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WorksheetsPersonal Finance Exam
Total questions: 52
Worksheet time: 31mins
What is a 'credit score'?
The number of credit cards one owns.
The years one has lived at their current home.
The money in one's bank account.
A numerical representation of creditworthiness.
Samuel, Hannah, and Evelyn are discussing the importance of a good credit score. Samuel thinks it's for getting discounts, Hannah believes it's to show off, and Evelyn says it's to secure loans and job opportunities. Who is correct?
Samuel: It's for getting discounts
Hannah: It's to show off
Evelyn: It's to secure loans and job opportunities
None of them
Jackson, Olivia, and Abigail are discussing how to tackle their student loan debt. What advice would you give them?
Wing it, avoid making a budget and stick to minimum payments.
Take out more loans to pay off the existing ones.
Ignore the loan payments and splurge on a post-graduation trip.
Create a budget and make loan payments a priority.
Aria, Benjamin, and Mason have just graduated and have student loans to repay. What is the usual grace period before they need to start making payments?
6 months
2 years
3 months
1 year
What are the key differences between federal and private student loans?
Federal student loans have high interest rates, while private student loans are cheaper.
Federal student loans require a credit check, but private student loans do not.
Federal student loans are for undergrads, while private student loans are for grad students.
Federal student loans are backed by the government, while private student loans are from private lenders.
Why might Grace, Luna, and Aiden need to fill out a FAFSA form for their university journey?
To sign up for the university's gym?
To check if they're eligible for unemployment benefits?
To check if they qualify for university financial aid?
To apply for a new passport?
Ava, Maya, and Jackson are discussing how to manage their student loan payments. What advice would you give them?
Pay the minimum amount for as long as possible.
Consider income-driven repayment plans, refinancing, or loan consolidation.
Ignore the loan payments and hope they disappear.
Take out another loan to pay off the student loan.
What strategies should Ava, Evelyn, and Rohan follow to win the 'Credit Score Monopoly' game?
Open multiple new accounts at once.
Pay bills on time, keep credit card balances low, and avoid opening too many new accounts at once.
Max out their credit card balances.
Ignore their bills and payments.
Why might Anika be dealing with a penalty APR on her credit card?
Her card's promotional interest rate has ended and the rate has increased.
She has paid her credit card bill in full for the last 6 months.
She exceeded her credit limit for a week after buying a new smartphone.
She missed her March and April payments while on a trip.
Charlotte, Henry, and Oliver are starting a lemonade stand. They need to consider ___ and ___. What are these two factors in economics?
location and price
dos and don'ts
negatives and positives
costs and benefits
Which type of college funding doesn't need to be paid back if received?
Loans
Scholarships
FAFSA
Mortgage
What will calculating assets, income, liabilities, and expenses help determine for a small business?
Monthly budget
Spending habits
Retirement savings
Net Worth
Jenny's credit application was declined due to no credit history. What advice can help her build a positive credit history?
Suggest Jenny to acquire several credit cards to prove that she can manage them responsibly.
Advise Jenny to obtain a secured credit card.
Recommend Jenny to apply for a different type of credit.
Tell Jenny to reapply for the same credit but include a letter of recommendation.
Which quote would you choose for a paper about the American people's debt?
“Beware Of Little Expenses; A Small Leak Will Sink A Great Ship.”
— Benjamin Franklin
“A Budget Is Telling Your Money Where To Go, Instead Of Wondering Where It Went.”
— John C. Maxwell
“Every Time You Borrow Money, You’re Robbing Your Future Self.”
— Nathan W. Morris
The price of anything is the amount of life you exchange for it.
– Henry David Thoreau
When can a person view his/her credit report for free?
Anytime and unlimited times
When financially capable
Once a year, from each of the three main credit reporting agencies
Cannot review credit report
Maya wants to buy a stereo for $500. She takes $250 from her bank and borrows the rest from her parents. After getting the money, she buys the stereo. Who is the debtor in this scenario?
Maya
Maya's Parents
First National Bank
Stereo City
Which of the following scenarios is NOT a danger sign of overextending credit?
Using one credit card to pay off another.
Sometimes skipping some payments to make other payments.
Credit score is on the rise.
All credit cards are nearly maxed out.
Megan bought a prom dress using the money she had saved for replacing her car tires. What situation might she be in now?
Megan used most of her tire replacement savings for the dress. Now, she needs to replace the tires but is short on cash.
