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WorksheetsPersonal Finance Final Exam
Total questions: 125
Worksheet time: 1hrs 3mins
Name
Class
Date
1.
A credit card offer comes in the mail with the bold print "0% A.P.R. for New Accounts." Which important piece of information should you find before thinking about signing up?
a)
Can I get two or more cards with this offer?
b)
Can I pay my credit card bill online?
c)
What is the A.P.R. after the introductory period?
d)
What kind of designs can I get on my card?
2.
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?
a)
When given a range of A.P.R.s like this, you can assume most cardholders pay the lowest rate listed
b)
One of the primary factors determining your card's A.P.R. is your credit score
c)
With credit card A.P.R.s, cardholders like higher A.P.R.s because they earn more
d)
The A.P.R. on credit cards is usually fixed so they won't be adjusted as long as you are a cardholder
3.
If you are trying to substantially reduce the amount you spend on food, you should try...
a)
Cooking your own food at home for as many meals as possible
b)
Dining at restaurants more often so you don't waste water doing dishes
c)
Eating way more snacks on the go and way fewer meals at home
d)
Drinking more coffee and soda so you are not as hungry for food
4.
You are putting together your first post-graduation budget. Your take-home pay will be $2,500 per month. You estimate your monthly costs to be rent of $800, car payment of $350, car insurance of $150, car maintenance of $50, entertainment of $500, food expense of $250, mobile phone of $75, student loan payment of $225 and other expense of $300. How would you describe your budget after analyzing all of your income and expenses?
a)
You have a surplus of $200
b)
You have a deficit of $200
c)
You have a deficit of $2,700
d)
You have a surplus of $5,200
5.
Which of the following scenarios BEST demonstrates FOMO (Fear of Missing Out)?
a)
Megan takes a baking class after seeing a sign for the class at her favorite bakery
b)
David goes on a vacation to Europe and posts about it on social media every day
c)
Angela sees an advertisement for a pair of shoes and decides to buy them
d)
José wants to go see a movie that all of his friends have seen and are raving about
6.
Research done on peoples' salaries and happiness levels has shown that...
a)
Most people are satisfied with their current annual salaries
b)
Increasing your annual salary is guaranteed to increase your long-term happiness
c)
Humans typically become accustomed to how much they earn and eventually want more
d)
Most people need to earn at least $200,000 a year in order to be happy
7.
Which of the following best describes what a cognitive bias is?
a)
A rational decision that is based on research and facts
b)
The belief that a person should change their opinions when new facts arise
c)
the belief that we are right until someone provides information that contradicts our belief
d)
A strong, preconceived notion that people have that is based on incomplete information
8.
Janet has a snowboard she doesn’t use anymore, but loss aversion has made her question whether or not she should sell it. Her friend Jack suggests she use the Overnight Test. Which of the following scenarios demonstrates the strategy she’s using?
a)
Imagine the snowboard was replaced with cash, then make a plan about how to spend the cash.
b)
Imagine the snowboard was replaced with cash, then figure out how to keep the cash and get her snowboard back.
c)
Imagine the snowboard was replaced with cash, then decide if she's happier with the cash or the snowboard.
d)
Imagine the snowboard was replaced with cash, then figure out how to use the cash to get her snowboard back.
9.
Sebastian began day trading stocks at the beginning of the summer. After a month, he made a profit of $200. Due to his short term success and his belief that he is a highly skilled trader, Sebastian puts his entire savings into the market. This is an example of
a)
Overconfidence Bias
b)
The Fear of Missing Out (FOMO)
c)
Confirmation Bias
d)
The Endowment Effect
10.
Imagine two scenarios: 1) You see a rare sports card being sold for $500 in a store but choose not to buy it because you think it’s too expensive. 2) You find a rare sports card worth $500 in your parents’ attic. Rather than sell it, you choose to put it in a case and display it in your room. In scenario 1, you are putting more value on your $500 than the card. In scenario 2, you are putting more value on your card than the $500. This is an example of what?
a)
Fear of missing out
b)
Overconfidence
c)
Endowment effect
d)
Confirmation bias
11.
Michael observed he felt the pain of losing a $20 bill more than he felt the joy of finding it on the sidewalk the week before. This is a result of...
a)
Endowment effect
b)
Loss aversion
c)
Sunk cost
d)
Overconfidence
12.
How has social media marketing evolved over the past few decades?
a)
Modern marketing urges you to make financial decisions that align with your goals
b)
Modern marketing utilizes extremely detailed user data to create personalized ads for each user
c)
Modern marketing makes it easy to distinguish advertising from other types of content
d)
Modern marketing creates a less seamless shopping experience for consumers
13.
All of the following are types of overconfidence bias EXCEPT...
a)
Overplacement
b)
Overestimation
c)
Overprecision
d)
Overgeneralization
14.
