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FIN LIT FINAL

Total questions: 97

Worksheet time: 49mins

Name
Class
Date
1.
Which of the following ARE considered INVESTMENTS? CHECK ALL THAT APPLY:
a)
A certificate of deposit (CD)
b)
Stocks
c)
Bonds
d)
Mutual funds
e)
A car loan
2.
Which of the following statements is TRUE about the value of a college degree?
a)
The value of a college degree has decreased over time.
b)
College graduates tend to earn more over their lifetime compared to those without a degree.
c)
A college degree is the only path to financial success.
d)
The cost of a college degree always outweighs its benefits.
e)
Employers prefer candidates with work experience over those with a college degree.
3.
Which of these options lists the types of educational financial aid from MOST attractive to LEAST attractive?
a)
Private loans, Federal loans, Work-study, Grants/Scholarships
b)
Grants/Scholarships, Work-study, Federal loans, Private loans
c)
Federal loans, Grants/Scholarships, Work-study, Private loans
d)
Private loans, federal student loans, grants, scholarships, work-study
4.
A loan with a shorter term length will have __________ monthly payments, and you will pay __________ in total interest.
a)
higher, less
b)
lower, less
c)
lower, lower
d)
higher, higher
5.
What is a payday loan?
a)
A long-term loan with low interest rates.
b)
A short-term, high-interest loan typically due on the borrower's next payday.
c)
A loan specifically for purchasing a house.
d)
A government-subsidized loan with flexible repayment terms.
e)
A loan with no interest or fees.
6.
What FIVE FACTORS determine your CREDIT SCORE CHECK ALL THAT APPLY:
a)
Your payment history.
b)
# of times you apply for new credit
c)
Length of credit history.
d)
Your credit mix
e)
How much you owe (your unpaid debt).
7.
Why might someone choose a community or regional bank over a large national bank?
a)
More personalized customer service
b)
Higher monthly maintenance fees
c)
Fewer loan options
d)
Less access to ATMs
8.
How do most BNPL companies make money?
a)
They sell clothing online
b)
They ask customers to pay double later
c)
They get money from the government
d)
They charge up to 400% interest.
e)
They charge stores a fee when people use BNPL
9.
What is inflation?
a)
A decrease in the money supply, making goods cheaper
b)
The stock market growing at a rapid pace
c)
The overall rise in prices of goods and services over time
d)
A temporary drop in prices due to a sale or discount
e)
The government printing more money without any economic impact
10.
What is an overdraft?
a)
When a check takes too long to clear
b)
When you deposit more than your account limit
c)
When your account is frozen for review
d)
When you spend more money than you have in your account
e)
When a transaction is canceled by the bank
11.
What does Maslow's Hierarchy of Needs describe?
a)
A guide to building better time management skills.
b)
A ranking of professional skills for workplace success.
c)
A classification of personality traits based on behaviors.
d)
The levels of human needs, from basic survival to self-fulfillment.
e)
A chart explaining how ecosystems function.
12.
What is the main characteristic of the money value known as "money avoidance"?
a)
Prioritizing saving money above all other financial behaviors.
b)
Believing that wealth is the ultimate measure of success.
c)
Spending money impulsively without considering consequences.
d)
Using money as a tool to gain social status or power.
e)
Viewing money as negative and avoiding thinking about or dealing with it.
13.
What is the main characteristic of the money value known as "money worship"?
a)
Viewing money as negative and avoiding its influence.
b)
Believing money fuels happiness and solves most of life’s problems.
c)
Valuing financial security above all other goals.
d)
Using money primarily as a means to gain social power.
e)
Avoiding unnecessary spending to achieve long-term wealth.
14.
Our financial values influence our beliefs about:
a)
How satisfied and fulfilled by beauty and material possessions we are
b)
Appropriateness of financial decisions (is this the right choice for me?)
c)
Our desires to be alone or with others.
d)
Freedom and independence
15.
How does education generally affect income over a person’s lifetime?
a)
Education has no impact on income.
b)
People with higher levels of education tend to earn higher incomes.
c)
People with higher levels of education tend to earn lower incomes.
d)
Income is only influenced by work experience, not education.
16.
What does your "gross" pay describe?
a)
The amount of money you take home after taxes and deductions.
b)
The hourly wage you earn at your job.
c)
The total amount of money earned before any deductions.
d)
The total income earned in a year, including bonuses and benefits.
e)
The amount you receive after overtime pay is added.
17.
What does your "net" pay describe?
a)
The amount of money you take home after taxes and deductions.
b)
The total amount of money you earn before any deductions.
c)
The amount of overtime pay you receive in addition to your salary.
d)
The total annual salary before any bonuses or benefits.
e)
The hourly wage you earn at your job after tax deductions.