Megan found a coupon that saved her 30% on the dress.
Megan chose the least expensive dress from her top three choices.
Megan bought a comfortable dress that cost $28 more than another option.
Which situation BEST represents the packing of a NEED?
Mason is going to a dance. He has a suit from last year, but his dad thinks he needs a new one.
Liam is attending a science fair and needs to dress ‘professionally’. His father thinks he needs to pack something more appropriate than jeans and a t‐shirt.
Zoe found some sneakers for Liam at a good price. Liam has several pairs of sneakers but they decide to pack these.
Liam is traveling to Asia in winter. His current winter jacket is not warm enough. His dad believes he needs to pack a warmer winter jacket.
Harper is deciding where to open a new bank account. Henry tells her a key difference between commercial banks and credit unions is:
Commercial banks are 'for-profit', owned by corporations. Credit unions are 'not-for-profit', owned by members.
Commercial banks usually pay higher interest rates than credit unions.
Credit unions are more common in rural areas, while commercial banks are more common in urban areas.
Commercial banks offer more services, like debit cards and online banking, than credit unions.
Which of the following statements is NOT TRUE about interest rates?
Interest rates are the cost of borrowing money.
When earning interest, it's better to have high rates.
When paying interest, it's beneficial to have high rates.
The amount of interest earned or paid is influenced by the interest rate.
Ethan worked 22 hours at his job and expected to earn $176. However, his paycheck was 1/3 less than expected. What could be the reason?
He didn't deduct the hours spent on training.
He didn't deduct the excise tax paid on his uniforms.
He didn't deduct the amount for income and payroll taxes.
His employer made a mistake in calculating his work hours.
Abigail, Emma, and Ava are discussing the importance of investing in oneself. Eric is looking for a thesis statement for his paper on the same topic. Which sentence should he choose?
Abigail: 'Completing your degree is the best way to prepare for a career.'
Emma: 'Education results in higher earnings and lower unemployment rates.'
Ava: 'Human capital and skills only come from formal training.'
Abigail: 'Investing in yourself too early can lower your standard of living.'
Elijah mentions a 'transferable skill.' What does he mean by this?
It's a skill he uses in his current role, which he picked up from previous experiences.
It's a skill that can only be used in Elijah's job.
It's a skill that each employer requires Elijah to learn.
It's a skill that is learned at one job and is required at other jobs as well.
Jaimen is considering defaulting on his student loan. Which is NOT a potential consequence?
He could be denied credit cards, car or home loans, or apartment leases.
The bank could refuse to allow him to open a checking account.
He may not be able to obtain a marriage license.
His wages may be garnished.
When would considering the Cost of Living be important when comparing job offers?
Moving expenses for Sarah's new job.
The cost of basic necessities in the city of Henry's new job.
The value of Grace's benefits package in her new job.
Daniel's college costs compared to his new job salary.
Harper is offered a summer job by Jackson, who plans to pay him in cash without deducting any taxes. What is true about this situation?
Harper won't need to pay taxes because his earnings are under the federal tax deduction limit.
Receiving payment in cash for work is illegal and Harper could be fined.
Harper will need to pay his own federal and state taxes as they are not being deducted.
Being paid in cash is beneficial for Harper as he will earn more.
What statement should Dylan include in his presentation to explain compounding interest?
Interest earned on the principal investment.
Any form of interest earned from saving or investing.
Earning interest on interest.
The effect interest has on the total return on investment.
Scarlett, Grace, and Jackson are saving $150.00 a month by giving up their daily coffee for a vacation. This act is known as:
opportunity cost
interest
part of the SMART goal
trade-off
Which statement about investing in stocks is not true?
A stockholder owns part of the company.
A stockholder may pay different prices for the same stock.
A stockholder may or may not receive a dividend.
A stockholder always receives a profit when the stock is sold.
Why should you consider investing in a diversified portfolio?
It increases the risk/return ratio
It limits choices to one or two investment tools
Your stock broker can predict the return an investment will have
It decreases risk by investing in a variety of investment tools
Noah bought a laptop with his credit card and plans to only make the minimum payment each month. What will this result in?
Significantly reducing the total balance each month
Increasing the total amount Noah will pay over time compared to the initial charge of the laptop
A strategy for Noah to pay off the credit card quickly
Preventing any interest charges from accruing on Noah's credit card
Which action by Elijah would not risk identity theft?
