WorksheetsFinLit Final Review 2 (Study Guide)
Total questions: 36
Worksheet time: 18mins
Each of the following is a way to access money in your checking account EXCEPT...
Take out cash using your debit card at an ATM machine
Use your debit card to pay for groceries at a Point-of-Sale (POS) terminal
Write a check to pay the rent on your apartment
Swipe a prepaid card to pay for your fast food purchase
When signing up for a new checking account you answer 'No' and opt out of overdraft protection. On this day, you have $10 in your account and go out and use your debit card to buy lunch for $12, a movie ticket for $12 and dinner for $15. What is likely to be the outcome resulting from these transactions?
Your account will be closed
You will likely be charged an overdraft fee for EACH transaction and need to repay the bank the funds overdrawn ($29) + interest
Since you turned down overdraft protection, the bank will not allow you to overdraw your account so your card will be denied in these 3 instances
The bank will provide you with ve days to add funds to your account to cover the overdraft but will not charge you any fees
When you review your monthly checking account statement, which statement below would indicate that you deposited more money than you spent?
Your previous balance is higher than your ending balance
Your fees are greater than your starting balance
Your withdrawals are larger than your fees
Your ending balance is higher than your previous balance
Which is an advantage of paying your bills using the online bill pay feature with your checking account?
The company you are paying receives the money on the same day.
There is typically only a small fee to set-up and use this feature.
It saves time and paper.
It eliminates late fees.
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?
Direct deposit the full amount of the check each month into her checking account and then decide later how much to put into savings
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
Add at least 10-20% of her paycheck to her savings account and the remaining 80-90% to her checking account
Do not have her paycheck direct deposited since it is NOT a secure way to transfer money
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)?
Daily
Monthly
Quarterly
Annually
When taking out a loan, the shorter your term length, the the total interest you will pay.
higher, lower
higher, higher
lower, lower
lower, higher
What is an advantage of using a credit card?
It will not affect your credit score or credit history
Since it is tied directly to your checking account, it prevents you from spending money you do not have
If you need to carry a balance, the interest rates are generally quite low (less than 5%)
If you pay off your balances every month in full, it's like getting a short-term interest-free loan
Each of the following financial products will help you build a credit history EXCEPT...
Secured credit card
Debit card
Auto loan
Credit card
Your teacher tells you about the importance of checking your credit report. Which government-run website allows you to download your credit report for free on an annual basis?
creditkarma.com
freecreditreport.com
getcreditreportshere.com
annualcreditreport.com
Arturo has a student loan of $40,000 that charges 4.6% interest, a credit card bill with a balance of $1200 and a 23.4% interest rate, and an auto loan of $6000 with a 7.2% interest rate. If he's using the High Rate method of debt repayment, where should any extra money in his budget go?
To his savings account for next month
To his student loan
To his credit card bill
To his auto loan
How much does it cost to file the FAFSA?
Nothing; it is free
It is free the first time you file, but costs $9.99/year thereafter
It is 2% of your total loan amount
$50
Why are grants and scholarships considered the most desirable types of financial aid?
They are guaranteed to last all four years of college
They always cover full tuition plus room and board
They do not need to be repaid
They have low interest rates and manageable repayment plans
What is one benefit of selecting an income-based repayment plan for your student loans?
If you take a job that pays a low income, you will never have to pay any of your student loans
Your student loan interest rate will fluctuate based on how much you've earned in the previous year
Your monthly loan payment will be based on your income, so that you're not paying more than 20% of income toward your loans
The total loan amount will be decreased to meet your starting salary at your first post-college job
Which should you use when creating a budget - your NET PAY or GROSS PAY?
Net pay, because it's what is reported to the government by your employer for tax purposes
Gross pay, because it's the total amount you've earned that month
Net pay, because it's the total amount you've earned minus taxes and other deductions
Gross pay, because it's the total amount you've earned minus any recurring bills you owe for the month
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 $900, car related expenses to be $550, entertainment of $200, food expense of $250, cable bill of $75, mobile phone of $100, student loan payment of $400 and other expenses of $150. How would you describe your budget after analyzing all of your income and expenses?
You have a surplus of $125.
You have a deficit of $125.
You have a deficit of $2,625.
You have a surplus of $2,500.
Aaron realizes he has a budget deficit of roughly $175 at the end of two months in a row. Which of these options makes the most sense for him to fix his problem?
Cancel his cable TV subscription and go out to dinner three fewer times each month with friends
Start paying just the minimum monthly payment on his student loan and credit card debt, instead of the extra he's been contributing
Contribute $100 less to savings each month and $75 less to his retirement fund
Sell his current car and get a less expensive vehicle
Ricky is 25 and wants to start saving for retirement. Why might he want to invest his money rather than put it in a savings account?
Investing guarantees a return of 10% every year while saving accounts do not
Investing requires very little work while saving requires a lot of work
Investing is best for short-term goals while saving is best for long-term goals
Investing typically beats the rate of inflation while saving does not
You bought 10 shares of stock in StreamingVideoCo for $45 per share. Two months later you sold the 10 shares of stock for $80 per share. What was your profit or loss on StreamingVideoCo stock? Assume that Streaming VideoCo didn't pay a dividend and that you didn't incur any trading fees during that period.