Unlike traditional economics, behavioral economics believes that
a)
People behave in a rational way when making economic decisions
b)
People do not always behave in a rational way when making economic decisions
c)
There is no way to predict how people will make economic decisions
d)
People will always update their viewpoints based on new information
15.
Investments of time, effort, and money that cannot be recovered are...
a)
Opportunity costs
b)
Sunk costs
c)
Relevant costs
d)
Avoidable costs
16.
A website tells you, "Only one left!" while shopping online. Which loss aversion strategy is this website using?
a)
Coupons
b)
Scarcity and urgency
c)
Buy now, get free shipping
d)
Free trials and samples
17.
You spend an entire Saturday going to car dealerships in search of a used car. You spend hours looking at cars and even test drive a few, but there are none you like that fit your budget. What is the sunk cost you should ignore when deciding whether or not to buy a car that day?
a)
The cost of the car
b)
The cost of the warranty
c)
The time it will take to drive home
d)
The time you spent looking for cars that day
18.
You are doing research on a new electric car that you are interested in buying. You only visit the car company’s website and an online message board of electric car enthusiasts to do your research. This strategy may lead to …
a)
Herd Mentality
b)
The Endowment Effect
c)
Confirmation Bias
d)
Loss Aversion
19.
An "experiential purchase" is...
a)
Something that commemorates an experience, like a souvenir
b)
Something that creates or enhances an experience or connects us with other people
c)
Something that was made by hand rather than at a factory
d)
Something that has a lot of monetary value
20.
Herd mentality may explain why...
a)
Davona chose to skip dinner with her friends and watched a movie at home instead
b)
Mason went to see a movie with his friends even though he didn't like the genre
c)
Ginnifer decided to keep her current phone even though her closest friends bought the new version
d)
Akshay bought a shirt he liked from an unpopular brand
21.
Imani attends a town hall meeting where a tax increase is proposed to help pay for a new bridge. After the meeting, she reads Facebook comments that complain about the already high taxes in her town, which is a view that she agrees with. To avoid confirmation bias, Imani should…
a)
avoid social media since it will influence her decision
b)
seek out comments that supports the tax increase and the bridge project to provide an alternative viewpoint
c)
allow others to make the decision because she is too biased
d)
join a Facebook group that organizes citizens that are opposed to the tax increase
22.
Due to hedonic adaptation, what do you expect would happen to Anu's level of happiness after buying a new jacket?
a)
It would initially increase, then return to a baseline level
b)
It would remain at a baseline level, then increase over time
c)
It would initially decrease, then return to a baseline level
d)
It would remain at a baseline level, then decrease over time
23.
You buy a stock that has a price of $50 per share. A week later the stock's price drops to $25 per share (it's lost half its value). Loss aversion suggests that you are likely to do what?
a)
Buy more shares
b)
Sell the shares
c)
Do nothing
d)
Look for other stocks to buy
24.
People who experience FOMO may...
a)
save a percentage of their paycheck each month
b)
donate money to a cause they care about
c)
go into debt to keep up with everyone else
d)
create and stick to a monthly budget
25.
Your friend gives you a gift. Then, they offer to trade you another item of similar value. According to the endowment effect, most people would keep the item…
a)
They received first
b)
They were offered second
c)
They could sell for the most
d)
They think looks the best
26.
People are compelled to buy MORE stuff for all of the following reasons EXCEPT...
a)
The media portrays that the more stuff we have, the happier we will be
b)
We tend to want more compared to those around us
c)
Scientific research proves that the more items we own, the happier we tend to be
d)
Once the initial novelty of a recent purchase wears off, we look to buy the next new thing
27.
Each of the following statements is an example of confirmation bias EXCEPT...
a)
Interpreting information to support your existing beliefs
b)
Seeking information that challenges your beliefs
c)
Only remembering details that uphold your beliefs
d)
Ignoring information that challenges your beliefs
28.
All of the following explain why humans might "follow the herd" EXCEPT...
a)
People prefer having opinions that are very different from those of others
b)
It can be uncomfortable standing out from the crowd
c)
Humans evolved to stick with the herd to survive
d)
Fighting social pressure can be difficult to do
29.
When using social media, it's important to remember that...
a)
Social media ads are trying to get you to buy stuff you NEED, not want
b)
Marketers have your best interests in mind and want you to be financially responsible
c)
People typically only post about the best parts of their lives on social media
d)
The more likes a post has, the more trustworthy and accurate the information is likely to be
30.
All of the following are options you might pursue directly after high school, EXCEPT...
a)
A master’s degree
b)
A bachelor’s degree from a four-year college
c)
An apprenticeship
d)
A two-year associate degree from a community college
31.