18.
What is the primary purpose of an emergency fund?
a)
To pay for vacations and leisure activities.
b)
To cover unexpected expenses, such as medical bills or car repairs.
c)
To invest in stocks and bonds for long-term growth.
d)
To save for a down payment on a house.
19.
What is mobile banking?
a)
Mailing checks using a mobile app
b)
Using your phone or device to manage your bank account online
c)
Transferring cash physically to your bank
d)
Calling your bank for paper statements
e)
Depositing coins through a kiosk
20.
What is a key benefit of using a P2P payment app?
a)
Free access to all credit services
b)
Automatic savings interest boosts
c)
Guaranteed cash rewards
d)
Fast and simple money transfers between individuals
e)
Offline access to funds
21.
Why is it important to check your bank statements regularly?
a)
To monitor transactions for errors or fraud
b)
To qualify for overdraft protection
c)
To receive bank rewards
d)
To apply for a credit card
e)
To enter bank sweepstakes
22.
What is a direct deposit?
a)
A wire sent through the post office
b)
A check that must be manually deposited
c)
A mobile banking alert
d)
A digital transfer of money from an employer or organization directly into your account
e)
A feature used only by government agencies
23.
What is online bill pay?
a)
A system that charges your debit card automatically at stores
b)
A way to get cash from your credit card
c)
A tool for printing bills from your phone
d)
A digital service that allows you to schedule and send payments electronically from your account
e)
An app for managing stock purchases
24.
What is the key factor to focus on when building savings?
a)
Only saving when you get birthday money
b)
Waiting for a big bonus to save
c)
Consistently setting aside money over time
d)
Storing cash at home
e)
Guessing what your balance is and hoping for the best
25.
Which of the following is NOT a good place to save for the future?
a)
401K
b)
Certificate of Deposit (CD)
c)
Checking account
d)
Money Market account
e)
Savings account
26.
What does a bank statement show you?
a)
Your credit score and school grades
b)
Your upcoming vacation schedule
c)
Your future income
d)
All your account activity over a period of time
e)
A list of your contacts
27.
Which of the following is true about high-yield savings accounts compared to regular savings accounts?
a)
High-yield savings accounts charge higher fees for withdrawals but offer a better customer service experience
b)
Regular savings accounts tend to have higher interest rates than high-yield accounts, especially at large banks
c)
High-yield savings accounts are typically only offered by credit unions and not by banks
d)
High-yield savings accounts usually offer significantly higher interest rates, but they may require higher minimum balances or limited withdrawals
e)
Regular savings accounts have more flexible terms and fewer restrictions than high-yield savings accounts
28.
As SAVERS & INVESTORS, why should we care about inflation?
a)
It has no impact on investments or savings
b)
It guarantees that all investments will grow at a faster rate
c)
It only affects people who do not invest in the stock market
d)
It makes all goods and services cheaper over time
e)
It decreases the value of money, meaning savings may buy less in the future
29.
Why do people invest in stocks?
a)
To guarantee they will never lose money
b)
To avoid paying any taxes on their income
c)
Because all stocks increase in value over time without risk
d)
To earn a return on their money through potential growth and dividends
e)
To store money in a way that is safer than a bank account
30.
What is a “certificate of deposit”?
a)
A type of investment that lets you trade stocks
b)
A loan given to companies to fund operations
c)
A government bond with no interest payments
d)
A savings account with a fixed interest rate and a set time period
e)
A credit card with a set monthly payment
31.
How can someone make money from investing in a stock?
a)
They sell the stock for a lower price than what they bought it for
b)
By selling the stock at a higher price than the purchase price.
c)
By receiving a fixed interest payment from the stock.
d)
By using the stock as collateral for a loan.
e)
By accumulating points for purchases made with the stock.
32.
Which statement best describes what Social Security is and how it works?
a)
Social Security is a savings account that individuals contribute to for their retirement.
b)
Social Security is an investment fund managed by private companies for retirees.
c)
Social Security only provides benefits to low-income individuals.
d)
Social Security is a loan program that requires repayment after retirement.
e)
Social Security is a government program that provides financial assistance to retired individuals and is funded through payroll taxes.
33.
Which best describes the difference between secured and unsecured loans?
a)
Secured loans require collateral, while unsecured loans do not.
b)
Secured loans have a higher interest rate than unsecured loans.
c)
Secured loans are only available to individuals with good credit, while unsecured loans are available to anyone.
d)
Secured loans do not require a credit check, but unsecured loans do.
34.
