WorksheetsPersonal Finance Final
Total questions: 70
Worksheet time: 35mins
Name
Class
Date
1.
1. Shira is trying to decide between getting a debit card, a prepaid debit card, and a credit card. Which statement is true?
a)
All 3 cards are completely different
b)
Debit cards and prepaid debit cards are the same
c)
Debit cards and credit cards are the same
d)
All 3 cards are completely the same
2.
2. The average APR for a payday loan is closest to …
a)
4%
b)
14%
c)
40%
d)
400%
3.
3. 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, but with credit cards, you're getting a loan that you need to pay back later
4.
4. Which of the following is most likely to represent a fixed rate, secured debt?
a)
A student loan
b)
A credit card
c)
A prepaid debit card
d)
An auto loan
5.
5. 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
6.
6. If you are having trouble making auto loan payments and are really following a tight budget, which recommendation below represents the WORST advice?
a)
Find an extra source of income by taking a second job, working longer hours, or borrowing from family if they can afford to help
b)
Stop making payments on some of your debts so you can focus on getting the most expensive or largest debts under control
c)
Continue making all payments and call your lenders and see if you can negotiate lower monthly payments, lower interest rates, or longer terms
d)
Explore whether a free or non-profit credit counseling service could help
7.
8. Which of the following is true about fixed and adjustable-rate mortgages?
a)
Fixed-rate mortgages have a constant payment every month, but an interest rate that increases throughout the term of the loan
b)
Fixed-rate mortgages have a fixed interest rate for a few years, after which time the interest rate fluctuates according to general market conditions
c)
Adjustable-rate mortgages have a fixed interest rate for a few years, after which time the interest rate fluctuates according to general market conditions
d)
The two mortgages work the same way but are called different names depending if they come from a bank or a credit union
8.
10. Denise took out a payday loan for $300 in August. By February of the next year, she was able to pay back the loan, but she had spent a total of $750 doing so. What’s the most likely story of how this happened?
a)
The minimum monthly payment for payday loans is usually only $10 or $15, so a lot of interested accumulated
b)
Upfront, Denise knew there would be $450 of fees attached to the loan, but she took out the loan anyway
c)
Payday loans must be paid in full within two weeks, and if not, the only option is to renew the loan for a high penalty fee, which she did approximately 12 times
d)
Denise not only paid the $300 she owed, but she prepaid an extra $450 in case she needs another loan in upcoming months
9.
12. Reading through a credit card’s Schumer Box, you see the APR for a specific card is set at 9.99% - 23.99%. Which statement is true?
a)
When given a range of APRs like this, you can assume most cardholders pay the lowest rate listed
b)
Your APR will be within that range, depending on the strength of your credit history
c)
In this case, you want the highest APR in the range because you’ll earn more
d)
The APR on credit cards is usually fixed, so it won't be adjusted as long as you are a cardholder
10.
13. What is an advantage of using a credit card?
a)
It will not affect your credit score or credit history
b)
Since it is tied directly to your checking account, it prevents 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)
You can make an emergency purchase that you otherwise don’t have the money to pay for right now
11.
16. Select the statement below that accurately describes a characteristic of a credit card.
a)
You owe the same payment every month
b)
You must have money deposited into a checking account to use the credit card for purchases
c)
Making full payments on-time every month is the only way to avoid interest charges
d)
They do not charge interest
12.
17. Which of the following statements is CORRECT about secured loans?
a)
They are a good choice to use for student loans
b)
If the borrower does not make payments, the lender can repossess the item
c)
In the event of default, the borrower loses nothing except for the down payment
d)
They usually have higher interest rates as compared with unsecured loans
13.
18. An excellent credit score will help with which aspect of car financing?
a)
Bargaining for a great sales price
b)
Receiving a large down payment
c)
Qualifying for a low interest rate
d)
Having a wide selection of term lengths
14.
19. As a young adult, all of the following are good strategies for building credit, EXCEPT:
a)
Open a credit card, with your parent or guardian as a cosigner
b)
Take out a payday loan
c)
Become an authorized user on a credit card used by your parent or guardian
d)
Open and use a secured credit card
15.