Loss of $800
Gain of $350
Loss of $450
Gain of $800
What is cognitive bias?
A logical strategy humans use to come to a decision that is in their best interest
An argument that is based on fact, usually backed up by scientific evidence
A theoretical-based approach to solving problems that most humans face
A systematic error in thinking that can influence humans' decisions and judgments
Which of the following steps would you recommend MOST people should take if they want to feel less FOMO (fear of missing out)?
Buy stuff on a weekly basis so you always have something new to show your friends and family
Decrease time spent on social media and increase time spent on enjoyable activities
Say 'yes' to all social events even if you don't feel like going to them
Delete of your social media accounts and data as soon as possible
In the past few decades, social media advertising has...
Become nearly indistinguishable from other types of content on social media platforms
Used fewer cognitive biases to influence consumers' financial decisions
Evolved to encourage consumers to save more money to reach their financial goals
Decreased its use of consumer data in an effort to protect consumer information and privacy
Which of the following would be a suggested action prior to a job interview?
Call the company at least twice to verify the date, time, and location of the interview
Conduct online research to learn more about the person you are having the interview with
Make sure you have scheduled transportation so you arrive 60 minutes early to the interview
Stay up really late going over interview questions
Soft skills are different from hard skills in that...
Soft skills are easy to measure and demonstrate while hard skills are not.
Soft skills are significantly less important to employers than hard skills.
Soft skills are interpersonal skills while hard skills are the specific skills that are required to do your work.
Soft skills require little to no practice while hard skills require regular practice throughout your career.
Which of the following is a recommended practice when using LinkedIn?
You should be as vague as possible in your LinkedIn profile so that employers are curious to know more about your career.
You should only include the exact information that is on your resume in your LinkedIn profile.
You should use LinkedIn in the same way you use other social media platforms.
You should use LinkedIn to expand your network and explore new career opportunities.
When do you start paying taxes?
When you turn 18
When you make more than the minimum income requirement
When you get a full-time job (part-time does not count)
When you are notified by the IRS that you are required to pay federal income taxes
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 federal and state income taxes?
W-2
W-4
1-9
1040
What tax form am I? I am received in January. There is one of me for every employer that you worked for in the previous year. I have information on how much you earned and how much you paid in taxes for the previous calendar year.
1040
1-9
W-2
W-4
The number one reason risk pooling is valuable to the insurance industry is...
It allows companies to charge the same premium to all members of the pool.
It brings together many individuals' premiums so that there is money to cover the select few with losses.
It makes insurance coverage available to everyone, even those who are unable to make their payments.
It is subsidized by the federal government.
All of the following represent a compelling reason to pay a higher insurance premium EXCEPT...
You will receive a higher level of customer service and better care
You will have a lower deductible
You will have a higher coverage limit
You will have a lower out-of-pocket maximum
Which of the following statements is TRUE about auto insurance premiums?
If you have an auto insurance policy and don't get into a car accident or file any claims for a year, you get your premiums back from the insurance company.
If you have an auto insurance policy and get into multiple accidents within one year, your premium amount will decrease.
Auto insurance premiums are a fixed price across all insurance companies.
Auto insurance premiums can vary from company to company, therefore, it is important to comparison shop for the best price and coverage.
One moderate step you can take to use social media more mindfully as a consumer is to...
Follow influencers who are constantly advertising new products
Delete all of your social media accounts immediately
Limit your time on social media by checking your feeds a few times throughout the day
Click on all advertisement links to ensure you never miss a deal
All of the following are examples of dark patterns EXCEPT...
Having a clear 'unsubscribe' link at the bottom of an email
Using colored buttons to confuse users to make an in-app purchase
Including a countdown timer on a deal to create a sense of urgency
Having customers complete a series of time consuming steps to close an account
Which of the following scenarios accurately demonstrates the practice of comparison shopping?
Zenya compares the price of a shirt to the price of a pair of pants that she is interested in buying
Anthony compares the quality of a backpack he bought to the quality of a backpack his friend bought
Lina compares the price, reviews, and other factors for the same product offered by different retailers
Samir compares a laptop he bought a year ago to a newer version available now
All of the following are signs of a possible scam EXCEPT...
You receive a text from your bank with a link you've never seen to log into your account
You receive a coupon from a retailer with an exclusive deal that seems too good to be true
You receive an email from the IRS demanding you pay taxes you owe within 24 hours
You receive a call back from your health insurance provider after leaving them a message
Who is taking a smart step towards protecting themselves from identity theft?
Melody, who uses a website that starts with 'http' instead of 'https'
Akshay, who checks his bank statements every month to verify all transactions are accurate
Misha, who throws their expired credit card in the trash without shredding it
Isaiah, who logs into his bank's mobile app using the public WiFi network at the local cafe
