WorksheetsInvesting MidTerm - 2nd Practice Test (Banking and Economic Prin
Total questions: 25
Worksheet time: 13mins
Name
Class
Date
1.
Which of the following is an effective strategy for personal saving?
a)
Save a certain percentage of each paycheck and deposit it directly into a savings account
b)
Cover all of your wants and needs and save whatever is left over
c)
Take out a payday loan so you can save before you receive your paycheck
d)
Wait until the end of the month and save whatever is left in your checking account
2.
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
3.
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
4.
Fill in the blanks with the correct responses. If you follow the 50-30-20 rule of budgeting, you'll be putting 50% of your monthly income toward ______________, 30% of your monthly income toward ____________, and 20% of your monthly income toward _____________.
a)
Needs, wants, savings
b)
Wants, needs, savings
c)
Savings, needs, wants
d)
Needs, savings, wants
5.
Instead of living pay check to pay check, expert recommend that you accumulate enough to cover 3 to 6 _______________ of expenses in your emergency fund.
a)
Days
b)
Weeks
c)
Months
d)
Yearstion 1
6.
Digital wallets and P2P payments have made the use of __________ less necessary.
a)
Checks
b)
Physical Cash
c)
Credit Cards
d)
All of the above
7.
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
8.
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
9.
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
10.
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
11.
One of the significant drawbacks of bartering is that it can be
a)
Difficult to determine the exact value of goods
b)
May be difficult to find someone willing to trade for the items you have
c)
All of the above
d)
Items may be hard to transport or bring to trade
12.
If you invest $1,000 in a savings account that earns 3% annual interest compounded annually, how much money will you have after 5 years?
a)
$1,040
b)
$1,159
c)
$1,000
d)
$1,224
13.
What was one of the earliest forms of money used in ancient civilizations?
a)
Gold coins
b)
Paper currency
c)
Barter system
d)
Credit cards
14.
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
15.
Why is it important to check your bank statements on a regular basis?
a)
To detect unauthorized transactions
b)
To ensure all transactions are accurate
c)
To increase your credit score
d)
To avoid paying taxes
16.
Checking Accounting often DO NOT pay interest unless you have over $10,000 in the account.
a)
True
b)
False
17.
If Joaquim and Fatima received $10K in wedding gifts and want to save the money buy a house in about 5 years. What should they do with money if they want to money to remain FDIC insured and receive the highest interest rate?
4 lines
18.
Which of the following factors would result in a higher compound interest received on a savings account
a)
A lower annual percentage rate (APR)
b)
More frequent compounding periods
c)
A lower initial deposit amount (principal)
d)
A shorter term for the deposit
19.
Juan saved $1,000 from his summer job at the library. 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
20.
Is Cryptocurrency backed by the US government?
a)
Cryptocurrency is guaranteed by US Treasury bonds.
b)
Yes, Cryptocurrency is fully backed by the US government.
c)
Cryptocurrency is partially backed by the US government.
d)
No, Cryptocurrency is not backed by the US government.
21.
How have mobile devices changed the way we pay or goods and services?
a)
Mobile devices have transformed payments by enabling digital wallets, contactless payments, and online transactions.
b)
Mobile devices have increased the use of checks for transactions.
c)
Mobile devices have eliminated the need for any form of payment.
d)
Mobile devices have made cash payments more popular.
22.
What are some effective strategies for negotiating a fair trade in a bartering?
a)
Avoid any form of compromise
b)
Assess value, communicate needs, listen actively, propose win-win scenarios, compromise, ensure satisfaction.
c)
Ignore the other party's needs
d)
Focus solely on winning the negotiation
23.
If you are asked for your checking account number for direct deposit. Why do they need your checking account number? What is direct deposit?
a)
They need your checking account number to verify your identity.
b)
Direct deposit is a method of withdrawing cash from an ATM.
c)
They need your checking account number to accurately deposit funds into your account. Direct deposit is an electronic transfer of money directly into a bank account.
d)
They need your checking account number to charge fees directly.
24.
What is Opportunity Cost?
a)
Opportunity cost is how much money you will make in the future.
b)
Opportunity cost refers to the monetary cost of an item.
c)
Opportunity cost is the time spent on a decision.
d)
Opportunity cost is the value of what you are giving up when making a decision.
25.
Which of the following is not considered a fundamental concept in Economics?
a)
Gravity is a force that attracts two bodies towards each other.
b)
People face trade-offs: People give up one thing to get another.
c)
The concept of opportunity cost.The cost of something is what you give up to get it: This is also known as the "opportunity cost"
d)
Scarcity is an economic concept where individuals must allocate limited resources to satisfy their needs. Scarcity occurs when demand for a good or service is greater than availability.
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