Worksheets6.16: Financial Literacy Post Test
Total questions: 20
Worksheet time: 20mins
How do fixed expense differ from flexible expenses?
Fixed expenses are monthly bills, while flexible expenses are one-time
fixed expenses can be changed, while flexible expenses are optional
fixed expenses are necessary, while flexible expenses are optional
fixed expenses are larger than flexible expenses
What is the main role of the Federal Reserve Bank?
To regulate insurance companies
To manage the nation’s monetary policy and control interest rates
To insure bank deposits
To sell stocks
If you want to compare the overall performance of the stock market, which tool would you use?
Stock market index
Insurance deductible
Money market account
Estate tax
What is the main difference between a savings account and a money market account?
Money market accounts usually offer higher interest rates and may require higher minimum balances
Savings accounts are only for businesses
Money market accounts are not insured by the FDIC
Savings accounts have no withdrawal limits
What is a key difference between credit cards and debit cards?
Debit cards have higher interest rates than credit cards
Credit cards offer a line of credit, while debit cards use funds directly from your bank account
Debit cards allow you to borrow money from the bank
Credit cards require a PIN for every transaction
What is the primary purpose of a credit report?
To list your personal assets
To provide a detailed history of your credit activity
To calculate your annual income
To track your employment history
Which of the following is a benefit of having a trust as part of your estate plan?
It guarantees no taxes will be paid
It allows assets to be managed and distributed according to your wishes, possibly avoiding probate
It replaces the need for a will
It is only for people with children
Which of the following is a government-issued debt security with a maturity of less than one year?
Mutual fund
Treasury Bill
Certificate of Deposit
Stock
Which of the following is a benefit of using a credit card over a debit card?
Debit cards provide better fraud protection
Debit cards have no spending limits
Credit cards often offer rewards and cash back programs
Credit cards do not affect your credit score
If you are planning for long-term financial security, which combination of accounts and investments would be most effective?
Only a savings account
A mix of retirement accounts, mutual funds, and bonds
Only stocks
Only certificates of deposit
What is a credit score?
A measure of your income
A type of bank account
A number representing your creditworthiness
A loan from a bank
Which of the following is NOT typically traded on a stock exchange?
Stocks
Bonds
Real estate
Mutual funds
Why is it important to have a living will?
To avoid paying taxes
To specify your medical wishes if you become unable to communicate
To insure your property
To increase your investment returns
Which of the following best explains the purpose of a will in estate planning?
To pay off debts
To outline how a person's assets will be distributed after death
To avoid paying taxes
To insure property
Which stock market index is made up of 30 large, publicly owned companies in the U.S.?
NASDAQ
Dow Jones Industrial Average
S&P 500
Russell 2000
Which of the following deductions is typically taken from gross pay to calculate net pay?
Employer contributions to retirement plans
Bonuses and commissions
Reimbursement for travel expenses
Health insurance premiums
How can estate taxes affect the distribution of your assets after death?
They have no effect on asset distribution
They may reduce the amount of assets passed on to beneficiaries
They increase the value of your estate
They are only paid by the government
Why might someone choose a mutual fund over individual stocks?
Mutual funds are riskier than individual stocks
Mutual funds allow for diversification and professional management
Mutual funds guarantee profits
Mutual funds are not regulated
Which type of loan typically has the highest interest rate?
Auto loan
Mortgage loan
Personal loan
Payday loan
What is the primary difference between gross pay and net pay?
Gross pay is only for salaried employees, net pay is for hourly employees
Gross pay is the total earnings before deductions, net pay is the amount received after deductions
Gross pay is the amount after taxes, net pay is before taxes
Gross pay includes bonuses, net pay does not