Which of the following statements explains what gross and net pay are on a paystub from your employer?
a)
Gross pay is the total wages you've earned for the pay period, and net pay is smaller because taxes have been removed
b)
Gross pay is the total wages for just this pay period, and net pay is total wages for the entire year to date
c)
Gross pay is the total wages you've earned with any taxes and contributions removed, and net pay is larger to include all your benefits
d)
Gross pay is the total wages you've earned, and net pay is the total amount in taxes you've paid
32.
All of the following are hard skills EXCEPT...
a)
Coding
b)
Accounting
c)
Carpentry
d)
Adaptability
33.
Your friend, Nabila, has a virtual interview tomorrow and is extremely nervous. Nabila should do all of the following things to prepare for her virtual interview EXCEPT…
a)
test all of her technology including internet connection and audio
b)
dress as comfortably as possible; since this is a virtual interview, professional dress is not necessary.
c)
ensure she has a clutter-free background
d)
maintain positive body language during her interview such as good posture and eye contact with the camera
34.
If a college degree is expensive, why is it often considered a good financial decision to go to college?
a)
College graduates always hold higher-paying jobs than high school graduates
b)
College graduates have higher average lifetime earnings than high school graduates
c)
Most people don’t graduate with student debt
d)
After paying tuition, students will have a partial ownership stake in a valuable university
35.
Which statement is TRUE about the job board posting shown here?
a)
The job is for an account specialist to work at Indeed
b)
Whoever is hired can expect to make $110,000 per year
c)
This job has a lot of flexibility on work hours and the ability to work from anywhere
d)
AutoNation will provide this employee with multiple types of insurance in their benefits package
36.
In which scenario would you be MOST likely to use an elevator pitch?
a)
Uploading a recording of yourself to a job board
b)
Introducing yourself to a hiring manager at a community center's career fair
c)
Sending a follow-up email to someone you've formally interviewed with
d)
Greeting anyone you meet while vacationing out of town
37.
All of the following factors influence a career’s earning potential, EXCEPT...
a)
Industry job growth rate
b)
Median salary
c)
Opportunities for advancement
d)
Availability of direct deposit
38.
A best practice when networking on LinkedIn is...
a)
Joining as many groups as possible even if they're outside of your interests
b)
Asking for a big favor from a recent connection
c)
Repeatedly private messaging hiring managers to check on the status of your job application
d)
Including a personalized note when sending an invitation to connect
39.
Which of the following is the best strategy when using online job boards to find a new career?
a)
Attach your resume to every job posting, even when you're not really interested in the job
b)
Set up a profile, set filters on which types of jobs you're looking for, and sign up for alerts
c)
Only check the job boards once or twice a month so you don't get overwhelmed
d)
Either search for specific job titles you desire or specific companies you'd like to work for, but not both
40.
Lilly is working on her first resume and has no previous work experience. What can she do to boost her resume?
a)
Emphasize her education and highlight her strong GPA
b)
Create fictional positions she held in the past
c)
Leave out volunteer experience since it's not paid work
d)
Include a lengthy paragraph at the top of her resume explaining why she has no previous work experience
41.
When signing up for his company's 401(k) plan, Milton will need to decide...
a)
How much to contribute and what fund(s) to invest in
b)
Whether he wants direct deposit and how much taxes to pay
c)
How much to match his employer and which health insurance plan he wants
d)
Whether he should close his savings account and how large his tax return will be
42.
Which of the following is TRUE about cover letters?
a)
The cover letter presents the same information that is on your resume
b)
A cover letter complements your resume by highlighting your interest in the position and what makes you a strong candidate
c)
Cover letters are typically 2-3 pages in length
d)
You can use the same cover letter when applying for multiple jobs
43.
Grayson has a job interview tomorrow. What is the best advice you can give him?
a)
Don't ask questions during the interview since it will show that he may not know something about the company
b)
Be sure to ask about vacation policy and sick leave since he will want to know how many days he can take off
c)
Plan to arrive at least 60 minutes early for the interview
d)
Do research on the company ahead of time to understand how his role will support the larger organization
44.
Gordon is a recent graduate and is looking for his first professional job. He has submitted his resume to many different companies and has had a few job interviews. Unfortunately, Gordon has not yet received a job offer. What is the best piece of advice you can give Gordon to continue his job search?
a)
Continue to practice his interview skills so he’ll feel positive and confident when the next opportunity arises
b)
Take a break from the job search process. It is recommended to take a 6-week break whenever a job is not offered following an interview.
c)
Call and email the companies that did not offer him a job and demand they explain why he did not get the job
d)
Completely redo his resume and cover letter, and resubmit them to the companies that he previously applied to
45.
