individual.
Something someone would like to have but does not need to live.
A _____ is a value or goal that is given more importance than other values or goals.
short-term goal
long-term goal
priority
trade-off
What is wealth?
The difference between what is owned and what is owed.
A plentiful supply of money or valuable goods.
The value of the option you give up when you make one choice over another.
When a certain value or goal is given more importance than other values or goals.
Net worth is the difference between _____ and _____.
assets, wealth
priorities, assets
assets, liabilities
liabilities, wealth
What is gross pay?
The amount paid for working time in a week beyond the standard 40-hour workweek.
The total amount of earnings minus payroll deductions.
The total amount of earnings.
A dollar amount paid per hour worked.
Most employers pay an overtime rate after you have worked _____ regular hours in a week.
30
35
40
45
Which of the following is an example of a mandatory deduction?
state income tax
insurance premiums
charitable contributions
retirement contributions
What is Social Security?
Behaving with sensitivity to social, environmental, and economic issues.
A federal program that pays for certain healthcare expenses for older citizens and those with disabilities.
Income provided by the US government for working time in a week that is beyond the standard 40-hour workweek.
A social insurance program operated by the US government that provides income for individuals whose earnings are reduced or stopped because of retirement, disability, or death.
Net pay is also known as _____.
overtime pay
take-home pay
Social Security wages
Medicare wages
Taxes on income collected by the US government are _____ income taxes.
federal
state
local
voluntary
Which of the following is an example of a voluntary deduction?
local income tax
state income tax
FICA taxes
insurance premiums
A personal investment account set up for use when a person is older and no longer employed is a(n) _____.
insurance premium
retirement account
direct deposit
allowance
A(n) _____ is a donation of money or gifts to a nonprofit organization.
charitable contribution
gratuity
allowance
tip
A(n) _____ is a service or item of value employees receive from employers in addition to earnings.
overtime wage
employee benefit
deduction
contribution
You can track expected income and expenses for a given period using a(n) _____.
financial goal
investment
budget
deficit
Your _____ will guide you as you create your budget.
goals
age
disposable income
spending
Money you receive for working at a job is an example of _____.
income
an expense
discretionary income
a financial goal
You paid $16.50 for a haircut. This amount represents a(n) _____.
income
expense
goal
charge
Last week, you paid $4.50 for lunch on Monday, $3.00 for lunch on Tuesday, and $2.75 for lunch on Wednesday. The amounts you paid for lunch are _____.
fixed expenses
variable expenses
discretionary expenses
discretionary income
You take weekly music lessons that cost $15 per week. This is an example of a(n) _____.
fixed expense
variable expense
voluntary expense
income
What does the phrase “pay yourself first” mean?
Set aside money for all your wants in your budget.
Write yourself a check for spending money every week.
Set aside money to save as part of your budget.
Set aside money after all expenses are met.
How is discretionary income calculated?
income – fixed and variable expenses = discretionary income
income – fixed expenses = discretionary income
fixed and variable expenses – income = discretionary income
fixed expenses – variable expenses = discretionary income
What is the first step when creating a budget?
Subtract the total expenses from the total income.
List the amounts of income and total them.
List the fixed and variable expenses.
Select a time period for the budget.
When should you update your budget?
When income increases.
When income decreases.
When expenses change.
All of the above.
Which type of financial institution is not insured by the FDIC?
bank
credit union
savings and loan association (S&L)
automated teller machine (ATM)
An asset that can easily be converted to cash without losing value is said to be _____.
valid
insured
liquid
endorsed
A(n) _____ is a written order for the bank to pay a specific amount to the person to whom it is written.
endorsement
debit
overdraft
check
The transfer of funds using the Internet instead of paper checks or cash is called _____ banking.
electronic
debit
endorsed
checking
A payee is the person, business, or organization _____.
who endorses a check
who signs a check
to whom a check is written
who cashes a check
A check written for an amount greater than the balance of the account is called a(n) _____.
overdraft
post-dated check
canceled check
outstanding check
A check with a date that is in the future is called a(n) _____.
overdraft
post-dated check
canceled check
outstanding check
A check that has not yet been returned to the bank for payment is a(n) _____.
overdraft
post-dated check
canceled check
outstanding check
What is the record of your checking account deposits, withdrawals, online payments, transfers, checks, fees, and interest called?
bank reconciliation
bank statement
checking account
check register
Which of the following is not a use of a debit card?
