WorksheetsPersonal Finance Final Review
Total questions: 81
Worksheet time: 41mins
Name
Class
Date
1.
You earn a salary of $40,000 per year and decide to save 20% of your gross pay. You set a goal of creating a $16,000 emergency fund. How long will it take for you to achieve your goal?
a)
6 months
b)
1 year
c)
2 years
d)
3 years
2.
You are interested in renting an apartment after graduating college. You meet with the landlord and complete the application. All of the following may need to be provided when you sign your lease EXCEPT
a)
Proof of employment
b)
A bank account
c)
First and last month's rent
d)
A security deposit
3.
You're considering moving into a 3 bedroom apartment with 2 roommates, rather than living on your own post-college. Which of your expenses would likely NOT decrease by having roommates?
a)
Groceries and eating out
b)
Rent
c)
Cell phone bill
d)
Furniture
4.
You overhear your cousin talking about the importance of creating and sticking to a budget. All of the following are good reasons to create and stick to a budget EXCEPT:
a)
A budget can help you identify any bad spending habits
b)
Using a budget can allow you to work towards your financial goals
c)
Having a budget can help you create an emergency fund
d)
Having a budget is a requirement for obtaining a mortgage
5.
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
6.
Which statement accurately describes how the 50/20/30 Rule would break down your take-home pay?
a)
50% on wants, 20% on saving, and 30% on needs
b)
50% on saving, 20% on needs, and 30% on wants
c)
50% needs, 20% on saving, and 30% on wants
d)
50% on saving, 20% on wants, and 30% on needs
7.
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
c)
Aunt Tina and her family have high paying jobs and don’t worry much about money
d)
Aunt Tina only receives paper paychecks instead of direct deposit
8.
Jocelyn gets a text alert from the bank that her account balance has dropped below $100 after a series of $20 ATM withdrawals. She has not used her ATM in over a week and wonders what she should do. What would you recommend?
a)
Wait until her monthly statement arrives so she can check to see if those withdrawals are still there
b)
Wait a week as it is fairly common for the bank to catch mistakes like this
c)
Check her wallet to be sure her debit card has not been stolen. If she still has it, then she should not worry.
d)
Contact her bank immediately as it appears that her account may have been hacked
9.
FDIC Insurance is...
a)
Optional coverage consumers can purchase so that their bank deposits remain safe
b)
Insurance bank branches can buy to protect their business against fraud and scams
c)
Required if you want to do online or mobile banking
d)
Protection for bank customers’ deposits up to $250,000, guaranteeing their money is still available if the bank goes out of business
10.
How often do customers typically receive a bank statement for their checking account?
a)
Daily
b)
Weekly
c)
Monthly
d)
Annually
11.
Interest is the price paid for using someone else's money. It can be good or bad.
a)
True
b)
False
12.
You are at the checkout counter at the local supermarket and use your credit card to pay for your groceries. Where does the money for this purchase come from?
a)
Your credit card company covers the cost
b)
It is deducted directly from your checking account
c)
Your credit card company provides you with a cash advance to cover the cost
d)
It is deducted directly from your savings account
13.
Fees charged if you withdraw more money from your account than is available.
a)
Overdraft Fee
b)
ATM fee
c)
Minimum Balance Fee
14.
Fee charged if you have less in your account than the bank's requirement.
a)
Overdraft Fee
b)
ATM fee
c)
Minimum Balance Fee
15.
Fee charged for using an ATM that belongs to another depository institution.
a)
Overdraft Fee
b)
ATM fee
c)
Minimum Balance Fee
16.
Which is more important, Income or Net Worth?
a)
Income
b)
Net Worth
17.
How do you calculate net worth?
a)
Assets + Liabilities
b)
Assets - Liabilities
18.
Pick the three different types of check endorsements.
a)
Special
b)
Blank
c)
Restrictive
d)
Normal
e)
Forwarded
19.
Why would transactions completed on the last day of the month be “outstanding” on the bank statement?
a)
The bank declined them
b)
They are standing outside the bank
c)
There isn't enough money in your account to cover them
d)
They have not been cleared through by the bank yet.
20.
Magda is going to finance her car purchase using an auto loan. Which statement below is accurate?
a)
Her principal is the cost of the car, minus any down payment she makes
b)
Her interest rate is the total cost she’ll pay after making all of her principal and interest payments
c)
Choosing a shorter term means it will take her longer to repay the loan
d)
It’s likely that her monthly payment will be between 4-5% of the cost of the car
21.
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
22.
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
23.
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
24.
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
25.
Elaine just accepted a new job and is working with the company’s HR department to fill out paperwork. Which of the following steps is she responsible for?
a)
Determine how much tax to withhold from her paychecks based on W-4 information
b)
Complete a W-4 form
c)
Send withholding amounts to the federal government
d)
Complete a W-2 form
26.
