WorksheetsFinancial Literacy Questions 2
Total questions: 50
Worksheet time: 50mins
An investor buys 100 shares of a common stock @ 36.00ashare.The stock is now selling at 38.00 a share. When deciding whether to hold or sell the stock, which factor is it important for the investor to consider?
The number of stockholders the corporation has.
The commission charged for buying and selling the stock.
The date of the next stockholder's meeting.
The place that the stock certificate is being held.
Margaret wants to store a valuable coin collection and important papers. Generally, consumers should:
Store valuables in a cabinet at home
Rent a safe deposit box for their valuables
Hand valuables over to their attorney
Store valuables in locked drawer
The term used to describe the ease and speed with which you can convert savings or an investment to cash is:
Convertibility
Principal
Liquidity
Rate of return
Who is liable for damage to his car and his personal injuries?
The old agent
The new agent
Richard
The old agent is liable for damage to your car and the new agent for personal injuries
A company offers direct deposit of employees' earnings. The company will still provide each employee with a statement that lists the employees'
gross pay only
net pay only
gross pay and the amount and type of deductions only
gross pay, the amount and type of deductions and net pay.
What is a credit score?
A number used to determine how much credit to extend to a person.
A measure used to indicate a person's gross wealth.
A reward system that is based on the number of credit cards a person has.
A formula based solely on a person's earnings.
A cash card generally: a. Can be used in the same way that someone uses a check to pay bills by mail b. Is purchased with a specific amount of money that can be used to pay for goods or services c. Is the same as a credit card which means you can use it to pay the minimum on a bill d. Is the same as a debit card and is always linked to a specific checking account
Can be used in the same way that someone uses a check to pay bills by mail
Is purchased with a specific amount of money that can be used to pay for goods or services
Is the same as a credit card which means you can use it to pay the minimum on a bill
Is the same as a debit card and is always linked to a specific checking account
Scott just got an ATM card to use and must choose a PIN (Personal Identification Number). How should he select a PIN that will give him maximum protection against anyone else being able to find out what the PIN is?
Use his birth date as his personal identification number
Use a random selection of letters and numbers
Use his first initial and last name as his personal identification number
Use the name of a friend, family member, or pet
Carrien sold her stock in ABC company for a higher price per share than she bought it for. She realized a:
Capital gain
Capital loss
Capital surplus
Dividend
When Lucy was born, her grandparents gave her a Series EE savings bond that will be worth $1,000 at maturity. Her grandparents paid:
$1,000 for the bond
$500 for the bond
$750 for the bonding
These bonds are gifts for long term depositors
A Bank Certificate of Deposit is a: a. Savings instrument that requires a deposit for a period of time during which the saver can withdraw money from the plan at any time without a penalty b. Savings instrument that requires a deposit for a period of time during which there is a penalty for withdrawals c. Cash deposit in a savings account that earns interest d. Certificate for deposits that are issued for half the face value
Savings instrument that requires a deposit for a period of time during which the saver can withdraw money from the plan at any time without a penalty
Savings instrument that requires a deposit for a period of time during which there is a penalty for withdrawals
Cash deposit in a savings account that earns interest
Certificate for deposits that are issued for half the face value
Which financial product may pay a dividend?
Saving account
Money market account
Certificate of deposit
Common stock
If you have a managed health care plan, it means that you:
Usually must first meet with your primary health care physician
Can go to any doctor at any time
Will be responsible for $100 of a doctor bill
Can apply for an 80% reimbursement of the amount paid to the doctor
Consumer Credit Counseling Services (CCCS) offer:
Retirement plans
Debt repayment plans
Stocks and bonds
Insurance policies
Matt's wallet, with all his credit cards, was stolen. He needs to: a. Notify the credit card companies after he gets his next account statements to get the 800 telephone numbers to report the stolen card b. Check the next account statements for unauthorized charges and, if so, file a complaint with the credit card company c. Nothing because retailers will not accept charges by someone who does not own the card d. Notify each credit card company immediately
Notify the credit card companies after he gets his next account statements to get the 800 telephone numbers to report the stolen card
Check the next account statements for unauthorized charges and, if so, file a complaint with the credit card company
Nothing because retailers will not accept charges by someone who does not own the card
Notify each credit card company immediately
Nora needed to make a long-distance call from a pay phone and did not have the cash. She was able to make the call by using her:
Credit card
Identification card
Cash card
Traveler's check
Identify the background color of a U.S. $5.00 bill.
Orange
Blue
Green
Yellow
Which of the following is your right as a shareholder of common stock?
The right to hire officers of the corporation
The right to receive dividends if paid
The right to receive discounts on products or services
The right to receive interest payments
Financial services and products generally offered by banks and credit unions include:
Real estate listings
Savings and loans
Legal services
Business plans
How can individuals be prepared for losing their job or having a large medical expense?
Maintain a checking account with sufficient funds
Pay credit card bills on time
Prepare a budget
Save at least three months of income
John's job provided the main income for his family. He died unexpectedly and had no life insurance. The probable financial consequence for his wife and two children does not include:
The loss of John's income
A reduction in the family's standard of living
Death-related expenses to be paid
An increase in income and expenses
Which statement does NOT accurately describe a characteristic of cash value for whole life insurance?
Cash value grows gradually over time
If the policy is cancelled, you may be entitled to some or all of the accrued cash value
Policy that accumulates cash value is less expensive than a policy that does not accumulate cash value
When an insured person dies, the beneficiary will receive the death benefit but the insurance company keeps the cash value
A creditor may deny credit because of:
Bad credit history
Age
Marital status
Race
A savings account earns the greatest amount of money when the interest on the account is compounded:
yearly
quarterly
monthly
daily
A high school student has begun to investigate the field of finance as a career choice. In deciding about the field, the student should focus on which question first?
