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WorksheetsProfessional Financial Literacy Final
Total questions: 40
Worksheet time: 7hrs 40mins
People who are unbanked are most likely to...
Have a high credit score
Have a college degree
Have a low income
Have a mortgage
Which of the following is NOT required to open a checking account?
Proof of identity
Proof of address
Social security number
Minimum age requirement
Which is NOT a typical goal for a savings account?
Saving for retirement
Saving for a down payment on a house
Saving for a vacation
Saving for a new car
How is compound interest different than simple interest?
Compound interest is calculated on the initial amount only
Compound interest is calculated more frequently
Simple interest is calculated more frequently
Simple interest is calculated on the initial amount only
A key difference between saving and investing is
Saving is for everyone, investing is for the wealthy
Your money is insured when investing, it is not in savings
Investing has a guaranteed return, savings does not
Saving is for emergencies & goals, investing is for long-term wealth
Why is compound interest more beneficial than simple interest?
Your money grows faster when it is compounded
Your taxed on simple interest, but not compound interest
Fees for compound interest are greater than simple interest
Compound interest is hard to calculate, so fewer use it
What is Social Security?
Social Security is a private retirement fund run by your company
Social Security is another name for a 401(k)
Social Security is a government run retirement program
Social Security is a program that matches your 401(k) contributions
Why is it important to start investing as soon as possible?
You take less risk when you are young, so money will be safe
You have more time for your money to compound
Investing is an easy way to make quick money
Fees on investments are cheaper when you are younger
Which of the following is typically a SECURED loan?
Auto Loan
Student loan
Credit Card Balance
Overdraft
How do you avoid paying interest on your credit card (or any other loan for that matter)?
Always make the minimum payment over time
Pay interest 1st, then pay what you can on leftover balance
Always make the full payment on time
Pay the principal 1st, then pay what you can on interest
Which is TRUE when you make only the minimum payment each month?
You ar charged interest on the remaining balance
Your credit line is restored to its maximum amount
Credit card companies have permission to sell your information
It is the fastest way to pay off your debt
Which of the following factors will most likely INCREASE the overall cost of your loan?
A lower interest rate
A longer loan term
Offering collateral to secure the loan
Paying a higher down payment
Which of the following does NOT contribute to your credit score?
Your payment history
Which banks issued your credit cards
Your debt-to-credit ratio
Length of credit history
When applying for a loan, why might a lender be interested in your credit score?
To set the loan's interest rate and terms based on risk
To sell your personal information to third parties
To determine if you actually need a loan
To know how much money you have in your bank account
Which types of debt usually CANNOT be erased or reduced?
Medical bills
Credit card debt
Federal student loans
None of these types of debt can be erased or reduced
How long does a bankruptcy typically remain on a credit report?
3-5 years
7-10 years
12-15 years
Indefinitely
Which is TRUE about sticker price and net price?
Net price is the sticker price minus loans
Net price is the sticker price minus loans
Sticker price is the net price minus scholarships & grants
Sticker Price is the published cost of going to a school
Why should you file the FAFSA as early as possible?
It can help your chances of being accepted into schools
Aid is given out on a first-come, first-serve basis
You're guaranteed to get more merit-based scholarships
You'll get a lower interest rate on federal student loans
What must you do if you accept a Federal student loan?
Sign a Master Promissory Note
Pay off all credit card debt
Pay a refundable deposit to secure your loan
Agree to an official credit check by the government
In what order should you accept different types of financial aid?
Work-study, scholarships, federal loans, private loans
Private loans, scholarships, work-study, federal loans
Scholarships, work-study, private loans, federal loans
Scholarships, work-study, federal loans, private loans
Each of these factors impacts your insurance premium EXCEPT...
Deductible amount
The vehicle you are insuring
Your credit score
Your income
Your health insurance copay is
Amount paid out of pocket before your insurance coverage
Paid by the insurer
Applied on an annual basis
A fixed amount of money you pay each time you use your plan
Which insurance coverage is required by law?
Homeowners insurance
Auto insurance
Renters insurance
Disability insurance
The out of pocket cost to the insured when a loss occurs is called...
Premium
Deductible
The W-4 form lets...
the government know how much you paid in taxes last year
your employer know how much to withhold from your paycheck
the 3 major credit bureaus know how many dependents you have
you know how much you paid in taxes last year
Which of the following is NOT a way you can file your taxes?
Through a tax professional
Mailing in a paper tax return to the Federal government
Using tax software like TurboTax
Through your employer's HR department
If a teen files a tax return, can the parent still claim him/her as a dependent?
Yes. All teens are dependents until they are 18 years old
No. If a teen files a tax return, he/she cannot be claimed
Yes, as long as the teen meets the dependency requirements
Yes, but the parent has to add the teen's income to theirs
Which of the following taxes is applied to wages, salaries, dividends, and interest earned?
Corporate Income Tax
Income Tax
Estate Tax
Excise Tax
How do wages and salary differ?
Wages describe what you earn on an annual basis
Salary describes what you earn on an annual basis
Wages mean you have a standard amount in each paycheck
Salaried employees are likely to be paid for overtime
In "pay yourself first" budgeting, what's typically the first action after getting paid?
Pay your rent or mortgage
Transfer money to your savings account
Buy groceries for the week
Pay off credit card balances
How can consolidating your student loans help your budget?
You'll pay more in interest over time
You'll be more likely to be eligible for loan forgiveness
Your monthly payment may decrease
Your interest rate is guaranteed to decrease
How does the 50/30/20 rule of thumb for budgeting allocate your income?
50% Needs, 30% Wants, 20% Savings & Debt Repayment
50% Wants, 30% Needs, 20% Savings & Debt Repayment
50% Savings & Debt Repayment, 30% Wants, 20% Needs
50% Needs, 30% Savings & Debt Repayment, 20% Wants
What should you do FIRST if you suspect your personal information has been compromised?
File an identity theft report with the FTC
Shred all of your credit cards
Go back to the last store you visited and look for clues
Close all of your bank accounts
Why do you need to be cautious when scanning QR codes with your phone or mobile device?
QR codes automatically share your data with the link address
QR codes can link to a fake website that installs malware on your device
QR codes automatically allow scammers to access all your photos and videos
QR codes always link to unsecured websites
Sean wants to buy a new backpack for school. Which of the following factors should he be Least concerned about when comparsion shopping?
The PRICE of the backpack
The QUALITY of the backpack
WHEN the backpack was made
REVIEWS left by other consumers
Each of the following is one of the six ways of influence EXCEPT...
Scarcity
Authority
Blackmail
Social Proof
Which of the following is TRUE about recent trends in identity theft?
Young people are never victims of identity theft
Most cases of identity result in a large dollar amount lost
The number of identity theft reports has significantly decreased over the past decade
Multiple large organizations have experienced data breaches that have leaked consumer information
Which type of identity theft is MOST prevalent for people age 19 and under?
Bank fraud
Loan or lease fraud
Phone or utilities fraud
Employment or Tax-related fraud
The two major signs of a scam are a request for personal information and _______
A free 30 day trial of a product or service
A coupon code offered for a current sale
A request to like and subscribe an account on social media
An urgent need for money
What is a potential benefit of comparison shopping?
You are guaranteed to find a product that meets every criteria that is important to you
Stores provide a significant discount if they took a of time to find the best deal
You are more likely to find a product that best fits within your budget
You qualify for a store's reward program if you take the time to comparison shop on a frequent basis