21. Why are payday loans so much easier to qualify for than traditional bank loans?
a)
Payday loans are only used by affluent households, and the banks know they have enough money to cover them
b)
Payday loans are just another word for direct deposit, and almost all employers offer their employees direct deposit instead of a paper paycheck
c)
Payday loans require proof of employment or other regular income but not a credit check
d)
Payday loans are typically for such small dollar amounts that no one cares if you repay them or not
16.
22. Trudy tells her mom that she wants to buy a house within two years of graduating from college. Her mom says Trudy will need a down payment first. What is a down payment?
a)
A large sum of money you pay when taking out a mortgage so that the principal of your loan is smaller
b)
A specific type of tax advantaged bank account used for saving money to buy a house
c)
The first year’s worth of property taxes, held in reserve
d)
A prepayment to a real estate agent so that they will start helping you house hunt
17.
23. Duc has a credit card with a $1000 credit limit. His outstanding balance is currently $800. What is the maximum amount he can now spend on this credit card?
a)
$200
b)
$800
c)
$1000
d)
$1800
18.
25. Why would credit card companies prefer that their cardholders make the minimum monthly payment every month rather than paying their total balance in full?
a)
This is required by federal law for tax purposes
b)
This allows the card holder to pay their bill quickly and close the card when they’re ready
c)
This enables the credit card company to make more money
d)
This helps cardholders develop financial independence
19.
26. What are the two most important factors in calculating your credit score?
a)
Payment history and types of accounts
b)
Amounts owed and length of credit history
c)
Payment history and total debt
d)
Length of credit history and new credit inquiries
20.
29. All of the following would show up on a credit report EXCEPT...
a)
Salary of your current job
b)
Payment history of your car loan
c)
Credit card payment history
d)
Student loan activity
21.
32. Melvin is 19 years old and wants to begin establishing a credit history. Which action should he take to meet that goal?
a)
Always say "credit" when asked "credit or debit?" at a store
b)
Ask his parents to cosign a credit card or add him as an authorized user on their credit card
c)
Any time he borrows money from a friend or family member, be sure to pay it back promptly
d)
Take out some private student loans, even though he doesn't need them because he has grants and scholarships
22.
33. Which of the following individuals or groups would be the LEAST likely to look at your credit score?
a)
Someone interviewing you for a job
b)
Credit card companies
c)
An insurance company reviewing your applicant for auto insurance
d)
A bank representative who is helping you open a savings account
23.
35. You have a credit card that you use regularly for small purchases with the goal of improving your credit score. Which strategy would have the GREATEST positive impact?
a)
Use less than 30% of the credit limit and pay it off in full every month by the due date
b)
Always carry a balance from month to month
c)
Regardless of how much your balance is, make the minimum payment required on your credit card every month by the due date
d)
Put the credit card in a drawer instead and don't ever use it
24.
37. Who tracks all of your credit information?
a)
Credit reporting agencies (Equifax, Experian and TransUnion)
b)
Federal government
c)
Consumer Financial Protection Board (CFPB)
d)
Lenders
25.
38. What is the general timeline to establish your first credit score?
a)
As soon as you apply for a credit card or loan
b)
Six months after you first actively use your credit
c)
Once you pay all of your credit balances in full
d)
Once you turn 18
26.
40. Which of the following things should you have ready when contacting a credit reporting agency to report an error on your credit report?
a)
Your preferred payment method to pay for fixing the error
b)
A list of all of your financial accounts and balances
c)
An explanation of the mistake and any evidence you have supporting your claim
d)
References from a non-family member vouching for your creditworthiness
27.
41. Which of the following could have a NEGATIVE impact on your credit score if done in a short period of time?
a)
Paying your bills on-time
b)
Paying down balances on your credit card accounts
c)
Decreasing your utilization of credit
d)
Applying for multiple credit cards
28.
