WorksheetsFinancial Literacy Final Exam Review
Total questions: 50
Worksheet time: 2hrs 39mins
Name
Class
Date
1.
1. What are the two most important factors in calculating your credit score?
a)
Payment history and types of accounts
b)
Amounts owed and length of credit history
c)
Payment history and total debt
d)
Length of credit history and new credit inquiries
2.
2. Heather realized she has taken out too much debt and it has started to negatively impact her ability to budget. She has decided to pay off this debt in full as soon as possible. All of the following would be beneficial strategies EXCEPT…
a)
Reducing spending by canceling some of her streaming subscriptions
b)
Taking extra shifts at work to increase her income
c)
Making more than the minimum required payment on her debt
d)
Applying for another credit card to use in case she runs out of cash paying off her debt
3.
3. How can your credit score impact your financial well-being?
a)
Only consumers with high scores are approved for credit
b)
Consumers with low scores get lower interest rates on loans than those with high scores
c)
Your credit score can determine whether you are approved for a loan and what the interest rate on that loan will be
d)
It generally has no impact on your financial situation
4.
4. Frank and Jasmere are each shopping for a new car for themselves. Each will need a $20,000 loan that they will pay back over a five year period. Frank has a credit score of 730 and Jasmere has a score of 600. Which of the following statements is TRUE?
a)
Over the five year period, Jasmere and Frank will pay the same amount for the car loan
b)
Frank's monthly payment on the auto loan will be about $100 more than Jasmere's payment
c)
Jasmere's monthly payment on the loan will be about $100 more than Frank's payment
d)
Lenders are not allowed to charge people different interest rates based on their credit scores
5.
5. Which of the following could have a NEGATIVE impact on your credit score if done in a short period of time?
a)
Paying your bills on-time
b)
Paying down balances on your credit card accounts
c)
Decreasing your utilization of credit
d)
Applying for multiple credit cards
6.
6. Which of these represents a potential consequence of neglecting to pay your federal student loans?
a)
Wages or tax refunds can be garnished
b)
Passport revocation
c)
Driver’s license suspension
d)
Termination from your job
7.
7. What benefits do you receive by taking out a loan with a cosigner?
a)
You don’t get penalized for late payments
b)
You get a discount on future loans after this one is paid off
c)
You have a better chance of getting approved and getting a lower interest rate if the cosigner has good credit
d)
You automatically get the same credit score as the cosigner once the loan is paid off
8.
8. Review this partial credit report, and then choose the response below that accurately depicts the information on the report.
a)
The borrower paid a $30 fee in February 2015
b)
This borrower was never late with any of their credit payments
c)
This borrower's most recent payment was $30
d)
This borrower was 30 days late on their May 2015 payment
9.
9. All of the following would show up on a credit report, EXCEPT...
a)
Salary of your current job
b)
Payment history of your car loan
c)
Credit card payment history
d)
Student loan activity
10.
10. 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 and Mastercard
c)
Credit card companies provide you with a monthly statement, while debit cards do not
d)
With debit cards, you are spending your own money, but with credit cards you're getting a loan that you need to pay back later
11.
11. Which of the following is most likely to represent a fixed rate, secured debt?
a)
A student loan
b)
A credit card
c)
An auto loan
d)
A prepaid debit card
12.
12. Which of the statements best explains why it is a good idea to pay more than the monthly amount on an amortized loan?
a)
Every time you pay extra, the lender will reduce the interest rate
b)
The extra payment will be applied to the principle, which will let you pay down the loan quicker
c)
The extra payment will be applied to the interest, which will reduce the overall cost of the loan
d)
Amortized loans typically have higher interest rates than credit cards, so they are the best place to put extra cash.
13.
13. A loan with a longer term will have ___ monthly payments, and you will pay ____ in total interest
a)
higher, less
b)
higher, more
c)
lower, less
d)
lower, more
14.
14. Select the statement below that accurately describes a characteristic of a credit card.
a)
You owe the same payment each month
b)
You must have money deposited into a checking account to use the credit card for purchases
c)
Making full payments on time every month is the only way to avoid interest charges
d)
The do not charge interest
15.