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
27.
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 federal income tax of $4768.50
d)
Lily works in the same city that Avia Consulting is based in
28.
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
29.
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
30.
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
31.
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
32.
Grayson has a job interview tomorrow. Which of the following would be the BEST advice to give him?
a)
Avoid asking questions during the interview since it will show that he may not know something about the company
b)
Be sure to ask about things like vacation 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)
Conduct research on the company ahead of time to understand how his values and beliefs align with the company’s mission
33.
During an interview, if you've had a bad experience at a previous job, what should you do rather than speak negatively about that organization?
a)
Speak about what you learned in that role
b)
Avoid discussing your previous job altogether
c)
Make up a positive story about your previous job
d)
Speak negatively about your coworkers, but not your boss
34.
The average APR for a payday loan is closest to …
a)
4%
b)
14%
c)
40%
d)
400%
35.
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
36.
When loans are amortized, monthly payments are _______ , while the amount of your monthly payment applied to interest ________ and the amount of your monthly payment applied to the principal _______ over time.
a)
Constant, Increases, Increases
b)
Constant, Decreases, Increases
c)
Variable, Decreases, Increases
d)
Variable, Decreases, Decreases
37.
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
38.
Taylor is about to go car shopping, and she has $5000 saved that she can use for a down payment while still having extra cash in her emergency fund. She expects the exact model car she’s looking for to cost $35,000. If her top priority is having the lowest monthly payments possible, which advice should she follow?
a)
Put in $0 for your down payment, and choose a loan with a short term length
b)
Put in $2500 for your down payment, and choose a loan with a short term length
c)
Put in $3500 for your down payment, and choose a loan with a long term length
d)
Put in $5000 for your down payment, and choose a loan with a long term length
39.
A loan with a shorter term length will have __________ monthly payments, and you will pay __________ in total interest.
a)
higher, less
b)
higher, more
c)
lower, less
d)
lower, more
40.
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
41.
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
42.
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
43.
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 one of the following statements could explain this difference?
a)
Amy chose a shorter term for her mortgage, so her monthly payments are higher
b)
Amy made a larger down payment, so her monthly payments are also larger
c)
Chuck chose a shorter term for his mortgage, so his monthly payments are also lower
d)
Chuck has a lower credit score, so his interest payments are also lower
44.
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
45.
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
46.
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
47.
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
48.
In which scenario would you be MOST likely to use pre-prepared conversation starters?
a)
Uploading a recording of yourself to a job board
b)
Introducing yourself to a hiring manager at a career fair
c)
Sending a follow-up email to someone you've formally interviewed with
d)
When writing your resume and cover letter
49.
What is the purpose of a resume?
a)
To list all of your interests
b)
To highlight your work experience and qualifications
c)
To provide a list of references
d)
To show off your social media profiles
50.
In the first paragraph of a cover letter, you should do all of the following, EXCEPT…
a)
Show interest in the company
b)
Identify the position to which you are applying
c)
State how you learned about the job opening
d)
Explain why you left your previous job
51.
Which of the following statements about careers is generally TRUE?
a)
Your first job determines the rest of your career path
b)
Hard skills are more important than soft skills to employers
c)
The same skill set can be applied in different jobs
d)
College is the only way to learn hard skills
52.
Jaime is creating a budget for the first time and doesn’t know which to use - NET PAY or GROSS PAY. What do you tell him?
a)
“Use net pay, because it’s the total amount you’ve earned minus taxes and other deductions.”
b)
“Use gross pay, because it’s the total amount you’ve earned minus any recurring bills you owe for the month.”
c)
“Use net pay, because it’s the total amount you’ve earned for the month.”
d)
“Use gross pay, because that is the amount that is reported to the government for taxes.”
53.
Why is sending a personalized thank you after a job interview important?
a)
It shows that you want the job even if you don’t really like the company
b)
You can apologize for any mistakes you made in the interview
c)
It gives you the opportunity to leave a good impression by expanding on an answer you gave or a topic you discussed
d)
It allows you to boast about your accomplishments one last time
54.
Zoe buys three new lipsticks from a store at the mall. Which payment method would directly reduce the amount of money in her checking account?
a)
Pays with a prepaid card she loaded earlier in the month
b)
Uses her credit card and says, "Credit" when the cashier asks, "Credit or debit?"
c)
Uses her debit card and says, "Credit" when the cashier asks, "Credit or debit?"
d)
Pays with cash she had in her purse
55.