When is it most appropriate to use the STAR Method to answer an interview question?
a)
When you are asked verification questions to confirm the information on your resume
b)
When you are asked behavioral questions to explain situations when you used specific skills
c)
When you are asked opinion questions to see how you would respond to various scenarios
d)
When you are asked creative questions to assess your problem-solving abilities
46.
Joanna is looking for a new job and wants to improve her LinkedIn profile. All of the following are things she should do EXCEPT...
a)
Update her photo so that it is professional and current
b)
Include vague, generic descriptions for previous job responsibilities
c)
Ask for recommendations from previous coworkers and supervisors
d)
Highlight her soft and hard skills
47.
Which of the following is a TRUE statement regarding employee benefits?
a)
All employers offer the same employee benefits, so there is no need to review benefits when offered a job
b)
Employee benefits always cost you extra money, so it is important to choose only a select few when accepting a job position
c)
It is possible for a job with a lower salary to have a better total compensation package when employee benefits are included
d)
Jobs offering a higher salary always offer better employee benefits
48.
All of the following are good ways to convince your boss you deserve a raise EXCEPT...
a)
You met or exceeded all of your performance targets over the last year
b)
You’ve taken on responsibilities outside of your job description
c)
Your landlord raised your rent and you need more monthly income
d)
You played a key role in advancing a goal of your organization
49.
What is one difference between a resume and a LinkedIn profile?
a)
A resume lists your past work experience while LinkedIn only describes your future goals
b)
A resume includes a professional photo of you while LinkedIn does not have a photo
c)
A resume is tailored for a specific job that you're applying to while LinkedIn can include all of your professional work history
d)
A resume is written in a casual tone while a LinkedIn profile is written in a formal tone
50.
If Colette signs up for direct deposit with her employer, and her friend Georgia does not, what will be the difference in how the two friends are paid?
a)
Colette will be paid more because there are fewer transaction fees with direct deposit
b)
Colette will be paid more quickly because the funds are transferred electronically rather than by cashing a check
c)
Georgia will be paid more because there are fewer transaction fees if you do the check cashing yourself
d)
Georgia will pay slightly higher taxes because the IRS will need to send her a W-2 next year
51.
What is the purpose of an informational interview?
a)
To meet with a hiring manager and submit your job application
b)
To review the terms of a job offer and negotiate
c)
To learn more about an industry or position
d)
To pass the first phone screen after applying to a job
52.
Professional associations and organizations can help a person succeed in their career because...
a)
They are required by law in order to work in certain industries
b)
Your employer has to give you a raise for each professional organization you join
c)
You can meet new people, gain valuable resources, and broaden your professional network
d)
They provide income to supplement your salary from your job
53.
Which of the following would be MOST appropriate to share on LinkedIn?
a)
A picture of a family vacation you went on recently
b)
A review of a movie you saw last night
c)
A blog post written by an expert in the industry you would like to work in
d)
A viral meme that is likely to make your coworkers laugh
54.
Soft skills can be best described as...
a)
Skills that are easy to demonstrate and measure
b)
Skills that highlight a person's ability to work effectively with others
c)
Skills that apply only to a specific position
d)
Skills that are not important to employers
55.
You are interested in renting an apartment for your senior year in college. You meet with the landlord, complete the application, and after checking your credit background and references, the landlord approves your application. In most cases, you will need to provide the landlord with _________ at the time you sign the lease in order to get the apartment.
a)
Rent payment for the first three months
b)
First month's rent and a security deposit
c)
An additional list of references and copies of your last three tax filings
d)
A $500 bonus payment for awarding you the apartment
56.
For most Americans, which budget expense category is largest?
a)
Housing
b)
Food
c)
Transportation
d)
Clothes
57.
You're considering moving into a 4-bedroom apartment with 3 roommates rather than living on your own post-college. Which of your expenses would likely DECREASE by having roommates?
a)
Renters insurance
b)
Cell phone bill
c)
Internet bill
d)
Student loan payment
58.
Which description is most accurate for a Zero-Based Budget?
a)
You put every dollar of your take-home pay into a budget category each month
b)
You spend your checking account balance down to $0 every month
c)
You spend your saving account balance down to $0 every month
d)
You pay every one of your debts down to $0 every month
59.
Bryan is a great cook. As his job, he books gigs cooking customers breakfast or dinner in their own homes on the app Cook You Dinner. Who provides Bryan's health insurance and retirement plan?
a)
Each family he cooks for
b)
The owners of the Cook You Dinner app
c)
The Google and Apple app stores
d)
Bryan has to fund them himself
60.
How is gross pay different than net pay?
a)
Gross pay is for hourly workers, while net pay is for salaried employees
b)
Gross pay is always lower, while net pay is always higher
c)
Gross pay is the total you earned, while net pay has taxes deducted
d)
Gross pay is used for spending, while net pay is used for budgeting
61.