15. 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 the 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
16.
16. An excellent credit score will help in which aspect of car financing?
a)
Bargaining for a great sales price
b)
Receiving a large downpayment
c)
Qualifying for a low interest rate
d)
Having a wide selection of term lengths
17.
17. George has a credit card with a $1000 credit limit. His outstanding balance is $700. What is the maximum amount that he can now spend on the credit card?
a)
300
b)
$700
c)
$500
d)
$1700
18.
18. Which of the following is the most effective strategy for personal savings?
a)
Wait until the end of the month and save whatever is left in your checking account.
b)
Save a certain percentage of each paycheck and deposit it directly into a savings account
c)
Cover all of your wants and needs and save whatever is left
d)
Take out a payday loan so you can save before you receive your paycheck
19.
19. You are at the checkout counter of the local grocery store and use your debit card to pay. Where does the money 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
20.
20. Which of the following transactions will REDUCE your checking account balance immediately?
a)
Using your debit card to pay for groceries at the supermarket
b)
Using your credit card to pay for your school books
c)
Writing your monthly rent check which you will mail tomorrow
d)
Depositing your check at a local bank branch
21.
21. Which of the following is an advantage of online banking?
a)
Once you set up online banking, your bank will waive overdraft, ATM, and monthly fees
b)
Using online banking allows you to earn a higher interest rate
c)
Using online banking you can request transfers, pay bills and automate your savings without going to the bank
d)
You can only shop online if your bank account has online banking features
22.
22. Which of the following is a reason to use a savings account rather than a checking account?
a)
Easy access to funds for daily transactions
b)
Unlimited check writing priveledges
c)
Higher interest rates on deposits
d)
Lower minimum balance requirements
23.
23. All of the following are benefits of using a checking account EXCEPT for
a)
Multiple options for using funds for payments
b)
Checking accounts act as a good savings vehicle
c)
Access to cash via ATMS
d)
Your money is protected by the FDIC
24.
24. The federal government makes interest payments on __?__ while you are enrolled in school at least half time, for the first 6 months after you leave school and during any period of deferment.
a)
Work Study
b)
Subsidized federal loans
c)
Unsubsidized federal loans
d)
Grants
25.
25. How much does it cost to fill out the FAFSA form?
a)
It is free
b)
It is free the first time, but costs $9.99 each year after
c)
It is 2% of the loan amount
d)
$50
26.
26. Which statement accurately describes the difference between a student loan and a scholarship or grant?
a)
Student loans always come from the federal government, while scholarships and grants always come from the college
b)
Student loans are a result of completing the FAFSA, while scholarships and grants are a result of winning contests
c)
Student loans are only available to a select few college students each year, while scholarships and grants are plentiful and easy to get
d)
Student loans need to be repaid, while scholarships and grants are both "gift aid" that don't need to be repaid
27.
27. What is an insurance premium?
a)
Your monthly payment to your insurer, regardless of whether you use the services
b)
A list of the procedures covered by your insurance carrier
c)
An added cost you pay in order to receive higher quality service
d)
The amount you pay out of pocket for a specific procedure or service
28.
28. Which term refers to the percentage of covered medical expenses you are responsible for paying after your deductible has been met?
a)
Deductible limit
b)
Premium
c)
Co-Insurance
d)
Out-of-network fees
29.
29. How do insurance companies make money?
a)
Refusing to pay out claims to policyholders
b)
Collecting money from the government
c)
Collecting more in premiums than they need to pay out each year
d)
Keeping costs low with minimal advertising
30.
30. Someone broke into Frank's car by smashing the passenger window. Which type of auto insurance will help cover the cost to get the window replaced?
a)
Bodily injury liability
b)
Property liability
c)
Collision
d)
Comprehensive
31.
31. Sam's auto policy has a coverage limit of $20,000 and a deductible of $500. He gets into an accident and the damages are $6200. Fortunately, he has collision coverage. How much will Sam pay out of pocket?
a)
$0
b)
$500
c)
$6200
d)
$20,000
32.