Which of the following best describes the amount of money you'll have if you put $1000 into a savings account earning 1% annual compound interest for 10 years? You can ignore the impact of inflation in this question.
a)
Exactly $1100
b)
Slightly more than $1100
c)
$2000
d)
Exactly $11,000
56.
All of the following can be found in your credit report EXCEPT…
a)
Your credit payment history
b)
Your checking account balance history
c)
The average age of your credit accounts
d)
Your total number of active credit accounts
57.
Suppose you are trying to switch banks or open a brand new credit card. Which strategy will likely lead to the WORST long-term outcome?
a)
Look for sign-up bonuses or introductory offers that will make the product a good deal
b)
Read online reviews carefully, and consider those that align most closely to what you value
c)
Spend some time comparison shopping before finalizing your decision
d)
Review the fine print closely, paying close attention to fee structures and interest rates
58.
These high school seniors each bought $1500 of stuff to bring to college with them in the fall. Each one used a credit card with similar terms to make their purchases. Who will pay the LEAST interest for their purchases?
a)
Stephan, who pays the first $1000 using graduation money and then pays $250 per month until the debt is $0
b)
Jasmine, who had saved the $1500 previously and pays off the whole balance once her bill comes
c)
Nelson, who makes the minimum monthly payment each month until the debt is $0
d)
Robert, who makes $300 payments per month until the debt is $0
59.
Which person from this list is saving rather than investing?
a)
Yvonne, who puts $750 per month into her bank account earning 1% interest
b)
Danielle, who contributes 2% of her pay to her company's 401(k) plan
c)
Daryl, who uses his $5000 end-of-year bonus to buy Treasury bonds
d)
Alexis, who buys $100 worth of shares in an S&P 500 index fund every month
60.
What information is typically included in a resume?
a)
References and recommendations
b)
Personal statement and career goals
c)
Education, experience, and work skills
d)
Introduction and personal story
61.
Laura is a high school student who has a part-time job at a department store. All of the following options will be deducted from her paycheck EXCEPT...
a)
Medicare
b)
Federal taxes
c)
Overdraft fees
d)
Social Security
62.
Jay asks his friends for advice: "Should I start doing mobile banking now that I've got my new smart phone?" Which friend is correct in their statement on the benefits of mobile banking?
a)
It's so convenient, because you can deposit your check using your phone's camera and the bank's app
b)
One major pro of mobile banking is that they typically waive all of the normal fees like overdraft fees, ATM fees, insufficient funds fees…
c)
One inconvenience is that once you set up mobile banking on your phone, you can't use online banking on your computer any more
d)
A con of mobile banking is that typically banks charge you a $10-15 set-up fee in addition to a small monthly fee (~$3) for mobile banking privileges
63.
Maura has started a full-time job as an accountant at a nonprofit organization. Which tax paperwork is she likely to receive during her first week on the job?
a)
A Medicaid enrollment form
b)
A W-4 form
c)
A 1040 form
d)
A W-2 form
64.
You have $3000 per month to cover your expenses. You estimate your monthly costs to be rent of $1200, car expenses of $700, utilities of $200, insurance of $300, food of $400, student loans of $800, and going out with friends of $200. What is the end result?
a)
A budget deficit of $800
b)
A budget surplus of $800
c)
A total budget of $6800
d)
$0
65.
Comparison shopping is the practice of...
a)
Comparing a product you bought a year ago to an updated version that is available now
b)
Comparing the quality of a product you bought to the quality of a similar product your friend bought
c)
Comparing the prices of two unrelated products you need to purchase
d)
Comparing various factors of the same product offered by different retailers before making a purchasing decision
66.
What is one step you can take to protect yourself from identity theft?
a)
Check your bank statements each month to verify that all transactions are accurate
b)
Log into your bank's mobile app using a public WiFi network
c)
Throw away expired bank account cards and documents without shredding them
d)
Use websites that start with "http" instead of "https"
67.
Hudson always makes the minimum monthly payments on all of his debts, on time. He receives a raise at work which gives him an extra $250 per month in take-home pay. If his primary goal is to minimize the amount of interest he'll pay over the lifetime of his debts, which debt should he pay down most quickly using his increased pay?
a)
His car loan with a 6.9% interest rate
b)
His credit card with a 19.7% interest rate
c)
His private student loans with an 11.8% interest rate
d)
His Federal student loans with a 3.76% interest rate
68.
How does investing in the stock market differ from putting money in a savings account at a bank?
a)
Investing is always a less risky option than saving
b)
Investing is best for short-term situations like emergency funds; saving is best for the long-term
c)
Investing typically earns between 1-2% while saving generally earns between 5-7%
d)
Investing allows you to accumulate wealth for retirement while saving is best for short-term purchases or emergencies
69.