Make a purchase in a retail store with money that is immediately taken out of your account.
Withdraw cash at an ATM.
Make a purchase online with money that is immediately taken out of your account.
Make a purchase in a retail store with money that is borrowed and will be repaid later.
Which of the following is not true of saving money?
Money you save today could be worth more in the future.
Money you put in a regular savings account accumulates interest.
Money you save should not be part of your financial plan.
Money you save can be used to start an emergency fund.
Of the accounts listed, which type usually pays the lowest interest rate?
overdraft account
regular savings account
certificate of deposit (CD)
money market account (MMA)
You might incur a penalty by withdrawing money before the maturity date from which of the following accounts?
certificate of deposit (CD)
checking account
regular savings account
money market account (MMA)
For which type of account do you agree to leave your money on deposit for a certain period of time?
checking account
regular savings account
certificate of deposit (CD)
money market account (MMA)
Of the accounts listed, which type usually requires a large minimum balance and grants check-writing privileges?
checking account
regular savings account
money market account (MMA)
certificate of deposit (CD)
What is the time value of money?
The idea that money increases in value over time.
The idea that money decreases in value over time.
Interest is paid only on the original amount deposited.
Interest is paid on the principal plus the interest already earned.
The original amount initially deposited into a savings account is the _____.
certificate of deposit
interest
emergency fund
principal
What is the actual percentage earned when compounding is added to the equation?
Rule of 72
annual percentage yield (APY)
simple interest
principal
Which of the following time periods will earn the highest annual percentage yield?
yearly
quarterly
monthly
daily
To figure approximately how many years it will take for your savings account balance to double, you would use _____.
simple interest
the Rule of 72
compound interest
annual percentage yield (APY)
A _____ is someone who signs for you to be able to get credit.
character
credit bureau
lender
cosigner
Identify the three Cs of credit.
character, capacity, capital
capacity, capital, credit score
capital, credit score, character
capital, character, cosigner
Assume you have $20 to spend this weekend. You want to go to an amusement park that costs $15 to enter. You also want to go to a movie, for which a ticket costs $10. You choose to go to the amusement park and give up seeing the movie. In this scenario, the _____ is the trade-off and _____ is the opportunity cost.
amusement park $15
movie $10
amusement park $10
$10 movie
Which document is a record of a person’s credit history?
convenience check
credit report
credit card statement
credit score
What is a credit score?
A person’s ability to pay debts.
A person’s willingness to repay debts.
A person’s assets minus liabilities.
A numerical measure of a person’s creditworthiness.
The amount of credit you have left before you reach your credit limit is your _____.
minimum payment
available credit
annual percentage rate (APR)
cash advance
What is important to consider when selecting a credit card?
credit terms
cost of credit
grace period
All of the above.
What is the first step in the decision-making process?
Choose the best option.
Gather information.
Define the decision to be made.
Act on the decision.
Which type of credit agreement offers a choice of paying in full each month or making payments over a period of time?
cash advance
revolving credit
proprietary credit
available credit
Which document provides a summary of all the activity on a credit card?
credit application
comparison-shopping statement
credit card statement
credit report
Which of the following is not a type of property insurance?
homeowners insurance
health insurance
renters insurance
car insurance
The amount you must pay for a loss before your insurance pays is a _____.
deductible
liability
premium
comprehensive
Car insurance that pays for damage to your car in an accident is called _____ coverage.
liability
collision
comprehensive
premium
Car insurance that pays for damage if your car is stolen is called _____ coverage.
liability coverage
collision
comprehensive
premium
If you damage someone’s fence while driving, which type of insurance covers you?
homeowners insurance
collision coverage
comprehensive coverage
liability coverage
Insurance that pays benefits to replace part of your income if you are unable to work because of illness or accident is _____ insurance.
health
disability
comprehensive
liability
The face value of a life insurance policy is the same as the _____.
death benefit
premiums
beneficiary
cash value
Which type of life insurance covers you for a set period of time?
whole life insurance
variable life insurance
term life insurance
universal life insurance
In a life insurance policy, more than one _____ may be named.
beneficiary
risk
face value
term
Which type of insurance can help defray the costs of living in a nursing home?
term life
renters
disease
long-term care
What can you do to help match your skills and interests with a career?
