WorksheetsSemester 1 Exam Review
Total questions: 48
Worksheet time: 24mins
Name
Class
Date
1.
1. Which of the following statements is TRUE about the value of a college degree?
a)
A high school graduate can expect to earn about the same as a college graduate
b)
Every college graduate can expect to have a starting salary over $60,000 right after college
c)
A college graduate can expect to earn, on average, more than a high school graduate over a career
d)
A college graduate typically earns less than someone with a high school diploma for the first 10 years
2.
2. During a period of financial hardship, you can apply for this to pause student loan payments while interest still accrues…
a)
Grace period
b)
Grants and scholarships
c)
FAFSA
d)
Forbearance
3.
3. Which of these options lists the types of financial aid from MOST attractive to LEAST attractive?
a)
Private loans, Federal loans, Work-study, Grants/Scholarships
b)
Grants/Scholarships, Work-study, Federal loans, Private loans
c)
Work-study, Grants/Scholarships, Federal loans, Private loans
d)
Federal loans, Grants/Scholarships, Work-study, Private loans
4.
4. In order to qualify for financial aid, which application must you submit?
a)
FAFSA
b)
PLUS
c)
SAVE
d)
SAI
5.
5. Which of the formulas below correctly calculates net price?
a)
Sticker price - student loans = net price
b)
Grants and scholarships + student loans = net price
c)
Sticker price - grants and scholarships = net price
d)
Sticker price + grants and scholarships = net price
6.
6. Which of the following is considered a direct cost of attendance?
a)
Travel expenses
b)
Cell phone bill
c)
Tuition
d)
Food and entertainment
7.
7. Who receives and uses the information submitted in your FAFSA?
a)
Your employer to see if you’ll still be able to work while attending college
b)
Your parents to keep track of your progress at college
c)
The federal government for tax purposes
d)
The schools you’ve applied to and your state government to determine your eligibility for financial aid
8.
8. Although it’s not a type of financial aid, how can transferring credits from a community college help save you money on college costs?
a)
It reduces amount of credits you’ll have to pay for at your 4-year college
b)
Colleges will pay you for any credits transferred from a community college
c)
The cost of community college credits can be deducted on your taxes
d)
Transferring credits from a community college makes you eligible for lower interest rates when taking out federal student loans
9.
9. Janelle's family earns about $60,000 per year. She has been accepted to College A and College B and is comparing their financial aid packages. College A has a sticker price of $28,000 and net price of $12,000. College B has a sticker price of $60,000 and net price of $9,000. Which statement below is FALSE?
a)
It will cost less to attend College A
b)
College B is providing Janelle more grants and scholarships
c)
College A has a lower sticker price than College B
d)
It will cost less to attend College B
10.
10. All of the following are strategies to reduce the cost of attending college, EXCEPT…
a)
Attend an in-state college that typically has lower tuition costs for residents of that state
b)
Spend your first two years at a community college then transfer your credits to a four year college
c)
Live on campus to reduce the costs associated with commuting to classes every day
d)
Participate in dual enrollment programs while in high school to reduce the number of classes you need to take in college
11.
11. Which of the following ways to pay for college is MOST likely to be based on someone’s financial need?
a)
Direct PLUS Loans
b)
Grants
c)
Scholarships
d)
Federal Subsidized Loans
12.
12. Which repayment option does not accrue interest while your required payments are paused?
a)
Consolidation
b)
Deferment
c)
Refinancing
d)
Forbearance
13.
13. Which of the following is TRUE about the Student Aid Index (SAI)?
a)
The LOWER your SAI the MORE financial aid you are eligible for
b)
The HIGHER your SAI the MORE financial aid you are eligible for
c)
The LOWER your SAI the LESS financial aid you are eligible for
d)
Your SAI does not impact how much financial aid you are eligible for
14.
14. Keith's tuition, room & board, and fees for freshman year total $26,000. Including scholarships, grants, and federal student loans, his financial aid package is $25,500. Which option below is both realistic and the most financially responsible?
a)
Keith’s financial aid package covers all of his necessary costs, so there is no need for him to do anything else
b)
Keith should take out a private loan and limit himself to $8000 in other expenses freshman year
c)
Keith should pick up a part-time job to cover his remaining costs and personal expenses
d)
Keith should not attend this college because he cannot afford it
15.
15. Which of the following is the default federal student loan repayment plan college graduates are entered into, requires the same minimum payment for the life of the loan, and ensures the borrower will pay the loan in full in ten years?
a)
Standard repayment plan
b)
Graduated repayment plan
c)
Extended repayment plan
d)
Income-driven repayment plan
16.
16. Which of the following is a benefit of an income-driven repayment plan?
a)
Theoretically, your payment should never be more than you can afford
b)
You will pay the least amount of interest over the life of the loan when compared to other loans
c)
They’re structured to be paid off in 5-10 years
d)
Even if you start to make more money, your monthly payments won’t change
17.
17. How does investing in the stock market differ from putting money in a savings account at a bank?
a)
Investing is always a less risky option than saving
b)
Investing is best for short-term situations like emergency funds; saving is best for the long-term
c)
Investing typically earns between 1-2% while saving generally earns between 5-7%
d)
Investing allows you to accumulate wealth for retirement while saving is best for short-term purchases or emergencies
18.
