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WorksheetsPersonal Finance Final Review
Total questions: 67
Worksheet time: 35mins
Veronica is going to finance her car purchase using an auto loan. Which statement below is accurate?
Her principal is the cost of the car, minus any down payment she makes
Nick’s friend advises them that they should “pay themselves first.” What does that mean?
It means to save or invest a portion of your income before paying other expenses
All of the following are characteristics of a credit card EXCEPT…
Your credit limit is dependent on your credit score and income
They have monthly minimum payments, even if you don't have a balance
Jasleen buys three new lipsticks from a store at the mall. Which payment method would reduce the amount of money in her checking account?
Debit card
The monthly premium for Manny’s renter's insurance is $250. During the month of April, someone breaks into his apartment and steals or destroys $5000 worth of his possessions. How much will Manny pay and how much will the insurance company pay to replace his items?
Manny - $250
Insurance - $4,750
Manny - $4,750
Insurance - $250
Manny - $250
Insurance - $250
Manny - $4,750
Insurance - $4,750
David decides to put $2,000 into a savings account earning 2% annual compound interest for 10 years. Which of the following best describes the amount of money he’ll have at the end of this period? You can ignore the impact of inflation in this question.
Kai is reviewing his credit report to understand his financial standing. All of the following can be found in his credit report EXCEPT…
His checking account balance history
These high school seniors each bought $1500 worth of items to bring to college with them in the fall. Each one used a credit card with similar terms to make their purchases. Who will pay the LEAST interest for their purchases?
Stu, who pays the first $1,000 uisng graduation money and then pays $250 per month until the debt is $0.
Jasmine, who had saved the $1500 previously and pays off the whole balance once her bill comes
Nelson, who makes the minimum monthly payment each month until the debt is $0
Kolby, who doesn't pay anything until the school year is over and then pays the minimum monthly payment
When Luna has liability coverage with her auto insurance policy…
Luna is protected against claims from others for injuries and damages she causes to them.
Which person from this list is saving rather than investing?
Yvonne, who puts $750 per month into her bank account earning 1% interest
Daryl, who uses his $5000 end-of-year bonus to buy Treasury bonds
Alexis, who buys $100 worth of shares in an S&P 500 index fund every month
Monica, who puts $1,000 into a Roth IRA
Laura is a high school student who has a part-time job at a department store. All of the following options will be deducted from her paycheck, EXCEPT...
Federal taxes
Overdraft fees
Social Security
Medicare tax
Which statement on the benefits of mobile banking is correct?
Maura has started a full-time job as an accountant at a nonprofit organization. Which tax paperwork is she likely to receive during her first week on the job?
A W-4 form
A 1040 form
A W-2 form
A 1040 form
Liam is exploring different ways to manage his finances. All of the following are common budgeting strategies, EXCEPT…
Impulse Buying
50/30/20 budgeting
Zero-based budgeting
Envelope budgeting
Anika wants to protect herself from identity theft. All are ways EXCEPT...
Enabling two-factor authentication
Use public wi-fi
Hudson always makes the minimum monthly payments on all of his debts, on time. He receives a raise at work which gives him an extra $250 per month in take-home pay. If his primary goal is to minimize the amount of interest he'll pay over the lifetime of his debts, which debt should he pay down first, using his increased pay?
His car loan with a 6.9% interest rate
His credit card with a 19.7% interest rate
His private student loans with an 11.8% interest rate
His borrowed money from his friend who didn't charge any interest
Evelyn just got her first job and is considering when to start saving and investing her money. The best time for her to start is:
When she's older and earning a lot of money.
After she's experienced an emergency, and realizes the need for savings.
The sooner the better, giving more time for her money to grow.
When you are about a year away from retirement
What is a short-term financial goal?
Benjamin often finds himself worrying about his finances, while his friend Scarlett tends to avoid thinking about money altogether. Which is true about feelings that individuals have towards money?
Zoe has a checking account and a savings account. What is one feature of her checking account that is useful for managing her savings?
Automatic transfers
Writing checks
Direct deposit
Debit card
What is the 50/30/20 budgeting approach?
What is an emergency fund?
An emergency fund is a savings account for unexpected expenses usually 3 to 6 months of living expenses.
Abigail is comparing savings accounts at different financial institutions. She thinks she notices that they offer different interest rates, charge different fees, and are regulated at both the state and federal level. Is she correct?
No, only the fees are different.
What is compound interest?
Luna is looking to borrow $1,000. Which option will lead to the lowest cost for her?
A payday loan that charges $15 a week for every $100 borrowed
A personal loan with a 7% interest rate with a vehicle pledged as collateral
A cash advance on a credit card that has a 29% APR and a 3% transaction fee
Putting the amount on a credit card that has a 19% APR.
Michael is trying to improve his credit score. What is the most important factor that can raise or lower his credit score?
Type of credit used
Length of your credit history
Payment history
Credit inquires
Which two types of credit may require a down payment?
College loans and auto loans
Payday loans and mortgages
Auto loans and mortgages
Personal loan and auto loans
Hannah is considering using payday loans and other alternative financial services to solve her short-term cash problem. How should Hannah approach using a payday loan or other alternative financial services?
Use them as a last resort because they charge very high interest rates and fees
They are a great way to increase your credit because you can take loans out and pay them back really quickly
Rely on them for your everyday financial needs because they are a quick source of cash
Get as many loans as possible to increase your credit score
Which is false about risk in investing?
Risk tolerance is an individual's ability and willingness to take on uncertainty.