Take an aptitude test.
Take a career-assessment test.
Talk with a counselor.
All the above.
Which academic degree typically takes four years to complete?
associate degree
bachelor degree
master degree
vocational degree
Which type of postsecondary institution is supported by the government and offers associate degrees?
trade school
vocational school
community college
proprietary school
Schools that focus more on skills than academics are called _____.
trade schools
vocational schools
technical colleges
All the above.
Which of the following statements is true of ROTC?
The program is offered at many high schools.
The program provides leadership training for commissioned officers.
The program is not available at colleges.
The program does not offer education or training.
Money given to fund a student’s education based on financial need, merit, or an accomplishment is _____.
a grant
financial aid
a 529 plan
a scholarship
Which of the following is true of educational grants?
Grants do not have to be repaid.
Grants have to be repaid.
Grants are provided only by governmental agencies.
Grants are not provided by governmental agencies.
A _____ is a financial award available for students who meet certain economic requirements.
student loan
grant
work-study program
need-based award
Money borrowed to pay for postsecondary educational expenses with a rate of interest subsidized by the government is a _____.
student loan
grant
work-study program
need-based award
What is professional development?
Learning new skills related to your personal interests.
Improving or gaining new skills related to work.
Any education received after high school.
Part-time jobs on a college campus held by students to finance their education.
_____ is the gradual decrease in the value of an asset.
Repossession
Foreclosure
Appreciation
Depreciation
Which type of loan is backed by something of value?
PMI loan
unsecured loan
secured loan
underwater loan
A car loan is an example of a(n) _____.
unsecured loan
mortgage
lease
installment loan
Owing more on an asset than it is worth is called being _____.
underwater
in equity
in assessment
in foreclosure
When you lease a car, you are the _____ and the car dealer is the _____.
renter, cosigner
lessor, lessee
lessee, lessor
cosigner, lessee
A loan obtained when you purchase a home and use the home as collateral is a(n) _____.
unsecured loan
foreclosure
mortgage
assessment
What is the difference between what you owe on your home and the balance of the mortgage on the home?
equity
assessment
collateral
escrow
When a bank takes possession of a home because the borrower has failed to make loan payments, it is called _____.
being underwater
a mortgage
an assessment
a foreclosure
A(n) _____ account is used for holding money in a trust for others.
mortgage
assessment
escrow
foreclosure
Which type of mortgage allows the interest rate to change?
fixed-rate mortgage
adjustable-rate mortgage
underwater mortgage
collateral mortgage
What is investing?
Buying a financial product or valuable item with the goal of increasing your wealth over time.
Receiving a share of a company’s profits.
Spreading risk by putting money in different types of accounts.
Depositing a fixed dollar amount at regular intervals without regard to the price at the time of the investment.
Spreading out risk in your investments is called _____.
fluctuation
investing
dollar-cost averaging
diversification
A share of the ownership of a company is a _____.
principal
dividend
stock
bond
Stock that pays a regular dividend is called _____.
bull stock
bear stock
common stock
preferred stock
A(n) _____ is an upward trend in the stock market.
fluctuation
bear market
recession
expansion
A company that issues a _____ divides its existing shares of stocks into multiple shares without changing the total value of the stock.
dividend
rate of return
stock split
diversification
A period of slow economic growth is called a(an) _____.
recession
bull market
expansion
diversification
Which type of bond is sold by cities or towns?
US savings bond
corporate bond
coupon bond
municipal bond
What is a mutual fund?
A type of US government bond that earns a fixed rate of interest.
A collection of investments that is professionally managed.
A certificate of debt issued by a government or company.
A collection of investments a person has made.
When is an ideal time to begin investing?
After you retire.
During your teen years.
When you have a lot of money “left over” at the end of the month
When you begin your career.