Which one of these expenses most likely represents a VARIABLE cost in someone's budget?
a)
Electricity bill
b)
Rent
c)
Car insurance premium
d)
Student loan payment
62.
What action corresponds to the advice "Pay yourself first?"
a)
Wait until the end of the month to determine how much you have leftover to save
b)
Set aside a fraction of your paycheck into a savings account before you start spending
c)
Spend your regular paycheck on needs and wants but funnel any extra money into saving
d)
Become self-employed so you're paying yourself instead of being paid by an employer
63.
Some people experience great success when using budgeting apps to help them meet their goals. Why might this be the case?
a)
The app store guarantees you'll save money -- if you don't, they'll refund your money
b)
Because users carry their phones almost everywhere, budgeting becomes fast and convenient
c)
Apps are better at doing complex budget calculations than spreadsheets
d)
Most budgeting apps deposit extra funds into your account on a quarterly basis
64.
Lance is at the grocery store and has three options for buying boxed mac and cheese: 1 box for $1.78, a 3-pack for $6, or a 4-pack for $8. Comparing unit costs, which statement is true?
a)
A single box is the best deal
b)
A 3-pack is the best deal
c)
A 4-pack is the best deal
d)
Lance will save the most if he gets one of each -- a single box, a 3-pack, and a 4-pack
65.
One benefit of buying a car vs. leasing is...
a)
You'll have higher monthly payments than a lease
b)
The car will have better safety ratings
c)
You're always protected by a warranty
d)
You can build up trade-in or resale value
66.
While NEEDS and WANTS can vary greatly depending on the individual and their situation, which of these items would most people agree to be a NEED?
a)
Safe, reliable childcare for a single parent so they can go to work
b)
A new cell phone every two years for a college student so they can keep in touch with family
c)
Stylish clothes for a teenager so that they fit in with popular kids at school
d)
Three weeks of vacation for a corporate executive so they can unwind from work
67.
Melvin uses an Envelope Budget and has just received his paycheck. How much cash should he take out?
a)
None -- he is trying to save money!
b)
Enough to cover his fixed expenses
c)
A tiny bit to spend on wants -- he can always return to the ATM if he runs out
d)
Enough to cover his variable expenses
68.
Month after month, Jessica is overspending in her budget and decreasing her savings account balance as a result. Which action would you recommend she take immediately?
a)
Write a new lease so she is paying 25% less in rent each month
b)
Stop paying her credit card bill and put the money into savings
c)
Start packing her lunch from home every day instead of dining out
d)
Quit her job so she an look for one that pays more
69.
The defining characteristic of a job in the gig economy is...
a)
Workers are paid by the federal government
b)
Workers decide how much they want to pay in taxes
c)
Workers receive free phones and wifi connections
d)
Workers complete short-term work for many different clients
70.
Which car loan term will save you the most money?
a)
12 months/$350 a month
b)
24 months/$300 a month
c)
36 months/$200 a month
d)
72 months/$150 a month
71.
Which location is likely to have the HIGHEST cost of living?
a)
A rural area with a population of 6000 people
b)
A college town located 5 hours from the nearest big city
c)
A city thats crime rate is high and population has decreased in the last 3 decades
d)
A thriving city with a growing health care sector, pro sports teams, and good public transportation
72.
If Linus is following a 50/30/20 Budget and takes home $1000 per pay period, how much is he budgeting for his WANTS?
a)
$500
b)
$300
c)
$200
d)
$1000
73.
Sadie is a freelance social media specialist. Companies can hire her to improve their social media presence. Why is it particularly important that Sadie, and other freelancers like her, have an emergency fund?
a)
Freelancers charge a very low hourly rate, so Sadie probably doesn't get paid much
b)
Sadie doesn't have guaranteed work every day, so she needs money in case she goes a while between clients
c)
Sadie will need a large emergency fund in order to make her monthly insurance payments
d)
Sadie's job requires a lot of expensive specialty equipment that will always need replacing
74.
One way the grocery store tricks you into spending more money than you budgeted for is...
a)
Being open early in the morning and late at night
b)
Paying their cashiers and baggers more
c)
Putting high priced items at eye level and lower cost items above or below eye level
d)
Accepting digital and print coupons
75.
When renting an apartment, why is it important to have a written lease?
a)
It is against the law to live somewhere without a lease
b)
A lease clearly states the apartment costs and expectations for living there
c)
Without a lease, a renter won't know how much to budget for rent, food, insurance, or transportation
d)
Signing a lease provides you with free or discounted renters insurance
76.