18. Which of the following statements is TRUE about compound interest?
a)
Compound interest is difficult to calculate, so those who use it earn higher profits for their efforts
b)
Compound interest means you have a fund manager who is compounding your returns without charging a fee
c)
Compound interest allows you to earn interest not only on the amount you have saved, but also on the interest you've already earned
d)
Compound interest directly impacts how much you will be charged in fees
19.
19. What kinds of behaviors can PREVENT people from making smart investing decisions?
a)
Staying calm when the market is experiencing a downturn
b)
Buying stocks when prices are low and selling them when they’re high
c)
Exiting the market because that’s what everyone else is doing
d)
Investing in a diversified portfolio instead of trying to beat the market
20.
20. Which of the following accurately describes a difference between an individual bond compared to a bond fund?
a)
A bond pays you dividends while a bond fund pays you regular interest
b)
A bond guarantees you a higher rate of return than a bond fund
c)
A bond is issued by a company while bond funds only invest in government bonds
d)
A bond is considered to be a less diversified investment than a bond fund
21.
21. You bought 10 shares of stock in StreamingVideoCo for $45 per share. Two months later you sold the 10 shares of stock for $80 per share. What was your profit or loss on StreamingVideoCo stock? (Assume that StreamingVideoCo didn't pay a dividend and that you didn't incur any trading fees during that period.)
a)
Loss of $800
b)
Profit of $350
c)
Loss of $450
d)
Profit of $800
22.
22. Which of the statements below BEST describes the relationship between risk and return when considering an investment?
a)
Investors expect to earn a lower return when they invest in a high risk asset
b)
Investors expect to earn a higher return when they invest in a low risk asset
c)
Investors expect to earn a higher return when they invest in a high risk asset
d)
Investors expect to earn zero return when investing in a low risk asset
23.
23. Why is diversification a recommended investment strategy?
a)
Investing in a diversified portfolio guarantees that you won’t lose money with your investments
b)
If you tell your fund manager to use diversification, they’ll charge you lower fees
c)
Diversifying your portfolio helps reduce risk
d)
If you diversify your portfolio, you will definitely earn a high return
24.
24. Which of the following is TRUE about capital gains tax?
a)
Capital gains tax is only applied to the sale of personal items, such as cars and jewelry
b)
Capital gains tax is applied at a uniform rate across all types of investments, regardless of the holding period
c)
Capital gains tax is charged on the profit made from the sale of an investment or real estate
d)
Capital gains tax is something you can opt-out of if you do not want to pay it for a specific year
25.
25. How can someone make money from investing in a stock?
a)
They sell the stock for a lower price than what they bought it for
b)
They receive dividends or they sell the stock at a higher price than what they bought it for
c)
The stock loses value but the overall market experiences a positive return
d)
They sell the stock for the same price they bought it for
26.
26. Why is it important for you to understand your risk tolerance before you start investing?
a)
It helps you decide if you want to participate in your employer’s match program for your 401(k)
b)
It’s recommended that people with a low risk tolerance shouldn’t invest at all
c)
If you have a high risk tolerance, you may be eligible for lower fees since you won’t care if your portfolio drastically loses value
d)
You should tailor your investment portfolio so that it assumes an amount of risk you are comfortable with
27.
27. Katrina works for Penny's Pickles, which offers a 401(k) match for up to 3% of her salary, which is $65,000 per year. In her budget, she only has $150 per month available to save for retirement. What should she do?
a)
Opt out of the 401(k) plan since she doesn’t have much to contribute; use the money elsewhere in her budget
b)
Contribute $75/mo to her 401(k) and $75/mo to an IRA, so that she's diversified
c)
Save the $150/mo in a bank account until she has enough to max out her 401(k), and then invest
d)
Contribute the full $150/mo to the 401(k) because her company will match that full amount, "doubling" her investment every month
28.
28. What is one question an investor should ask when deciding whether or not they would like to open a Roth IRA or a Traditional IRA?
a)
Do I want to make a guaranteed return of 6% or 8%?
b)
Do I want to pay taxes now or later?
c)
Do I want to take advantage of my employer’s matching contribution?
d)
Do I want to take on more or less risk?
29.
29. Sanjana is explaining what Social Security is to her younger brother. Which of the following descriptions should she use?
a)
Social Security is a type of retirement savings plan that you can open through a brokerage firm
b)
Social Security is a government program that pools contributions from current workers to fund retirement support benefits to those who are eligible
c)
Social Security is a type of retirement savings plan offered by some employers
d)
Social security is a government mandate that requires employers to offer their employees a 401(k) or pension plan
30.
30. Which of the following is an example of insider trading?
a)
Purchasing stocks based on the general trend in the stock market
b)
Buying or selling stocks based on information that is not available to the public
c)
Investing in a diversified portfolio to spread out the risk of investment
d)
Selling stocks because of publicly released financial news and company earnings
31.