Which of the following statements is TRUE about compound interest?
a)
Compound interest is difficult to calculate, so those who use it earn higher profits for their efforts
b)
Compound interest means you have a fund manager who is compounding your returns without charging a fee
c)
Compound interest allows you to earn interest not only on the amount you have saved, but also on the interest you've already earned
d)
Compound interest directly impacts how much you will be charged in fees
70.
What kinds of behaviors can PREVENT people from making smart investing decisions?
a)
Staying calm when the market is experiencing a downturn
b)
Buying stocks when prices are low and selling them when they’re high
c)
Exiting the market because that’s what everyone else is doing
d)
Investing in a diversified portfolio instead of trying to beat the market
71.
Daniel has saved $2,000 in a savings account that earns 0.5% interest annually. What will most likely happen to the purchasing power of his savings over time?
a)
His purchasing power will DECREASE because the interest rate is lower than the historical rate of inflation
b)
His purchasing power will INCREASE because the interest rate is higher than the historical rate of inflation
c)
His purchasing power will INCREASE because the interest will compound faster than the historical rate of inflation
d)
His purchasing power will remain the SAME because the interest rate is the same as the historical rate of inflation
72.
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 StreamingVideoCo didn't pay a dividend and that you didn't incur any trading fees during that period.)
a)
Loss of $800
b)
Profit of $350
c)
Loss of $450
d)
Profit of $800
73.
Which of the statements below BEST describes the relationship between risk and return when considering an investment?
a)
Investors expect to earn a lower return when they invest in a high risk asset
b)
Investors expect to earn a higher return when they invest in a low risk asset
c)
Investors expect to earn a higher return when they invest in a high risk asset
d)
Investors expect to earn zero return when investing in a low risk asset
74.
Why is diversification a recommended investment strategy?
a)
Investing in a diversified portfolio guarantees that you won’t lose money with your investments
b)
If you tell your fund manager to use diversification, they’ll charge you lower fees
c)
Diversifying your portfolio helps reduce risk
d)
If you diversify your portfolio, you will definitely earn a high return
75.
How is a bond different from a stock?
a)
A bond is a loan you give to an organization while a stock is partial ownership in a company
b)
Bonds are typically riskier than stocks but have the potential to earn higher returns
c)
Bonds are usually issued by smaller startup companies while stocks are issued by well established organizations
d)
Bonds are best for earning high returns while stocks are best for providing a stable source of income
76.
An actively managed mutual fund…
a)
Generally has lower fees than a passively managed index fund
b)
Is managed by a fund manager who charges a fee
c)
Always performs better than an index fund
d)
Is a mix of two types of stocks and two types of bonds to diversify your portfolio
77.
How can someone make money from investing in a stock?
a)
They sell the stock for a lower price than what they bought it for
b)
They receive dividends or they sell the stock at a higher price than what they bought it for
c)
The stock loses value but the overall market experiences a positive return
d)
They sell the stock for the same price they bought it for
78.
Why is it important for you to understand your risk tolerance before you start investing?
a)
It helps you decide if you want to participate in your employer’s match program for your 401(k)
b)
It’s recommended that people with a low risk tolerance shouldn’t invest at all
c)
If you have a high risk tolerance, you may be eligible for lower fees since you won’t care if your portfolio drastically loses value
d)
You should tailor your investment portfolio so that it assumes an amount of risk you are comfortable with
79.
Katrina works for Penny's Pickles, which offers a 401(k) match for up to 3% of her salary, which is $65,000 per year. In her budget, she only has $150 per month available to save for retirement. What should she do?
a)
Opt out of the 401(k) plan since she doesn’t have much to contribute; use the money elsewhere in her budget
b)
Contribute $75/mo to her 401(k) and $75/mo to an IRA, so that she's diversified
c)
Save the $150/mo in a bank account until she has enough to max out her 401(k), and then invest
d)
Contribute the full $150/mo to the 401(k) because her company will match that full amount, "doubling" her investment every month
80.
As a shareholder in a public company, what are the benefits available to you?
a)
You may receive dividends from the company, if the company pays them, and you have ownership of a portion of the company
b)
You must receive dividends from the company (all companies must pay them) and you can select members of the management team (e.g., the Chief Executive Officer (CEO))
c)
You can select members of the management team [e.g., the Chief Executive Officer (CEO)] and vote for members of the Board of Directors
d)
You have ownership of a portion of the company and receive coupon payments from the issuer
81.
You buy a bond with a fixed coupon rate of 5%. A year later, similar bonds that are issued have a coupon rate of 3%. Which of the following is TRUE?
a)
The price of your bond will increase
b)
The demand for your bond will decrease
c)
The price of your bond will stay the same
d)
The interest rate for your bond will fall to 3%
100 %