Which person's income will show an increase in the next pay period?
a)
Ralph, a self-employed furniture maker, who works both weekend days to increase his inventory
b)
Marquis, a marketing manager, who works three hours Thursday night so his presentation the next day is perfect
c)
Chelsea, a city bus driver, who works two extra shifts to cover for a sick coworker
d)
Becca, a tenth grade teacher, who stays after school each day to grade papers
77.
One benefit of buying a USED car is...
a)
Lower acquisition (buying) price
b)
More depreciation
c)
Limited/No warranty
d)
Lower maintenance and gas costs
78.
Which of these credit card payback strategies would result in your paying the HIGHEST amount of interest?
a)
Paying 20% of your credit card balance every month on time
b)
Paying off your credit card bill in full every month
c)
Making the minimum payment (3% of your credit card balance) every month on time
d)
Making the minimum payment (3% of your credit card balance) every month with an occasional late payment
79.
BestBank's Visa credit card discloses an A.P.R. of "Prime Rate + 5.74% to Prime Rate + 22.74%." If the Prime Rate increases from 3.25% to 4.25%, what impact would this have on A.P.Rs for cardholders?
a)
No change since credit card A.P.Rs don't change as long as your account is open
b)
Increase in A.P.R by 1%
c)
Decrease in A.P.R. by 1%
d)
Increase in A.P.R. by 22.74%
80.
Each of the following financial products will help you build credit history EXCEPT:
a)
Secured credit card
b)
Debit card
c)
Home mortgage
d)
Credit card
81.
Based on the Card Statement above, which of the following statements is TRUE?
a)
The cardholder is carrying a balance over from the last period.
b)
The cardholder was charged interest on her balances for the last period because she made her payment on time.
c)
If the cardholder makes her minimum payment of $35.00 by the due date, she will NOT be charged interest on her balances.
d)
If the cardholder pays $523.20 by the due date on the bill, she will pay NO interest to the credit card company.
82.
Based on the Card Statement above, how much credit does this cardholder have available to use?
a)
$0
b)
About $500
c)
About $1600
d)
$2100
83.
Which of the following statements comparing credit and debit cards is TRUE?
a)
Far more businesses accept credit cards than debit cards
b)
Credit cards pull money directly from your bank account, while debit cards get their money from Visa or Mastercard
c)
Credit card companies provide you with a monthly statement, while debit cards do not
d)
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
84.
What statement about credit cards is TRUE?
a)
They can help you establish a credit history
b)
Since they are tied directly to your checking account, they prevent you from spending money you do not have
c)
If you need to carry a balance, the interest rates are generally quite low (less than 5%)
d)
As long as you make the minimum payments it's like getting a short-term interest free loan
85.
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.
a)
Standard credit card
b)
Secured credit card
c)
Overdraft credit card
d)
Rewards credit card
86.
Which of the following statements is TRUE?
a)
If you make the minimum payment on your card by the due date, the credit card company will not charge you interest.
b)
If you pay your balance in full after the due date, the credit card company will not charge you interest.
c)
If you pay your balance in full after the due date, you will be charged interest.
d)
If you pay your balance in full by the due date, you will be charged interest.
87.
You see on a commercial that OrangeCo is offering a credit card with a 5% cashback program for all cardholders. Which question might help you evaluate how good this offer is?
a)
Does the cashback program apply to all purchases or only specific types of purchases like gas and groceries?
b)
Can I get a debit card along with a new credit card?
c)
Who does OrangeCo use as their spokesperson in the commercial?
d)
Do I still get the cash back even when I return my purchases to the store?
88.
Which of these statements best explains why it's often a good idea to pay more than the monthly amount due on an amortized loan?
a)
Every time you pay extra, the lender will reduce the interest rate they're charging by a small amount.
b)
The extra payment will be applied to the principal amount you owe, which will pay down your debt more quickly.
c)
The extra payment will be applied to the interest you owe, which will reduce the overall cost of your loan.
d)
Amortized loans typically have much higher interest rates than credit cards, so they're the best place to put your extra cash.
89.
Choose the option that BEST completes this sentence: Personal loans are called "personal loans" because...
a)
You apply for them in-person, at your own bank branch or at a competing branch (if they offer better rates).
b)
You apply for them in-person or online, but whether you are given the loan depends on your personal credit score.
c)
They are lent based on your personal credit history rather than secured by an asset like a house or car.
d)
They are given to someone based on their personal familiarity with their banker.
90.
Which of the following statements is TRUE?
a)
Home equity loans or lines of credit are illegal in most states
b)
Home equity loans or lines of credit are only available to people who have paid for their home in full
c)
Home equity loans or lines of credit are not available to renters
d)
Home equity loans or lines of credit are only useful for funding home improvement projects
91.
