WorksheetsEconomics Final Review
Total questions: 25
Worksheet time: 13mins
Magda is financing her car with a loan. Which statement is accurate?
Her principal is the car cost minus any down payment
Her interest rate is the total cost after all payments
A shorter term means longer repayment time
Her monthly payment will likely be 4-5% of the car cost
Jaime is creating a budget. Should he use NET PAY or GROSS PAY?
Use net pay, it’s your earnings minus taxes and deductions.
Use gross pay, it’s your earnings minus monthly bills.
Use net pay, it’s your total monthly earnings.
Use gross pay, it is reported to the government for taxes.
What behaviors can prevent smart investing decisions?
Staying calm during market downturn
Buying low and selling high
Exiting the market because others are doing so
Investing in a diversified portfolio instead of trying to beat the market
Which statement about credit scores does the bar graph support?
Credit scores drop as you age due to potential missed payments
Young people find borrowing difficult due to less payment history
Young people likely have lower interest rates due to lower credit scores
Young people get loans at lower interest rates due to timely payments
Which is NOT a characteristic of a secured credit card?
Credit limit depends on your security deposit
They lower banks' risk for users with no credit history
They help build and improve your credit score
They don’t have a spending limit
How can your friend improve his low credit score?
Cancel credit cards
Make payments on time
Get a car loan
Check credit score
You bought 10 shares for $45 each and sold them for $80 each. What was your profit?
Loss of $800
Profit of $350
Loss of $450
Profit of $800
Which is true about fixed and adjustable-rate mortgages?
Fixed-rate mortgages have a constant payment but increasing interest rate
Fixed-rate mortgages have a fixed interest rate for a few years, then it fluctuates
Adjustable-rate mortgages have a fixed interest rate for a few years, then it fluctuates
Both mortgages work the same but are called different names depending on the institution
Which credit payback strategy leads to the highest overall cost?
Paying off your credit card bill in full every month
Paying 20% of your credit card balance every month on time
Making the minimum payment every month on time
Making the minimum payment every month with occasional late payment
Which of the following is NOT found in your credit report?
Credit payment history
Checking account balance history
Average age of credit accounts
Number of active credit accounts
Frank and Jasmere each need a $20,000 car loan. Frank's credit score is 730 and Jasmere's is 600. Which statement is TRUE?
Jasmere and Frank will pay the same amount for the loan
Frank's monthly payment will be about $100 more than Jasmere's
Jasmere's monthly payment will be about $100 more than Frank's
Lenders can't charge different interest rates based on credit scores
Who will pay the LEAST interest for their $1500 college purchases made with a credit card?
Stephan, who pays the first $1000 using graduation money and then pays $250 per month until the debt is $0
Jasmine, who pays off the whole balance once her bill comes
Nelson, who makes the minimum monthly payment each month until the debt is $0
Robert, who makes $300 payments per month until the debt is $0
Who tracks your credit information?
Credit reporting agencies
Federal government
Consumer Financial Protection Board
Lenders
Why are Target Date Funds beneficial for beginner investors?
A fund manager customizes your asset allocations
It guarantees enough money for retirement and requires minimal management
It automatically adjusts your assets over time
It minimizes risk by investing 50% in stocks and 50% in bonds
A shorter term loan will have __________ monthly payments and __________ total interest.
higher, less
higher, more
lower, less
lower, more
Which statement accurately describes a credit card characteristic?
Same payment is owed every month
Money must be deposited into a checking account for purchases
Full on-time payments every month avoid interest charges
They do not charge interest
Who from this list is saving rather than investing?
Yvonne, who puts $750 per month into her bank account
Danielle, who contributes 2% of her pay to her 401(k) plan
Daryl, who uses his $5000 bonus to buy Treasury bonds
Alexis, who buys $100 worth of shares in an S&P 500 index fund every month
What is the relationship between risk and return in an investment?
Lower return for high risk
Higher return for low risk
Higher return for high risk
Zero return for low risk
Geraldo invested in two mutual funds a year ago. ActiveFund20 had an average return of 7.0% per year with an annual fee of 1%. PassiveFund500 had an average return of 6.5% per year with an annual fee of 0.1%. Which investment had a better return for Geraldo after fees?
ActiveFund20: Overall return of 8.0%, PassiveFund500: Overall return of 6.6%
PassiveFund500: Overall return of 6.6%, ActiveFund20: Overall return of 8%
ActiveFund20: Overall return of 7.0%, PassiveFund500: Overall return of 6.5%
PassiveFund500: Overall return of 6.4%, ActiveFund20: Overall return of 6.0%
Why are payday loans easier to qualify for than traditional bank loans?
Payday loans are used by affluent households
Payday loans are another word for direct deposit
Payday loans require proof of employment or regular income
Payday loans are for small dollar amounts that no one cares if you repay
You see a credit card's APR is 9.99% - 23.99%. What does this mean?
Most cardholders pay the lowest rate listed
Your APR depends on your credit history
You want the highest APR to earn more
The APR on credit cards is usually fixed
Why is diversification a recommended investment strategy?
A diversified portfolio guarantees no loss
Diversification leads to lower fund manager fees
Diversification helps reduce risk
Diversification guarantees high returns
How does your credit score affect your financial well-being?
Only high scores get credit approval
Low scores get lower loan interest rates
Credit score determines loan approval and interest rate
No impact on financial situation
What is a brokerage account used for?
An online portal for appointments with a fund manager
Account for paying taxes on investment earnings
Account for buying and selling stocks, bonds, and funds
Special type of 401(k) plan offered by some employers
Hudson has an extra $250 per month. To minimize interest, which debt should he pay down first?
Car loan with a 6.9% interest rate
Credit card with a 19.7% interest rate
Private student loans with an 11.8% interest rate
Federal student loans with a 3.76% interest rate
