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WorksheetsFinancial Literacy Final Review
Total questions: 68
Worksheet time: 37mins
If Jonah wasn't saving his paycheck for college, he would use it to buy a used car. What concept does the used car represent for Jonah?
Need
Want
Fixed expense
Variable expense
What is the difference between a "need" and a "want"?
A need is something essential for survival, while a want is something desired but not essential.
A need is something desired but not essential, while a want is something essential for survival.
A need is a luxury item, while a want is a basic necessity.
A need is something you can live without, while a want is something you cannot live without.
What is a fixed expense?
An expense that varies each month.
An expense that remains the same each month.
An expense that is paid annually.
An expense that is optional.
What are the advantages of having a high credit score?
Higher interest rates on loans.
Lower interest rates on loans.
Difficulty in getting approved for credit.
Higher insurance premiums.
How can you determine whether you are on track to meet your financial goals?
By ignoring your budget.
By regularly reviewing your budget and financial statements.
By spending more than you earn.
By not saving any money.
What is an emergency fund?
Money set aside for regular expenses.
Money set aside for unexpected expenses.
Money set aside for vacations.
Money set aside for entertainment.
What are some strategies to avoid late fees and negative impacts to your credit score?
Paying bills on time and setting up automatic payments.
Ignoring bills and paying them whenever convenient.
Only paying the minimum amount due.
Using cash for all transactions.
What is a variable expense? Give an example.
An expense that remains the same each month; e.g., rent.
An expense that varies each month; e.g., utility bills.
An expense that is paid annually; e.g., insurance.
An expense that is optional; e.g., entertainment.
What are the disadvantages of being a salaried employee?
No fixed income.
No benefits.
No overtime pay.
No job security.
When is an employer required to pay overtime?
When an employee works more than 30 hours a week.
When an employee works more than 40 hours a week.
When an employee works on weekends.
When an employee works on holidays.
What form does an employee use to determine how much should be withheld from their pay for income taxes?
W-2
W-4
1040
1099
What is gross pay?
Pay after taxes and deductions.
Pay before taxes and deductions.
Pay received in cash.
Pay received as a bonus.
Which benefit typically costs an employer the most to provide to their employees?
Paid time off
Health insurance
Retirement plans
Direct deposit
What is direct deposit?
A method of payment where funds are electronically transferred to an employee's bank account.
A method of payment where funds are given in cash.
A method of payment where funds are sent via check.
A method of payment where funds are transferred to a prepaid card.
What is net pay?
Pay before taxes and deductions.
Pay after taxes and deductions.
Pay received in cash.
Pay received as a bonus.
What is a voluntary deduction from your pay? Give an example.
A deduction required by law; e.g., income tax.
A deduction chosen by the employee; e.g., retirement contributions.
A deduction for health insurance premiums.
A deduction for social security.
What is paid time off (PTO)?
Time off without pay.
Time off with pay.
Time off for holidays only.
Time off for sick leave only.
What type of depository institution is likely to have hundreds of branches throughout the United States?
Credit union
Community bank
National bank
Online bank
What are some benefits of debit cards?
They allow you to borrow money.
They help you build credit.
They provide easy access to your funds and help you avoid debt.
They offer rewards points.
What are some benefits of using electronic fund transfers?
They are slow and unreliable.
They are fast, secure, and convenient.
They require physical presence.
They are only available during business hours.
What is NOT a typical fee financial institutions charge?
Overdraft fee
Monthly maintenance fee
ATM fee
Interest fee
What is a revolving loan? Give an example.
A loan that must be paid in full each month; e.g., mortgage.
A loan with a fixed repayment schedule; e.g., car loan.
A loan that allows you to borrow up to a certain limit and pay it back over time; e.g., credit card.
A loan that is paid off in one lump sum; e.g., payday loan.
What is a secured loan? Give an example.
A loan that does not require collateral; e.g., personal loan.
A loan that requires collateral; e.g., mortgage.
A loan with a high interest rate; e.g., payday loan.
A loan with a variable interest rate; e.g., credit card.
What is a credit card's grace period?
The time during which you can pay your balance without incurring interest.
The time during which you can use your card without making payments.
The time during which your card is inactive.
The time during which your card has a lower interest rate.
What is credit utilization?
The total amount of credit available to you.
The amount of credit you are currently using compared to your credit limit.
The number of credit cards you have.
The interest rate on your credit cards.
What is the best way to defend against fraudulent charges to your credit card?
Ignoring your credit card statements.
Regularly monitoring your credit card statements and reporting any suspicious activity.
Using your credit card for all purchases.
Sharing your credit card information with others.
What type of investment offers the highest risk and the highest reward?
Savings account
Government bonds
Stocks
Certificates of deposit (CDs)
What level of risk is involved in investing in US government bonds?
High risk
Moderate risk
Low risk
No risk
What is diversification?
Investing all your money in one type of asset.
Spreading your investments across different types of assets to reduce risk.
Investing only in high-risk assets.
Avoiding investments altogether.
What is compounding interest? Why is it important?
Interest calculated on the initial principal only; it is important because it does not grow your investment.
Interest calculated on the initial principal and also on the accumulated interest; it is important because it helps your investment grow faster.
Interest that decreases over time; it is important because it reduces your debt.