Amy and Chuck each buy a house in the same neighborhood for $250,000. Amy's monthly mortgage payment is $400 more per month than Chuck's. Which of the following statements would explain the difference?
a)
Amy chose a shorter term for her mortgage, so her monthly payments are higher
b)
Chuck has a lower credit score, so his interest payments are also lower
c)
Amy made a larger down payment, so her monthly payments are also larger
d)
Chuck's interest rate is higher, so his monthly payment due is also lower
92.
Which statement below BEST describes how student loans should be used responsibly during college?
a)
They can only legally cover the costs of tuition, room, and board.
b)
In addition to tuition, room, and board, you can use them to pay other costs of attendance such as books, fees, and transportation.
c)
You can use your student loans to pay for necessities OR to buy anything sold on campus, but you can't use them for off-campus purchases.
d)
Because student loans have such low interest rates, you can use them for large purchases including vacations and car payments while in college.
93.
Which of the following statements about Federal student loans is TRUE?
a)
The Federal government offers numerous loan repayment plans, including standard, income-based, and graduated payments.
b)
Federal student loans do not begin accumulating interest until after you graduate and are employed at least part time.
c)
Federal student loans are typically more expensive than private student loans.
d)
You must take the SAT or ACT to qualify for Federal student loans.
94.
Ashton needs to get his car fixed in order to get to work, and he doesn't have an emergency fund or enough cash in his account to pay for the repair, which costs $975. Which option below is likely the WORST financial decision to solve his problem?
a)
Take out a home equity loan
b)
Obtain a loan through a peer-to-peer lending website
c)
Put the repair on his credit card
d)
Take out a payday loan
95.
Each of the following is an advantage to leasing a car EXCEPT?
a)
Monthly leases are frequently lower than a car payment would be on a loan for the same car.
b)
Lease payments are not reported to the credit agencies, so it's not as bad to miss a payment or two.
c)
Leases allow you to get a newer model car more frequently than the typical car loan would.
d)
Leases are typically short enough that the car stays under warranty for many repairs or service appointments.
96.
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?
a)
$0 down payment, 6% interest, 60 months
b)
$0 down payment, 6% interest, 84 months
c)
$3000 down payment, 6% interest, 60 months
d)
$3000 down payment, 0% interest, 36 months
97.
Which of the following is most likely to represent a fixed rate, secured debt?
a)
A home equity line of credit
b)
A credit card
c)
A peer-to-peer loan
d)
A dealer financed auto loan
98.
If you are having trouble making loan or credit card payments, which recommendation below represents the LEAST useful piece of advice?
a)
Find an extra source of income by taking a second job, working longer hours, asking for a raise, etc
b)
Stop making payments on some of your debts so you can focus on getting the most expensive or largest debts under control
c)
Call your lenders and see if you can negotiate lower monthly payments, lower interest rates, or longer terms
d)
Reduce spending in some other area of your budget so you can direct more funds toward debt payments
99.
Which statement accurately describes a revolving line of credit?
a)
You owe the same payment every month
b)
You can buy additional items as you need them without getting approval for each purchase
c)
They do not charge interest
d)
One common example is a car auto loan
100.
If Suzanne applies for and receives a loan on a peer-to-peer lending website, who is supplying the funding to Suzanne?
a)
An investor hoping to make money on her interest payments
b)
A friend or family member who trusts her to repay the funds
c)
The Federal government, funding the loan with tax dollars
d)
People who have received a loan in the past on the website and are now "paying it forward"
101.
Juan saved $1,000 from his summer job cleaning pools. Which of these savings vehicles would work best for him if he doesn't need access to the money for a number of years AND wanted to earn the highest interest rate?
a)
Regular savings account
b)
Money Market account
c)
Checking account
d)
Certificate of Deposit
102.
Which of these statements about saving is INCORRECT?
a)
People often believe they are saving when they buy products at a listed discount, even if they didn't need the product in the first place
b)
It is extremely difficult to open a savings account, as you typically need at least $10,000 for your initial deposit
c)
Without a separate savings account to pay yourself first, it's more likely that you'll spend all of your income each month
d)
Billions of dollars are spent on marketing to persuade consumers to spend money instead of saving
103.
You are 18 years old, opening your first savings account, and are considering three options: BANK A is not FDIC insured, has an interest rate of 5%, and a minimum deposit of $25. BANK B is FDIC insured, has an interest rate of 0.01%, and a minimum deposit of $50. Bank C is FDIC insured, has an interest rate of 0.02%, and a minimum deposit of $10,000. All three have fees competitive with other banks. Which bank is the best option?
a)
Bank A
b)
Bank B
c)
Bank C
d)
All 3 banks are equally good options
104.
When a bank says their savings account earns 1% interest, that typically means you will earn 1% interest over what period of time (Note: this is not referring to the compounding frequency or frequency of interest payment)?
a)
Daily
b)
Monthly
c)
Quarterly
d)
Annually
105.
