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WorksheetsSLO review
Total questions: 43
Worksheet time: 42mins
Interpret which of the following statements best explains why income alone does not determine wealth.
A. Investing is the only factor that contributes to wealth building.
B. Income alone does not determine a person’s wealth.
C. Only people who are natural savers can become wealthy.
D. The amount of money a person makes does not dictate his or her spending and saving behavior
Describe the main reason of widespread financial insecurity of Americans.
The saving rate of Americans is low and many borrow in order to spend more than they earn.
B. Most Americans save a high proportion of their income.
C. Government programs are unavailable to help people when they are disabled or experience unemployment.
D. Unemployment rates are high and incomes of Americans are low.
______3) Which of the following is the best reason to save money?
A. emergency fund
B. large purchases
C. lend money to friends
D. build wealth
___4) This principle suggests that a certain amount of money today has different buying power than the same amount of money in the future, thereby changing the “value” of the money.
A. time value of money
B. inflation
C. opportunity Cost
D. interest Rate
______5) Decide which of the following account records would have the most current balance.
A. your monthly bank statement
B. your own account register
C. account balance statement from ATM
D. checkbook
_____6) Distinguish what a credit score is intended to measure.
A. your financial success
B. your income level
C. the risk of not repaying debt
D. the amount of money you have in the bank
______7) Which of the following things can be done with a credit card but can’t be done with a debit card?
A. reserve a hotel room
B. go into debt
C. purchase tickets
D. purchase something online
______8) What happens when a company places an ad and offers no interest on your purchase for three years?
A. they are not interested in making a profit
B. they are showing their appreciation to you by giving you free money
C. the cost of financing is built into the price of the item
D. the ad is free
_9) Which concept is best explained by the statement “Money spent here cannot be spent there”?
A. delayed gratification
B. significant purchase
C. law of diminishing return
D. opportunity cost
______10) Describe liquidity.
A. the less liquid the investment, less return
B. the more liquid the investment, less return
C. the more liquid the investment, more return
D. the less liquid the investment, the more return
______11) A young investor willing to take moderate risk for above-average growth would be most interested in:
A. bonds
B. real estate
C. mutual funds
D. single stocks
__12) When buying and selling investments, the first thing you should do is:
A. set your investment goals and consider a time frame
B. learn the different types of investments
C. understand basic investment strategies and identify ones that will help you reach your goals
D. switch your investment strategy often based on market conditions
A. set your investment goals and consider a time frame
B. learn the different types of investments
C. understand basic investment strategies and identify ones that will help you reach your goals
D. switch your investment strategy often based on market conditions
______13) What is the main purpose of insurance?
A. develop a savings plan
B. transfer financial risk
C. provide investment opportunity
D. make a lot of money
______14) You are involved in a two car accident in which you are at fault. The other driver is injured. Which part of your insurance covers the medical expenses of the victim?
A. uninsured motorist protection
B. collision
C. liability
D. comprehensive
______15) Identify the difference between gross pay and net pay.
A. gross pay and net pay are the same
B. net pay describes your pay after deductions, gross pay is before
C. gross pay is pay after deductions, net pay is before
D. net pay is always more money
______16) This tax pays for benefits that workers and families receive for either Social Security or Medicare.
A. excise tax
B. Federal Insurance Contribution Act (FICA)
C. state income tax
D. sales tax
______17) A life insurance policy provides a monetary payout in the event of death. Determine the best life insurance.
A. Term
B. Whole life
C. Universal
D. Level
______18) The Internal Revenue Service (IRS) is the federal government agency responsible for:
A. filling out tax forms
B. writing tax laws
C. tax collection and tax law enforcement
D. keeping the unemployment rate low
______19) The most important step in getting a job is:
A. resume
B. cover letter
C. introduction letter
D. interview
______20) What percentage of households give to charity?
A. 5%
B. 20%
C. 65%
D. 100%
21) When it comes to managing money, success is ______% head knowledge and _______%
A. 50,50
B. 80,20
C. 60,40
D. 20,80
22) Instead of borrowing money for large purchases, you should set money aside in
_______over time and pay with cash.
A. sinking fund
B. emergency fund
C. mortgage fund
D. credit card fund
23) What is a rate that is charged on Debt or paid on investments for the use of money?
A. inflation
B. compound interest
C. interest rate
D. emergency fund
________24) Which of the following is a consequence of overdrawing your checking account?
A. bank overdraft fee
B. check fee
C. stress
D. credit card fee
25) What is the main purpose of doing a written budget?
A. make your money go farther
B. make overspending more likely
C. track spending in all areas
D. remove guilt and shame associated with purchases
27) This is a preferred method of debt repayment including a list of smallest to largest balances.
A. debt snowball
B. loan term
C. credit report
D. depreciation
26) What is the most important reason to maintain a file of both paper and electronic financial
records?
A. useful in filing taxes
B. disputing bank errors
C. fraudulent purchases
D. in case of fire, theft, flood or death
28) Explain why an adjustable rate mortgage is a bad idea.
A. interest changes based on market conditions
B. payments too low
C. increased risk of losing home due to high payments
D. both A and C
29) What money for college does not have to be paid back?
A. Loans
B. Scholarships/Grants
C. FAFSA
D. Mentorship
30) Which of the following is a common marketing strategy?
A. repetition
B. tease the consumer
C. buyer’s Remorse
D. inflation
31) Which piece of information, if stolen, is likely to lead to identity theft?
A. passcodes
B. phone number
C. social Security Number
D. email
32) It is a good idea to check your credit report:
A. every 6 months
B. every 3 years
C. every year
D. every 5 years
33) What could you list on your resume if you didn’t have a lot of work experience?
A. clubs, activities, sports
B. picture
C. parent names
D. sibling names
34) Which is the best investment benefit to home ownership?
A. lower tax bracket
B. grows tax free
C. inflation hedge
D. forced savings plan
35) Your rent or mortgage should be _______% of your take home pay.
A. 20%
B. 25%
C. 30%
D. 40%
Short Answer: Answer using 1 to 3 complete sentences.
36) Why worry about retirement when every worker pays into social security?
Short Answer: Answer using 1 to 3 complete sentences.
37) List some ways you can avoid student loan debt if you do not have a college fund.
Short Answer: Answer using 1 to 3 complete sentences.
38) Teens are a major target of the credit card industry. Explain why.
Short Answer: Answer using 1 to 3 complete sentences.
39) Why it is better to buy a used car instead of a brand new vehicle?
Answer using 1 to 3 complete sentences.
40) Explain why insurance is so important.
Answer using 1 to 3 complete sentences.
41) What steps do you take if you find an error on your credit report?
Extended Response: Answer in paragraph form (5 to 7 complete sentences)
42) Explain at least 3 ways in which advertising affects your buying decisions.
Extended Response: Answer in paragraph form (5 to 7 complete sentences)
43) Tara works for a well-known financial company as a sales representative. She earns a small base salary but receives a commission on every product she sells. Tara has basic living expenses (rent, utilities, food, gas, car insurance, etc.) in addition to a student loan. She wants to start adding to her Roth IRA and buy a new television and sound system for her home. She never knows what her monthly income will be due to the commissions. What advice can you give her to help her meet her goals?
