WorksheetsBehavioral Economics & Banking
Total questions: 31
Worksheet time: 10mins
Which of the following situations BEST illustrates the concept of FOMO (Fear of Missing Out)?
Lisa signs up for a yoga retreat after hearing her colleagues talk about it
Tom shares daily updates from his road trip across the country on social media
Emily buys a new smartphone after seeing an online advertisement
Carlos feels the urge to attend a concert because all his friends are going and talking about it
What is a recommended approach to building a personal savings habit?
Spend first and save whatever is left at the end of the month
Automatically transfer a fixed percentage of your income to a savings account
Fulfill all your desires and save the remaining amount
Borrow money to save before your paycheck arrives
Experts suggest maintaining an emergency fund that can cover __________________ months of expenses.
2-3
4-7
1-3
3-6
All of the following statements about bank accounts are false EXCEPT…
If the bank is FDIC-insured, your money, up to the FDIC limit, is at risk if the bank fails
Many banks do not pay interest on the money you deposit into your savings account
Historically, savings accounts earn lower returns than investing your money
Money in a checking account is usually difficult to access via ATM, debit card or check
Which of the following statements about prepaid cards is NOT true?
Prepaid cards often come with various fees
Prepaid cards can be a convenient option for those without a bank account to shop online
Prepaid cards are an excellent tool for establishing credit history
Prepaid cards are generally accepted wherever debit and credit cards are used
When planning your financial future, you need to set savings goals for different time frames. Which sequence correctly represents these goals from immediate to long-term? Save for…
A new smartphone, a family vacation, retirement
A weekend trip, a new bicycle, buying a house
A concert ticket, a new laptop, a child's education
A new outfit, a vacation, a new car
According to the 50-30-20 budgeting rule, what are the 3 categories of budgeting?
Wants, Wishes, Needs
Retirmenent, Savings, College Plans
Needs, Wants, Savings
Wishes, 401k, Savings
When is the most advantageous time to begin planning for your retirement savings?
Immediately after securing your first full-time employment
Once your student loans are completely paid off
After eliminating all forms of debt, including credit cards, car loans, and your home mortgage
At the age of 45, allowing for a 20-year savings period before retirement
What is the financial situation of most Americans regarding emergency funds and retirement savings?
Most Americans have both an adequate emergency fund and sufficient retirement savings
Most Americans have an adequate emergency fund but lack sufficient retirement savings
Most Americans lack both an adequate emergency fund and sufficient retirement savings
Most Americans have sufficient retirement savings but lack an adequate emergency fund
What is a cognitive bias?
A logical conclusion drawn from evidence
A tendency to make decisions based on personal beliefs rather than facts
A method of revising opinions when presented with new information
A systematic error in thinking that affects judgments and decisions
Which statement best describes a savings account among the following options?
This account allows you to write checks and pay bills easily
This account helps your money grow by earning interest over time
This account is linked to your debit card for automatic payments
This account offers unlimited monthly transactions
Aunt Tina mentions to your mom that they are "living paycheck to paycheck." What does this imply about their financial situation?
Aunt Tina and her husband take turns receiving their paychecks each month
Their income is just enough to cover their expenses, with no savings left over
They have well-paying jobs and are financially comfortable
Aunt Tina prefers receiving paper checks instead of using direct deposit
When you use your debit card to withdraw cash from an ATM, where does the money come from?
Your credit card company
Your checking account
Your savings account
A loan from the bank
If the interest rate on your savings account is _____________ the rate of inflation, your purchasing power will be ______________.
Lower than, increasing
Higher than, decreasing
Equal to, decreasing
Higher than, increasing
Jocelyn receives a notification from her bank that her account balance has unexpectedly fallen below $100 after several $20 ATM withdrawals. She hasn't used her ATM card in over a week and is unsure of her next steps. What action should she take?
Ignore the alert and wait for the monthly statement to verify the transactions
Assume it's a bank error and wait a few days for it to be corrected
Verify that her debit card is still in her possession. If it is, there's no need for concern.
Immediately contact her bank as her account might have been compromised
Which of the following actions will cause an immediate decrease in your checking account balance?
Writing a check for your utility bill to be mailed later
Paying for a meal at a restaurant with your debit card
Charging your new laptop to your credit card
Depositing cash at an ATM
What is a benefit of using online banking services?
Online banking guarantees no fees for overdrafts, ATMs, and monthly charges
It ensures a higher interest rate on all your accounts
It allows you to manage transfers, pay bills, and automate savings without needing to visit a bank branch
Online shopping is only possible with online banking features
What is FDIC Insurance?
Protection for bank customers’ deposits up to $250,000, guaranteeing their money is still available if the bank goes out of business
Required if you want to do online or mobile banking
You have $5 in your checking account and have opted for overdraft protection. You decide to purchase a coffee for $4, a book for $8, and a sandwich for $6 using your debit card. What is the most likely outcome of these transactions?
Your account will be closed immediately
You will likely incur an overdraft fee for one or more transactions and will need to repay the bank for the overdrawn amount
The bank will block any transaction that exceeds your account balance, so your card will be declined
The bank will give you a grace period to deposit funds without any fees
What is a bank statement?
A daily summary of your account spedatures
A weekly summary of your account spedatures
A monthly summary of your account spedatures
An annual summary of your account spedatures
A person-to-person payment app might be used in all of the following situations EXCEPT...
Liam sends $50 to his friend for concert tickets they bought together
Sophia uses the app to pay her monthly utility bills directly to the service provider
Ethan reimburses his colleague for lunch they shared during a business trip
Olivia pays her friend for a shared gift they bought for a mutual friend
What is the common term for the process where your employer sends your salary directly to your bank account?
Direct withdrawal
Direct deposit
Wire transfer
Cash payment
Which of the following is NOT a disadvantage of not having a bank account?
Inability to obtain loans
Wasting time on bill payments
Absence of banking fees
Challenges in making electronic transactions
Consider two situations: Situation A: You decide not to purchase a vintage comic book priced at $300 because you believe it's overpriced. Situation B: You inherit a vintage comic book valued at $300 from a relative and choose to keep it as a collectible rather than selling it. In situation A, you value your $300 more than the comic book. In situation B, you value the comic book more than the $300. This illustrates which concept?
Loss Aversion
Sunk Cost Fallacy
Endowment Effect
Cognitive Dissonance
While researching a new smartphone, you only read reviews from the manufacturer's website and a fan forum dedicated to the brand. This approach might result in …
Groupthink
The sunk cost fallacy
Confirmation bias
Risk aversion
You purchase a stock at $100 per share. After a month, the stock's price falls to $50 per share (losing half its value). If you are influenced by loss aversion, you would most likely…
Hold onto the stock
Sell the stock immediately
Purchase additional shares
Explore other investment opportunities
People tend to feel losses _____ times more than gains of the same value.
4
2
Credit cards allow you to purchase items immediately and pay for them at a later date.
True
False
Christopher observed he felt the pain of losing a $10 bill more than he felt the joy of finding it on the sidewalk the week before. What cognitive bias can this be explained as?
What are costs called that have already been incurred and cannot be recovered?
Opportunity costs
Sunk costs
Relevant costs
Avoidable costs
Does a checking account typically earn interest over time?
Yes
No