Stanley deposits $1,000 into a savings account that pays 1% interest. At the end of the first year, he's earned $10 in interest and there is $1,010 in the account. If the account has simple interest, the 1% interest for year two would be based off ____________. If the account has compounding interest, the 1% interest for year two would be based off ________________.(NOTE: The first choice goes in the first blank, the second choice goes in the second blank)
a)
The original deposit ($1,000); The year one account balance ($1,010)
b)
The original deposit ($1,000); The year one interest ($10)
c)
The year one account balance ($1,010); The year one interest ($10)
d)
The year one account balance ($1,010); The original deposit ($1,000)
106.
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
107.
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
108.
Which of the following statements about banks is FALSE?
a)
If it is FDIC-insured, your money is safe even if the bank fails
b)
Many banks pay interest on the money you deposit with them
c)
Historically, savings accounts earn higher returns than investments in the stock market
d)
Money in a bank is usually easy to access via ATM, debit card or check
109.
You want to take earnings from your part-time job to pay for a new laptop. Your monthly take-home pay is $500 and the laptop costs $1,200. What percentage of your pay do you need to save in order to buy the laptop in 12 months?
a)
5%
b)
10%
c)
15%
d)
20%
110.
Which of these account types allow you to write checks from the account?
a)
Checking accounts only
b)
Checking accounts and online savings accounts
c)
Checking accounts and money market accounts
d)
Checking accounts, online savings accounts, and money market accounts
111.
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
112.
Fill in the blanks with the correct responses. If you follow the 50-20-30 rule of budgeting, you'll be putting 50% of your monthly income toward _______________, 20% of your monthly income toward _____________, and 30% of your monthly income toward ______________.
a)
Needs, wants, savings
b)
Savings, needs, wants
c)
Needs, savings, wants
d)
Wants, needs, savings
113.
Which statement best describes the difference between saving and investing?
a)
Saving is done with small amounts of money, and investing is done with large amounts of money
b)
Saving protects your money from inflation while investing does not protect your money from inflation
c)
Saving is for low-income people, while investing is for rich people
d)
Saving goes into an FDIC insured bank while investing typically goes into stock or bond markets
114.
Which represents the best time to start saving for your retirement?
a)
As soon as you graduate and 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
115.
Which of the following statement 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.
116.
Why is investing a better option than saving when it comes to planning for retirement?
a)
Investing usually has lower interest rates, so it offers a better deal
b)
Investing is guaranteed to produce the large sum of money needed for a happy retirement
c)
Investing begins as soon as you open a bank account, so you can start early in life
d)
The stock market historically has returns higher than the rate of inflation, so your money can actually grow
117.
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
118.
What is meant by the term “impulse shopping?”
a)
Comparison shopping for more expensive items while doing less work to compare cheaper products
b)
Buying an item without giving it much thought, maybe because it’s on sale or you see it and simply love it
c)
Using your emergency fund, rather than your checking account, to make a purchase
d)
Shopping online instead of in stores
119.
Which of these is an example of "Keeping up with the Joneses?"
a)
Buying new sneakers the day they come out, because you know others in your class will have them, too
b)
Applying to the top colleges, to see if you'll get accepted & what financial aid packages they'll offer
c)
Saving for retirement as soon as you graduate college, to take advantage of compounding interest
d)
Buying plane tickets for vacation well in advance so that you'll benefit from cheaper prices
120.
Your sister Reagan has her paycheck direct deposited into her checking and savings accounts each pay period. She asks you how she should split her paycheck between the two accounts. What is the best advice you could offer her to encourage her savings habit?
a)
Direct deposit the full amount of the check each month into her checking account and then decide later how much to put into savings
b)
Add at least 95% of her paycheck to her checking account and 5% to her savings account because you know that saving is hard for her
c)
Add at least 10-20% of her paycheck to her savings account and the remaining 80-90% to her checking account
d)
Do not have her paycheck direct deposited since it is NOT a secure way to transfer money
121.
In current markets, which of these represents a competitive but realistic interest rate on a savings account?
a)
1%
b)
3%
c)
7%
d)
17.99%
122.
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
123.
How is an online savings account different from a traditional savings account?
a)
An online savings account includes a mobile app, while a traditional savings account does not
b)
An online savings account is offered by a bank that customers can only access online rather than at a physical bank branch
c)
Online savings accounts will only offer electronic statements rather than paper copies
d)
Online savings accounts cannot be FDIC insured, whereas traditional savings accounts can
124.
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.
125.
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, so they use every dollar every month
c)
Aunt Tina and her family have high paying jobs and don’t worry much about money
d)
Aunt Tina uses her paychecks as income to deposit into her checking and savings accounts
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