WorksheetsFinance, Banking, and Insurance Worksheet
Total questions: 46
Worksheet time: 23mins
Suppose prices increase 4%, but your income stays the same. What will happen to your buying power?
Your buying power will increase.
Your buying power will decrease.
Your buying power will stay the same.
You will be able to buy more goods.
What is a reason to have an Individual Retirement Account (IRA)?
To save for retirement with tax advantages and to have money for expenses when you reach 59 1/2 years old.
To pay for daily expenses
To increase credit card debt
To avoid paying any taxes forever
If you put money in your savings before paying your bills, then you are...?
Paying yourself first
Ignoring your bills
Spending recklessly
Saving last
Before making a large purchase, you should:
Spend without thinking
Research and compare options
Ignore your budget
Buy the first thing you see
How do banks make money?
By providing loans and charging interest
By giving away money for free
By only keeping money in vaults
By printing their own currency
What is something you can do with online banking?
Transfer money between accounts, set up automatic bill pay, direct deposit paychecks
Buy groceries at a store
Cook a meal
Drive a car
If you have a $100,000 in your savings and the bank fails, how much of your money will be protected and by what insurance?
$100,000 protected by FDIC insurance
$50,000 protected by private insurance
$200,000 protected by FDIC insurance
None of your money is protected
Suppose a checking account is free with a minimum balance of $1,500, but the account earns no interest. What would be an important thing to consider?
The opportunity cost of not earning interest on $1,500
The number of checks you can write per month
The color of the checkbook
The location of the bank
If someone wins the lottery or a TV game show, what must they do?
They must pay taxes on their winnings.
They must return the prize.
They must donate the prize to charity.
They must refuse the prize.
The purpose of a restricted endorsement on a check is:
To allow anyone to cash the check
To limit how the check can be used or deposited
To make the check invalid
To increase the check amount
What is an advantage of having direct deposit?
It allows you to receive your paycheck faster.
It requires you to visit the bank in person.
It delays access to your funds.
It increases the risk of losing your paycheck.
You can avoid paying fees at the ATM by:
Using your own bank's ATM
Withdrawing cash from any ATM
Using a credit card at the ATM
Making frequent withdrawals
The saying “don’t put all your eggs in one basket” means:
Take many risks at once.
Rely on only one plan or resource.
Spread your risks and not depend on just one thing or diversify.
Collect as many eggs as possible.
What is a speculative stock?
A stock with high risk and potential for high returns
A stock that pays regular dividends
A stock issued by a government
A stock with a fixed interest rate
What is happening in the stock market when it is considered a bear market?
Stock prices are rising rapidly.
Stock prices are falling over a period of time.
The market is stable with little change.
There is a sudden surge in trading volume.
The stock market is regulated by which organization?
Federal Reserve
Securities and Exchange Commission (SEC)
Department of Treasury
World Bank
Corporations issue bonds or stocks to:
raise capital for business operations or expansion w/o having to get a loan.
reduce their workforce
increase product prices
decrease their market share
Income that can be received from a financial investment is:
Salary
Wages
Interest or dividends
Rent
What is the stock market called when things are rising and people are feeling positive about the market?
Bear market
Bull market
Stagnant market
Correction
Why do people invest?
To grow their money over time
To lose money
To avoid making decisions
To spend more
Which statement about risk and insurance is true?
Insurance eliminates all risks.
Insurance transfers risk from an individual to an insurer. Also the higher the risk the higher the cost.
Risk can always be predicted accurately.
Insurance increases the likelihood of loss.
What type of insurance replaces income when someone can no longer work due to an accident or injury?
Life insurance
Disability insurance
Health insurance
Auto insurance
A person has a health insurance policy with a $300 deductible. What does this mean?
The insurance will pay the first $300 of any medical bill.
The person must pay the first $300 of covered medical expenses before insurance pays.
The person pays only $300 for any medical treatment.
The insurance covers all expenses up to $300.
If someone has a 10-year term loan, what happens if they die in year 7? Year 13?
The loan is paid off if they die in year 7, but not in year 13.
The loan is paid off if they die in year 13, but not in year 7.
The loan is paid off if they die in year 7, but not if they die in year 13, as the term has ended.
The loan is paid off in both years 7 and 13.
Some reasons to have homeowner’s insurance are:
To protect against property damage, theft, or liability if someone gets hurt on your property.
To increase property taxes
To avoid paying utility bills
To lower mortgage interest rates
What is something important to do when you purchase a gift card?
Protect your PIN (personal identification number)
Throw away the receipt
Ignore the terms and conditions
Share the code with others
You should avoid payday and title loans because:
They have high interest rates and fees.
They help you build credit quickly.
They are recommended by financial advisors.
They offer long-term financial solutions.
What is the disadvantage of having a long term and taking longer to pay off a debt?
You pay less interest overall
You pay more interest overall
You pay the same amount of interest
You pay off the debt faster
The Truth in Lending Act requires that lenders tell you:
The interest rate and total cost of the loan
Your credit score
The lender's profit margin
The loan officer's name
Having a $5,000 credit line means:
You can borrow up to $5,000 on your credit account.
You must pay $5,000 every month.
You have $5,000 in your bank account.
You owe $5,000 to the bank.
Building and maintaining a high credit score can be achieved by:
Making late payments and maxing out credit cards
Paying bills on time and keeping credit utilization low
Applying for multiple credit cards frequently
Ignoring your credit report
An advantage of having a debit card is:
It allows you to spend money directly from your bank account.
It helps you build credit history.
It offers high interest rates on savings.
It requires no PIN for transactions.
If you are paying $40 per year in interest on a $100 purchase, is the cost of the interest high or low? Why?
High, because the interest rate is 40% which is quite high.
Low, because the interest rate is only 4%.
High, because the interest rate is 4%.
Low, because the interest rate is 40%.
If an 18-year-old is trying to get credit, what needs to be true?
They must have a cosigner or proof of income.
They must be married.
They must own a car.
They must have a college degree.
If you find that you can't pay your bills, you should:
Ignore the bills
Contact your creditors to discuss options
Take out more loans immediately
Throw away the bills
An opportunity cost is:
the cost of the next best alternative forgone.
the total money spent on a choice.
the profit earned from a decision.
the resources used in production.
What is the main source of income for 20-40-year olds?
Business income
Rental income
Salary and wages from employment
Pension
The pay is the only thing you should consider when deciding whether to take a job.
True
False
The amount of your paycheck after taxes are taken out is called:
Gross pay
Net pay
Bonus
Overtime
It is good to know this before renting:
The rental price and lease terms. You also want to know if utilities are included.
The color of the landlord's car
The number of pets in the neighborhood
The landlord's favorite food
Expenses that stay the same are called what?
Variable expenses
Fixed expenses
Irregular expenses
Unexpected expenses
An expense that changes is called what?
Fixed expense
Variable expense
Capital expense
Operating expense
What is the rule of 72?
Estimates how long it takes your money to triple.
Estimates how long it takes your money to double.
How much interest is earned.
How much you pay to get a loan.
What is a secured loan?
A loan that charges a high rate of interest.
A loan that has collateral.
A loan that does not have collateral.
What is the monthly insurance payment called?
Principal
Deductible
Interest
Premium
What is the amount you pay before the insurance kicks in called?
Deductible
Premium
Principal
Term