42. Which best describes the Debt Snowball method for paying off debt?
a)
Only make payments on your smallest debt first, then move on to your second smallest debt, and so on
b)
Once your debt "snowballs" out of control, hire a certified credit counselor to help get your finances back on track
c)
Make the monthly minimum payments on all your debts, and then put any extra cash toward the debt with the highest balance
d)
Make the monthly minimum payments on all your debts, and then put any extra cash toward the debt with the lowest balance
29.
43. Which of these represents a potential consequence of neglecting to pay your federal student loans?
a)
Wages or tax refunds can be garnished
b)
Passport revocation
c)
Driver’s license suspension
d)
Termination from your job
30.
44. What benefits do you receive by taking out a loan with a cosigner?
a)
You don’t get penalized for late payments
b)
You get a discount on future loans after this one is paid off
c)
You have a better chance of getting approved and getting a lower interest rate if the cosigner has good credit
d)
You automatically get the same credit score as the cosigner once the loan is paid off
31.
46. Which response best completes the sentence "It's best to begin establishing credit when you're young because ________" ?
a)
Accessing credit only becomes more expensive as you get older
b)
Negative marks on your credit report go away faster for younger borrowers
c)
Credit scores are free for anyone under the age of 25
d)
You will likely need a credit history to rent your first apartment, finance your first car, or open an unsecured credit card
32.
49. Which free credit report service is authorized by federal law but only accessible once per year?
a)
AnnualCreditReport.com
b)
Credit Karma
c)
Credit Wise
d)
Wallet Hub
33.
50. How can your credit score impact your financial well-being?
a)
Only consumers with high scores are approved for credit
b)
Consumers with low scores get lower interest rates on loans than those with high scores
c)
Your credit score can determine whether you are approved for a loan and what the interest rate on that loan will be
d)
It generally has no impact on your financial situation
34.
1. What is an insurance premium?
a)
Your monthly payment to your insurer, regardless of whether you use any services
b)
A list of the procedures covered by your insurance carrier
c)
An added cost you pay in order to receive higher-quality services
d)
The amount you pay out-of-pocket for a specific procedure or service
35.
3. When setting your premium, your car insurance company may consider each of the following EXCEPT...
a)
How many miles you drive per year
b)
Your age
c)
Your driving record
d)
Your height
36.
4. Insurance companies make money by...
a)
Refusing to pay out claims to policyholders
b)
Collecting money from the government
c)
Collecting more in premiums than they need to pay out each year
d)
Keeping costs low with minimal advertising
37.
6. Your renter's insurance policy costs $20/month and has a $1,000 deductible. A thief breaks into your apartment and steals your $800 TV set. How much would your insurance company pay?
a)
$0
b)
$200
c)
$800
d)
$1,000
38.
7. Someone broke into Sam’s car by smashing the passenger window. Which type of auto insurance coverage will help cover the cost to get the window replaced?
a)
Bodily injury liability
b)
Property liability
c)
Collision
d)
Comprehensive
39.
8. Why would someone choose to get long term disability insurance even if they already have health insurance?
a)
Long term disability only covers medical bills, while health insurance will help compensate for lost work with 40-60% of their income
b)
Long term disability insurance plans can also extend coverage to family members and pets
c)
Health insurance only covers regular check ups, while long term disability insurance also covers emergencies
d)
Health insurance only covers medical bills, while long term disability will help compensate for lost work with a percentage of their income
40.
9. You cause an accident and injure the other driver. The case goes to trial and there is a verdict to compensate the injured person with $58,000. You have a $75,000 coverage limit per person for Bodily Injury. How much will the insurance company pay?
a)
$0
b)
$17,000
c)
$58,000
d)
$75,000
41.
10. Frank has an auto policy with a coverage limit of $30,000 and a deductible of $1,000. He gets into an accident and the damages to his car total $6,200. Fortunately, he has collision coverage. How much will Frank need to pay out-of-pocket?
a)
$0
b)
$1,000
c)
$6,200
d)
$30,000
42.