31. Juan saved $1,000 from his summer job cleaning pools. Which of these account types would work best for him if he doesn't need access to the money for a number of years AND wants to earn the highest interest rate?
a)
Regular savings account
b)
Money Market account
c)
Checking account
d)
Certificate of Deposit
32.
32. Which of the following is an effective strategy for personal saving?
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 over
d)
Take out a payday loan so you can save before you receive your paycheck
33.
33. All of the following statements about bank accounts are true EXCEPT…
a)
If the bank is FDIC-insured, your money, up to the FDIC limit, is safe even if the bank fails
b)
Many banks pay interest on the money you deposit into your savings account
c)
Historically, savings accounts earn higher returns than investments in the stock market
d)
Money in a checking account is usually easy to access via ATM, debit card or check
34.
34. You are developing a savings plan and using short-, medium-, and long-term goals to motivate you. Which represents possible goals from short-term to long-term? Save for…
a)
Retirement, a house down payment, college tuition
b)
A new cell phone, college tuition, a house down payment
c)
A new cell phone, dinner with friends this weekend, a new bike
d)
Retirement, college tuition, a vacation
35.
35. Which represents the BEST time to start saving for your retirement?
a)
As soon as you have your first full-time job
b)
Right after you pay off your student loans
c)
Once you are debt-free, including paying off all credit cards, auto loans, and your mortgage
d)
At age 45, so you have exactly 20 years until retirement
36.
36. Which of the following statements is TRUE?
a)
The majority of Americans have an adequate emergency fund
b)
The majority of Americans have sufficient amounts of money saved for retirement
c)
The majority of Americans have an adequate emergency fund, but do NOT have sufficient amounts of money saved for retirement
d)
The majority of Americans do NOT have an adequate emergency fund or sufficient amounts of money saved for retirement
37.
37. Experts recommend that you accumulate enough to cover 3 to 6 __________________ of expenses in your emergency fund.
a)
Days
b)
Weeks
c)
Months
d)
Years
38.
38. Digital wallets and P2P payments have made the use of __________ less necessary.
a)
Mobile phones
b)
Driver's license
c)
Physical cash
d)
Insurance cards
39.
39. Three of these statements best describe a checking account. Which statement best describes a savings account?
a)
This account offers a convenient way to pay bills and access cash from an ATM
b)
This account pays you interest on money you have put away for later to help your money grow
c)
This account is automatically debited when you use a debit card
d)
This account typically allows an unlimited number of transactions per month
40.
40. You overhear your Aunt Tina tell your mom that she, her husband, and their kids are "living paycheck to paycheck." What does Aunt Tina mean by that?
a)
Aunt Tina gets a paycheck one month, and her husband gets a paycheck the next month; they alternate pay periods
b)
Aunt Tina and her family don't have any money saved, and their paychecks are just barely covering monthly expenses
c)
Aunt Tina and her family have high paying jobs and don’t worry much about money
d)
Aunt Tina only receives paper paychecks instead of direct deposit
41.
41. You are at the checkout counter at the local supermarket and use your debit card to pay for your groceries. Where does the money for this purchase 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
42.
42. Jocelyn gets a text alert from the bank that her account balance has dropped below $100 after a series of $20 ATM withdrawals. She has not used her ATM in over a week and wonders what she should do. What would you recommend?
a)
Wait until her monthly statement arrives so she can check to see if those withdrawals are still there
b)
Wait a week as it is fairly common for the bank to catch mistakes like this
c)
Check her wallet to be sure her debit card has not been stolen. If she still has it, then she should not worry.
d)
Contact her bank immediately as it appears that her account may have been hacked
43.
43. Which of the following transactions will REDUCE your checking account balance immediately?
a)
Writing your monthly rent check which you will mail tomorrow
b)
Using your debit card to pay for groceries at the supermarket
c)
Using your credit card to pay for your school books
d)
Depositing a check at a local bank branch
44.
44. Which of the following statements 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 visiting the bank branch
d)
You can only shop online if your bank account has online banking features
45.
45. FDIC Insurance is...
a)
Optional coverage consumers can purchase so that their bank deposits remain safe
b)
Insurance bank branches can buy to protect their business against fraud and scams
c)
Required if you want to do online or mobile banking
d)
Protection for bank customers’ deposits up to $250,000, guaranteeing their money is still available if the bank goes out of business
46.
46. A person-to-person payment app could be used in each of the following scenarios EXCEPT...
a)
Tina pays her neighbor $200 for breaking his window with a softball
b)
Rafael writes a check to cover the entire month’s rent, and his roommates Valerie and Carlos pay Rafael for their share of the monthly rent
c)
Ahmed's soccer coach pays the team's registration fee for a big tournament, and each player then owes him $35 for their share of the registration fee
d)
Mia pays Cheesy Pizza Co. for a pizza she orders on their website
47.
47. Fill in the blanks: Direct deposit typically refers to your ______ sending your ______ electronically to your bank account.
a)
employer, bills
b)
employer, paycheck
c)
parents, allowance
d)
state government, taxes
48.
48. All of the following are downsides of being unbanked EXCEPT:
a)
Lack of access to credit
b)
Lost time paying bills
c)
Lack of fees associated with banks
d)
Difficulty making cashless purchases
100 %