Using an unprotected laptop
Replying to an email from his bank
Paying in cash
Throwing his mail in the trash
Maya is considering leasing a vehicle for a road trip. How would she explain what this means?
She would be purchasing the vehicle by making payments over time.
She would be renting the vehicle by making payments over time, although the vehicle title would remain with the lease grantor.
Her depreciation costs will likely be higher.
She will need to pay a larger down payment to offset the lease agreement fees.
Abigail is selling cars and James is dealing in skyscrapers. Can you help understand the Law of Demand and the Law of Supply in this context?
The law of demand states that as Abigail raises the price of her cars, the quantity demanded for her cars also increases.
The law of demand states that as James raises the price of his skyscrapers, the quantity demanded for his skyscrapers decreases, and vice versa.
The law of supply states that as James lowers the price of his skyscrapers, the quantity supplied for that product increases and vice versa.
The law of supply states that Abigail lowers the price of her cars, the quantity supplied of her cars decreases.
Choose the best definition and example of opportunity cost from the following options:
The cost of buying a house instead of investing in a business.
The cost of having a child instead of focusing on career advancement.
The cost of retiring early instead of working for a few more years.
The cost of buying a new car instead of saving for retirement.
Help Ava, David, and Abigail understand the differences between a mixed economy like Sweden and a traditional economy like some parts of Africa.
A mixed economy, like Sweden's, combines market and command economies, while a traditional economy, like in parts of Africa, is based on customs and traditions.
A mixed economy, like Sweden's, is based on customs and traditions, while a traditional economy, like in parts of Africa, combines market and command economies.
A mixed economy, like Sweden's, is government-controlled, while a traditional economy, like in parts of Africa, is driven by supply and demand.
A mixed economy, like Sweden's, is driven by supply and demand, while a traditional economy, like in parts of Africa, is government-controlled.
Why would a sole proprietorship be the best option for Samuel who is considering starting his own business?
A business with multiple owners sharing profits and losses.
A business with one owner who has total control, receives all profits, and is personally liable for all debts.
A business with one owner, but the profits are shared with the employees.
A business with multiple owners, but one person has the controlling interest.
How is scarcity addressed in a market economy like the United States?
The government decides what to produce, how to produce, and for whom to produce.
Scarcity is addressed by the invisible hand of the market, driven by supply and demand.
Scarcity is not an issue as resources are unlimited.
The government provides all the goods and services.
What is an installment loan?
An installment loan is a type of loan where the borrower makes regular payments over a period of time.
An installment loan is a type of loan where the borrower makes a single lump sum payment at the end of the term.
An installment loan is a type of loan where the borrower makes irregular payments based on their income.
An installment loan is a type of loan where the borrower makes no payments until the end of the term.
The state where Mark works is raising business taxes. What effect could this have on his job?
Mark's company might move to a state with lower taxes, which could threaten his job.
Mark might get a raise to offset the higher taxes.
More businesses might move into Mark's state due to the higher taxes, which could increase wages.
Higher business taxes won't affect Mark's job.
What is the customary APR on purchases after the initial 12 months according to the Credit Card Disclosure?
A. 36.5%
B. 27.357%
C. 18.25%
D. 5.65%
What is the annual fee for this card?
A. $0
B. $5
C. $29
D. $39
Marie is deciding whether to buy a car. What should she consider if she's making a rational decision?
If the car will depreciate over time.
The opportunity costs of her decision.
The car's price only.
The marginal costs and benefits of her decision.
What is the rate at which goods' prices increase and consumer purchasing power decreases over time?
Interest
Coupon Rate
Inflation
Sifting
Form for non-employee compensation, given to independent contractors or self-employed individuals
1099
1040
W-2
W-4
Who can be "claimed" on a tax return to reduce your taxable income?
Individual
Dependent
Independent
Child
How does the federal government encourage you to invest for retirement?
Provides tax breaks.
Offers a good interest rate.
Adds extra money to your account
Sends a reminder every 6 months.
Why should you start investing when young?
You don't have much money yet.
Your money has more time to grow.
Lower taxes for those under 30.
Higher earnings in early job market.
What is TRUE about Payroll Taxes?
Payroll taxes are paid on both earned and unearned income.
Payroll taxes fund federal government operations.
Payroll taxes fund Social Security and Medicare.
Tax amount increases as income increases.