12. Medicaid generally provides insurance for which of the following groups of people?
a)
The elderly or disabled
b)
Individuals in low-income households
c)
Anyone who wants to buy coverage from the Marketplace
d)
Employees who have a government position
43.
13. Your employer offers an employer-sponsored health insurance plan. Which of the following statements is TRUE?
a)
You can only see doctors who are also employees of the same company
b)
Your health insurance premiums will be paid directly from your paycheck, pre-tax
c)
Your employer cannot fire you if you get sick or injured because you have employer-sponsored health care
d)
You can remain on that health insurance plan even if you switch jobs
44.
15. What type of auto insurance are you required to carry in almost every state (49 out of 50)?
a)
Insurance if you damage your own property
b)
Insurance if you cause injury to another person
c)
Insurance in case you get into an accident with someone who does not have insurance
d)
Insurance if you cause injury to yourself
45.
16. Bruce has just graduated from college and decides that instead of paying for insurance, he'll work on building up his emergency fund. This way, if something goes wrong, he can just pay for it using cash. Why is this a risky idea?
a)
It is mandatory to have auto, health, life, disability, and renters/home insurance, so he'll have to pay 5 penalties per year for not enrolling in these insurance types
b)
An accident or illness can strike at any time and be quite expensive, so it's possible he'd need a big sum of money well before his emergency fund was large enough
c)
Having insurance not only protects you financially, but also physically, so he'll be less likely to experience illness or accident if he has insurance
d)
The sooner he starts paying for insurance, the sooner he will reach his maximum lifetime requirement and can stop paying altogether for coverage
46.
17. Your parents tell you that on your 22nd birthday, they would like for you to get your own health insurance. You are very healthy, are not taking any prescription medicines, and generally only see your doctor for your annual physical. What type of health insurance is likely to be best for you?
a)
A low deductible plan with a high monthly premium
b)
A high deductible plan with a low monthly premium
c)
Your parents MUST keep you on their plan. They cannot legally remove you.
d)
You do not need health insurance because you are healthy
47.
20. In general, how do insurance companies decide how much to charge an individual for their monthly premiums?
a)
The company assesses the individual's risk factors and assigns higher premiums to higher risk individuals
b)
The company looks at the individual's tax filings from the previous year to assess overall wealth and ability to pay
c)
The company charges the same premium for every individual eligible for coverage
d)
The company increases or decreases premium rates based on the stock market
48.
21. Which of the following insurance coverage options would be the lowest priority for a typical single person, with no children, 1-2 years out of high school?
a)
Health Insurance
b)
Auto Insurance (if they have a car)
c)
Life Insurance
d)
Renter's Insurance (if they are renting an apartment)
49.
23. A standard renters insurance policy would cover each of the following EXCEPT…
a)
A small TV and some sneakers, stolen in a robbery
b)
A new window when a baseball breaks the original one
c)
A lawsuit brought when a visitor hits their head on a low hanging light fixture
d)
A week of hotel reservations when the tenant has to move out due to fire damage
50.
24. Finn moves from a rented apartment into his very first house. What should he expect regarding the cost of homeowners insurance compared to renters insurance?
a)
He will not need homeowners insurance, because owning a home is less risky than renting
b)
His homeowners insurance will be LESS expensive than his renters insurance was
c)
His homeowners insurance will be the same cost as his renters insurance was
d)
His homeowners insurance will be MORE expensive than his renters insurance was
51.
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
52.
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
53.
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
54.
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
55.
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
56.
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
57.
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
58.
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?
59.
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
60.
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
61.
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
62.
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
63.
15. Question #1 of 3: What was the net (or take-home) pay for this employee for this pay period?
a)
$335.10
b)
$400.00
c)
$2,680.80
d)
$3,200
64.
16. Question #2 of 3: How much did this person pay towards Medicare in this pay period only?
a)
$5.80
b)
$24.80
c)
$44.50
d)
$52.20
65.
17. Question #3 of 3: How frequently is this employee paid?
a)
Daily
b)
Every other week
c)
Weekly
d)
Monthly
66.
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
67.
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
68.
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
69.
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
70.
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
100 %