32. Each of the following is an "out of pocket" expense EXCEPT
a)
Your monthly premium
b)
A copay of $15
c)
A $1000 deductible
d)
Your co-insurance of $250
33.
33. Medicaid generally provides insurance for what groups of people?
a)
The elderly or disabled
b)
Individuals in low-income households
c)
Anyone who wants to buy the coverage
d)
Employees in a government positions
34.
34. What type of auto insurance are you required to carry in almost every state?
a)
Insurance if you damage your own property
b)
Insurance if you cause injury to another person
c)
Insurance in case you get in an accident with someone who doesn't have insurance
d)
Insurance if you cause injury to yourself
35.
35. In general, how do insurance companies decide how much to charge an individual for their monthly premiums?
a)
The company assesses the individual's risk factors and assigns higher premiums to higher risk individuals
b)
The company looks at the individual's tax filings from the previous year
c)
The company charges the same premium for every individual eligible for coverage
d)
The company increases or decreases premium rates based on the stock market
36.
36. Your health insurance plan has a $20 copay for a prescription. You pick up the medicine which has a cost of $75. How much do you pay the pharmacy?
a)
$0
b)
$20
c)
$55
d)
$75
37.
37. What was the net (or take-home) pay for this employee for this pay period?
a)
$335.10
b)
$400.00
c)
$2,680.80
d)
$3,200
38.
38. How much did this person pay towards Medicare in this pay period only?
a)
$5.80
b)
$24.80
c)
$44.50
d)
$52.20
39.
39. 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
40.
40. 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
41.
41. 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
42.
42. When you complete your 1040 form, if you overpaid your taxes and the government owes you money, that is called a __________.
a)
withholding
b)
direct deposit
c)
deduction
d)
refund
43.
43. Which of the following is the MOST difficult to adjust if you are looking to reduce your expenses?
a)
Dining Out
b)
Loan payment on a new car
c)
Expenses for new clothes
d)
Postponing a purchase for a big screen TV
44.
44. If you are trying to reduce the amount you spend on food, you should try
a)
Cooking your own food at home as much as possible
b)
Dining at restaurants more often to save water on dishes
c)
Eating more snacks on the go and fewer meals at home
d)
Drink more coffee and soda so you aren't as hungry for food
45.
45. Which description is most accurate for a Zero-Based Budget?
a)
You put every dollar of your net pay into a budget category each month
b)
You spend your checking account balance down to $0 every month
c)
You spend your saving account balance down to $0 every month
d)
You pay every one of your debts down to $0 every month
46.
46. 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 decrease by having roommates?
a)
Groceries and eating out
b)
Rent
c)
Cell phone bill
d)
Bedroom furniture
47.
47. What action corresponds to the advice "Pay yourself first?"
a)
Wait until the end of the month to determine how much you have leftover to save
b)
Set aside a fraction of your paycheck into a savings account before you start spending
c)
Spend your regular paycheck on needs and wants but funnel any extra money into saving
d)
Become self-employed so you're paying yourself instead of being paid by an employer
48.
48. Tara is looking for a new winter coat and has found one in her price range that she really likes. However, she is unfamiliar with the brand and is unsure how long the coat will last. Which of the following factors might help Tara find the information she’s looking for?
a)
Customer reviews
b)
Current sales and discounts that the company is offering
c)
The brand’s return policy
d)
Whether or not the company accepts her credit card
49.
49. What is a potential benefit of comparison shopping?
a)
You are guaranteed to find a product that meets every criteria that is important to you
b)
Stores provide a significant discount if they know you took a lot of time to find the best deal
c)
You are more likely to find a product that best fits within your budget
d)
You qualify for a store’s reward program if you take the time to comparison shop on a frequent basis
50.
Why is it important to track your expenses?
a)
To make sure you don't spend more than you have
b)
It's not important
c)
So you can brag to friends
d)
To make your parents happy
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