Will I find a balance between financial rewards and personal satisfaction from work?
How many people do I know who work in this field?
Once I train for this area, how long before I will be at the top of the field?
Are there people in this field who are dissatisfied with their jobs?
If a business wants to raise capital but not create debt, it can:
Float a bond issue
Issue common stock
Borrow money from a commercial bank
Borrow money from the government
Consumer finance companies, which are often advertised on TV, are also known as:
Banks
Savings and loan associations
Small loan companies
Purchase loan lenders
You have a 2,000loss.Yourinsurancecompanypaysyou 1,500 on the claim for the loss. The $500 the insurance did not pay is a result of your policy having a:
Co-insurance clause
Deductible
Hazard clause
Premium
How would you characterize Jim's use of credit?
It is OK because his salary will increase significantly as soon as he graduates
It is irresponsible use of credit because his current income is too low
It is OK because he can pay it off over a long period of time
It's normal for college students
Which statement is FALSE about most ATM (Automated Teller Machine) cards?
You must have an account with a financial institution to have an ATM card.
You can always get cash anywhere in the world with no fee.
You can generally obtain information concerning your account balance(s) at an ATM machine.
You can generally get cash 24 hours a day, seven days a week.
Which statement best describes the relationship between a person's educational level and that person's potential earning power?
Education has no effect on a person's potential earning power
A person with a professional degree is likely to earn at least four times as much per year as a person who did not complete high school
Attaining a higher educational level affects the earning potential only for people over 40 years old
Attaining a higher educational level decreases potential earning power
A blue-chip stock can be described as:
A preferred stock
A stock with a good reputation for quality management, products and services
A speculative stock
A stock that pays interest
Which financial product can you buy for 25,issafe,andwillbeworth 50 at a future date?
Series EE savings bond
Certificate of deposit
50 shares of ABC Co. stock
ABC Co. bond
Patty is selling her car through a newspaper advertisement. When she finds a buyer, she wants a form of payment which is guaranteed to be good. Which form of payment should she avoid?
Cashiers Check
Certified check
Credit Card
A check
Debbie was behind on her stereo installment credit contract payments. As a result, the creditor seized and sold the stereo. The sale price did not cover all of the loan balance, the creditor got a court to order her employer to withhold part of her wages. This court order is called:
Wage assignment
Bankruptcy
Garnishment
Deficiency judgment
Robyn is an investor. Which financial product makes her a shareholder in a corporation?
Bonds
Certificate of deposit
Common stocks
Bond mutual funds
Employees prefer direct deposits because:
There is a small fee for the service
The danger of losing a paycheck is slightly reduced
The money is generally deposited in their checking account sooner than it would be if they had to deposit it in person
Direct deposits earn a higher rate of interest
Travelers checks, often used for vacations: a. Are equivalent to credit cards b. Are free at most banks c. Function as cash and are easily replaced if lost d. Are FDIC insured
Are equivalent to credit cards
Are free at most banks
Function as cash and are easily replaced if lost
Are FDIC insured
Ben's truck is crushed by a hit-and-run driver. Scott is hit by an uninsured driver. How will they receive payments?
State motorist coverage
Uninsured or no-fault motorist coverage
Insolvent motorist coverage
Auto liability coverage
Predatory lending practices do not include which of the following:
A creditor knocking on your door and agreeing to refinance your mortgage without looking at your credit history
An individual agreeing to a high cost loan with excessive fees
A lender who expects a loan to be refinanced when you are unable to make payments
A loan that you can afford with an interest rate that is the same as the interest rate being charged by at least three other financial institutions
What is the chief reason corporations issue stock?
To raise money for the corporation
To give consumers ownership in their company
To secure tax advantages
To help the economy
Who uses consumer credit reports in making decisions?
Brokers
Schools
Lenders
Churches
Why is maintaining a good credit history important to your future?
Anyone can access your credit history.
A good credit history can help you obtain a job, or a loan.
You cannot open a savings account without a good credit history.
It is folklore and not important.
When John bought a Microsoft bond, he was:
Lending money to Microsoft
Borrowing money from Microsoft
Buying part ownership of Microsoft
Investing in a liquid instrument
A publicly held corporation announces it is planning to merge with another publicly held corporation. Based on this information, an investor should be aware that the price of the stock
will stay the same.
will rise.
is likely to fall.
is unpredictable.
Debbie owns a clothing store. She is concerned that a customer who is injured in the store will sue. Which type of insurance should Debbie purchase?
Social insurance
Life insurance
Surety bonds
Liability insurance
The only type of life insurance that does not develop a cash value is:
Term life insurance
Whole life insurance
Universal life insurance
Variable universal life insurance
You used your credit card to buy flowers at the florist. The dollar amount of the purchase was:
Deducted immediately from your checking account
Added to your credit card account as a finance charge
Added to your credit card bill and you pay for it at a later date
Put on your credit card bill as a cash advance
The price of a security may be affected by:
Renovations
Destinations
Current events
Wages
The best reason for depositing money in a bank or credit union savings account instead of keeping your money "under the mattress" is that:
Money deposited in savings accounts are F.D.I.C. insured
Most savings accounts earn a guaranteed rate of interest
Most savings accounts come with a free credit card
Money in a savings account can be accessed any time during the day or night