An individual's risk tolerance can change over time.
Diversification eliminates all risk
Individual stocks are riskier than ETFs, mutual funds, and Index Funds
Luna invested $1,000 for a $10 share. A year later, she sold them for $15 per share. What is her profit?
$1,000
$2,000
$500
$1,500
Ava is planning her retirement savings and is considering different types of retirement accounts. Which is true about these accounts?
401(k), Traditional IRA, and Roth IRA accounts all feature contributions that are pre-tax income with taxes deferred until withdrawal in retirement
401(k) accounts differ from IRA account in that they allow for the ability to withdraw funds before retirement without taxes or penalties
Roth IRA accounts feature contributing after-tax income whereas 401(k) and Traditional IRA accounts contributions are from pre-tax income
Both IRA accounts and 401(k) don't affect your taxable income
What is the difference between gross pay and net pay?
Aiden is interested in investing in a company. What are shares of stock?
A unit of ownership in a company
A government bond
A savings account at a bank
A type of checking accounting
Charlotte is considering buying an insurance policy. Which is not true about insurance premiums?
Insurance premiums are only paid after an event such as an accident or insurance claim
Premiums are paid to have an insurance policy and provide protection from emergencies
Premiums can be lowered by lowering risk profile, increasing the deductible, or decreasing coverage limits
Premiums are a fixed amount paid for having a policy
James has bodily injury and property damage liability coverage for his auto insurance above the limits required by his state and would like to lower his premiums. How can he lower his premiums?
Decrease his deductible amount
Decrease his coverage amount to the state limit
Increase his coverage amount
Replace his vehicle with a more expensive one
Lily is deciding between homeowners insurance and renters insurance. Which is true about these two types of insurance?
Sophia is considering purchasing life insurance. What is the main purpose of life insurance for her?
To pay for the funeral
It insures that the person lives a longer life
To replace the loss of income of a wage earner who has passed away
To cover future education costs
John is trying to create a budget. Which of the following statements about fixed and variable expenses is correct?
Variable expenses are easier to predict than fixed expenses
Variable expenses can never be changed
Fixed expenses are typically easier to budget for than variable expenses
Fixed expenses always cost more than variable expenses
Anika recently took out a loan to buy a car. Which of the following is NOT a typical penalty she might face if she misses or is late on her loan payments?
Late payment fees
Free credit monitoring
Negative impact on credit score
Higher interest rate
Noah is considering investing his savings. What is a bond?
A loan to a corporation or government repaid with interest and the original principal.
Rohan is studying about the Federal Reserve System in his economics class. What is the primary function of the Federal Reserve System?
To serve as the central bank of the United States
Sophia wants to plan her finances for a vacation. Which of the following is the best example of a financial SMART goal?
What is lifestyle inflation?
What does a checking account always offer that a savings account does not?
Unlimited transactions, debit card, and check writing capabilities.
Avery is applying for a loan and the bank wants to check her credit score. A credit score is:
A measure of a person's creditworthiness
A type of bank account
A loan given by a bank
A form of identification
David recently checked his credit score and found it to be quite high. Identify positive impacts, on his personal life, of having a high credit score.
Lower interest rates on loans
Easier approval for credit cards.
Higher credit limits
Lower insurance premium
Liam is trying to improve his financial situation. Identify negative impacts, on his personal life, of having a low credit score.
Difficulty getting approved for loans
Higher interest rates on loans
Higher car insurance premium
Struggle to get hired for a job, especially one in finance
What are soft skills?
only relevant in leadership positions.
technical abilities related to specific tasks.
non-technical skills that relate to how you work and interact with others and apply to most jobs
Same as hard skills.
What are hard skills?
abilities or knowledge required to perform specific tasks for specific jobs
only related to personal interests.
soft interpersonal abilities.
vague and subjective traits.
What characteristics does a savings account have that a checking account does not?
Checks
Used for emergency funds
Fewer fees
What does 'capacity' refer to in the context of the 5Cs of Credit?
The borrower's personal character and trustworthiness
The economic conditions that might affect the borrower's ability to repay
The borrower's financial ability to repay the loan
In the 5Cs of Credit, which factor is concerned with the borrower's assets that can be pledged as security?
Conditions
Character
Collateral
Which of the 5Cs of Credit refers to the borrower's reputation for repaying debts?
Character
Capacity
Capital
Collateral
Which of the following is considered 'Collateral' in the 5Cs of Credit?
A borrower's credit score
A borrower's house used to secure a loan
A borrower's income statement
A borrower's employment history
Which of the following best describes the 'conditions' aspect of the 5Cs of Credit?
The borrower's assets and net worth
The economic environment and industry trends affecting the borrower's ability to repay
The borrower's credit history and repayment ability
What does the 'capital' component of the 5Cs of Credit refer to?
The borrower's income and employment stability
The borrower's assets and net worth
The borrower's credit score and history
What is a long-term financial goal?
What is diversification with investing?
Diversification is a risk management strategy that spreads investments across various asset classes to reduce risk
What are the potential consequences of not having health insurance?
What is the difference between scholarship and grants?
What is the most effective method to boost savings without increasing your income?
Reduce your discretionary spending
What is a dependent?
What leads to a tax refund?
What all is part of payroll taxes?
Social Security Tax
Unemployment Tax (only from the employer)
Medicare Tax
Federal and State Income Tax
What distinguishes a W-2 from a 1099 form?
Difference between unsubsidized and subsidized loans.
What is the role of FDIC?