Interest that is paid annually; it is important because it provides a steady income.
What is a defined benefit pension plan?
Which retirement plan provides no up-front tax benefit but allows contributions and earnings to be withdrawn tax free during retirement?
Traditional IRA
401(k)
Roth IRA
Pension plan
Give an example of a government sponsored retirement plan?
401(k)
Roth IRA
Traditional IRA
Social Security
What does a full warranty cover?
Only parts of a product.
Only labor costs.
Both parts and labor costs.
Only accidental damage.
Where would you find the unit price of a product?
On the product's packaging.
On the store's receipt.
On the product's label or shelf tag.
On the product's warranty.
What is depreciation?
The increase in value of an asset over time.
The decrease in value of an asset over time.
The interest earned on an investment.
The profit made from selling an asset.
What is the difference between buying and leasing a vehicle?
Buying involves making monthly payments, while leasing involves a one-time payment.
Buying means you own the vehicle, while leasing means you rent the vehicle for a specific period.
Buying is always cheaper than leasing.
Buying requires a higher credit score than leasing.
Give examples of fees that you may receive on new vehicle sales.
Registration fees, dealer fees, and sales tax.
Registration fees, dealer fees, and income tax.
Registration fees, dealer fees, and property tax.
Registration fees, dealer fees, and utility fees.
What type of housing is always rented?
Condominium
Single-family home
Apartment
Townhouse
According to many financial planners, what is the most that you should spend on rent?
10% of your income
20% of your income
30% of your income
40% of your income
How will having a good credit score help you if you are trying to buy a house?
It will increase your down payment
It will lower your interest rate
It will extend your loan term
It will increase your monthly payments
What is worker's compensation?
A retirement benefit
A health insurance plan
A form of insurance providing wage replacement and medical benefits to employees injured in the course of employment
A bonus given to employees for good performance
How old must you be to receive Medicare benefits?
55
60
65
70
What type of insurance combines life insurance with a savings account?
Term life insurance
Whole life insurance
Health insurance
Auto insurance
What factors do insurers typically consider when determining how much to charge for life insurance?
Age, health, and lifestyle
Job title, education, and marital status
Number of children, home ownership, and car model
Travel history, hobbies, and social media activity
What are the 5 Cs of credit?
Character, Capacity, Capital, Collateral, Conditions
Credit, Cash, Collateral, Conditions, Capacity
Character, Cash, Capital, Conditions, Credit
Capacity, Capital, Conditions, Credit, Cash
Define credit.
Money given as a gift
A loan that must be repaid with interest
A form of investment
A type of savings account
What are the 3 major credit reporting agencies?
Equifax, TransUnion, Experian
Equifax, TransUnion, FICO
Experian, FICO, TransUnion
Experian, Equifax, FICO
What is the range of FICO credit scores?
200-800
300-850
400-900
500-950
What is considered a poor FICO score?
Below 500
Below 600
Below 700
Below 800
What is considered an excellent FICO score?
Above 600
Above 700
Above 750
Above 800
What makes up the largest percentage of how your credit score is determined?
Payment history
Length of credit history
Types of credit used
New credit
Why do websites track your online activity?
To improve user experience and target advertisements
To increase website loading speed
To reduce server costs
To prevent users from accessing the site
What are the signs of identity theft?
Unfamiliar charges on your credit card
Receiving promotional emails
Slow internet connection
Frequent password changes
What is phishing?
A type of fishing technique
A method of cooking fish
A cyber attack to steal personal information
A way to improve internet speed
If your credit card were stolen, who would you report it to?
The police
The credit card issuer
Your employer
The bank
What are the 4 pieces of information a thief needs to steal your identity?
Name, address, phone number, email
Name, Social Security number, date of birth, address
Name, bank account number, phone number, email
Name, driver's license number, phone number, email
What is vishing?
Voice phishing
Video phishing
Visual phishing
Virtual phishing
What is an insurance deductible?
The amount you pay out of pocket before insurance covers the rest
The total cost of the insurance policy
The monthly premium you pay for insurance
The amount the insurance company pays you
What concept is insurance based upon?
Risk management
Investment growth
Savings accumulation
Wealth distribution
What is an insurance premium?
The amount you pay for an insurance policy
The amount the insurance company pays you
The deductible amount
The total coverage amount
What does uninsured/underinsured motor vehicle insurance provide coverage for?
Damage to your vehicle from natural disasters
Medical expenses and damages caused by a driver with insufficient or no insurance
Routine maintenance and repairs
Theft of your vehicle
Why do homeowners have to purchase homeowner's insurance?
To cover the cost of home improvements
To protect against financial loss from damage or liability
To increase the value of their home
To qualify for a mortgage
Why do governments levy taxes?
To control inflation
To fund public services and infrastructure
To reduce unemployment
To increase exports
What is the largest source of federal revenue?
Corporate taxes
Sales taxes
Income taxes
Property taxes
What tax do local governments rely on most?
Income tax
Sales tax
Property tax
Corporate tax
What is the standard form individuals use to file their federal income tax?
Form 1040
Form W-2
Form 1099
Form 940
Match the following
Income
The money a person gets from a job or for performing a service
Savings
Money that is set aside for later use
Expenses
Items that use up one's income
Budget
A plan for tracking a person's income and expenses.
