WorksheetsFinancial Literacy Quiz
Total questions: 25
Worksheet time: 8mins
What does "Non-sufficient funds" mean?
When a bank account has more money than needed
When a bank account has exactly enough money to cover a payment
When a bank account doesn't have enough money to cover a payment
A type of savings account
What are overdraft fees?
Fees for setting up a new bank account
Fees charged for maintaining a bank account
Fees for withdrawing money from an account
Penalty fees if you spend more than what's in your account
What is a savings account best used for?
To cover daily expenses
To set aside funds for a "rainy day"
To pay bills
To keep track of loans
What does the principle "Pay Yourself First" suggest?
Paying off debts before saving money
Putting money into your savings account before paying bills
Spending on leisure activities before saving
Investing money before saving
What is the principal in financial terms?
The interest earned on a loan
The total amount of money saved
The money originally lent to a borrower or put into an investment
The fees charged for financial services
What does FDIC insure?
Investments in stocks
Deposits at banks up to $250,000
Mutual fund investments
Credit Union deposits
What is the maximum amount NCUA insures for deposits at Credit Unions?
$100,000
$200,000
$250,000
$500,000
What are mutual funds?
Investments where you lend money to a company or government
Accounts that insure deposits at banks
Investments in a variety of assets, including money market accounts, bonds, and stocks
Money allocated for profit over time
What do you invest in when you purchase stocks?
Specific companies and get a share of their profits
A variety of assets
Money market accounts
Government bonds
What are bonds?
Investments in specific companies
Investments where you lend money to a company or government and get paid back at a specific time with interest
Insurance for bank deposits
Mutual funds
What do mutual funds help with in terms of investment strategy?
Reducing risk
Increasing risk
Guaranteeing returns
Diversifying
What does the Time Value of Money principle suggest?
Money in the future is worth more than now
Money now is worth the same as in the future
Money now is worth more than in the future
The value of money does not change over time
What is the difference between simple interest and compound interest?
Simple interest is calculated on principal and interest, while compound interest is only on principal
Simple interest is calculated only on interest, while compound interest is on principal and interest
Simple interest is calculated only on principal, while compound interest is on principal and interest
There is no difference; both are calculated on principal and interest
Who is the beneficiary in the context of an insurance policy?
The person who pays for the insurance
The insurance company
The person who receives the insurance money when policy funds are paid
The person who sells the insurance policy
What is insurance?
A savings account for future needs
A contract by which someone guarantees for a fee to pay someone else for a loss
A government benefit program
A loan provided by a bank
What does the term 'deductible' refer to in an insurance policy?
The bonus amount given to the insured after a claim
The monthly fee paid for the insurance
The first determined amount covered by the insured before your insurance pays, regardless of fault
The total amount the insurance policy will pay out
What does auto insurance specifically cover?
Home repairs
Vehicle accidents/injuries
Medical expenses for the insured
Education costs
What is disability insurance for?
Insurance for if you can't work
Insurance for vehicle damage
Life insurance for the elderly
Insurance for travel purposes
What does whole life insurance guarantee?
Payment only if the insured person has an accident
Payment to the beneficiary in the event of the insured's death, with a policy for the whole life
A fixed amount of money after retirement
A refund of all premiums if the insured person survives the policy term
What does Term Life Insurance provide?
Coverage for medical expenses
Payment to a beneficiary upon the insured's death, for a # of years
Protection against property damage
Avoidance of risk
What is covered by Health Insurance?
Damage to home or land
Payment to a beneficiary upon the insured's death
Loss by illness or bodily injury
Reduction of risk severity
What does Homeowner/Renter/Property Insurance cover?
Medical expenses
Payment to a beneficiary upon the insured's death
Damage to home or land from disasters like fire, flood, and earthquakes
Transfer of risk to another party
What is the purpose of insurance?
To increase risk by paying a premium
To transfer risk after paying a premium
To eliminate all financial risks
To diversify investments
What does diversification in investments mean?
Investing all money in one place
Spreading investments over different areas to reduce risk
Paying a premium to an insurance company
Avoiding any kind of investment to reduce risk
What is an insurance premium?
The reward for making safe investments
The interest rate on an insurance loan
The payment to the insurance company for an insurance policy
A fixed amount paid by the insured when a claim is made