What is the main benefit of taking out a federal student loan instead of a private loan?
a)
Federal student loans offer lower interest rates and more flexible repayment options.
b)
Federal student loans do not need to be repaid after graduation.
c)
Federal student loans offer more money than private loans.
d)
You will have a higher interest rate for a federal student loan.
35.
Which of the following types of credit typically has the LOWEST interest rate?
a)
Payday Loan
b)
Auto Loan
c)
Buy Now, Pay Later
d)
Credit Cards
e)
Mortgage
36.
A loan with a LONGER term length will have __________ monthly payments, and you will pay __________ in total interest.
a)
higher, less
b)
higher, more
c)
lower, less
d)
lower, more
37.
Why do most borrowers only pay attention to the monthly payment?
a)
It shows exactly how much interest they’re paying
b)
They always choose the payment with the most rewards
c)
They don’t care how long the loan takes to pay off
d)
It’s easier to focus on the short-term cost than the total loan
e)
It’s the only number the lender is required to show
38.
Why are payday loans considered controversial?
a)
They offer low-interest rates
b)
They primarily target high-income individuals
c)
They often target vulnerable and low-income populations with high fees and interest rates
d)
They are supported by consumer advocacy groups
39.
What is a FAFSA?
a)
A type of scholarship
b)
A test to get into college
c)
An online loan repayment tool
d)
A form used to apply for financial aid and student loans
e)
A student budgeting website
40.
What are some key differences between a checking and a savings account? Check all the apply!
a)
Interest rates are higher for savings accounts.
b)
You can only write checks from your savings account.
c)
You can only write checks from your checking account.
d)
Checking accounts are used for everyday purchases; savings are not.
e)
Only savings accounts are insured by the FDIC.
41.
How do banks typically make money? Check all that apply.
a)
Charging interest on loans that they give to customers.
b)
Paying interest on savings accounts to their customers.
c)
Charging fees for things like ATM withdrawals and overdrafts.
d)
Charging for popcorn in the lobby of most branches.
e)
Receiving large payments from the federal government.
42.
What questions should you ask before opening an account at a national bank, community bank, or credit union? (choose all correct answers)
a)
What type of fees are there with this account?
b)
Is there a fee for using an ATM? If so, how much?
c)
Is there a minimum balance requirement with this account?
d)
Do you offer online banking or mobile banking?
e)
Is there popcorn?
43.
How does investing in the stock market differ from putting money in a savings account at a bank?
a)
A savings account typically offers higher returns compared to the stock market.
b)
The stock market is risk-free, while savings accounts carry significant risk.
c)
Investing in the stock market involves higher risk but the potential for higher returns, while a savings account offers lower risk with guaranteed, lower returns.
d)
Money in a savings account is inaccessible, while investments in the stock market are liquid.
44.
The details of any loan will include the following 3 components:
a)
The principal, the interest rate, and the loan term
b)
The money you pay, the money the lender pays, and the principal
c)
The mortgage, the auto loan, and the small business loan
d)
The loan amount, the credit card payment, and the statement
e)
Interest rate, employment status, credit score
45.
What are the goals of investing? CHECK ALL THAT APPLY:
a)
To avoid paying taxes
b)
To get rich as quickly as possible.
c)
To grow your wealth over time
d)
To achieve long-term financial goals, such as retirement or education funding
e)
To slowly and steadily lose money over time.
46.
What is the best, simple definition of a bond?
a)
A type of stock representing ownership in a company.
b)
A loan to a company or government given by an investor.
c)
A certificate of deposit issued by a bank.
d)
A share of a mutual fund.
e)
A type of insurance policy.
47.
What is simple interest?
a)
Interest calculated on the initial principal only
b)
Interest calculated on the initial principal and any previously earned interest
c)
Interest that varies based on market conditions
d)
Interest calculated using complex mathematical formulas
e)
Interest that is deducted from the principal amount of a loan each month.
48.
What is compound interest?
a)
Interest calculated only on the initial principal amount.
b)
Interest that is deducted from the principal amount.
c)
Interest calculated on the initial principal and also on the accumulated interest of previous periods.
d)
Interest that remains constant over time.
e)
Interest that is only applicable to short-term loans.
49.
Which of the following is an effective strategy for personal saving?
a)
Wait until the end of the month and save whatever is left in your checking account
b)
Save a certain percentage of each paycheck and deposit it directly into a savings account
c)
Cover all of your wants and needs and save whatever is left over
d)
Take out a payday loan so you can save before you receive your paycheck
50.
Fill in the blanks with the correct responses. If you follow the 50-30-20 rule of budgeting, you'll be putting 50% of your monthly income toward _______________, 30% of your monthly income toward _____________, and 20% of your monthly income toward ______________.
a)
Needs, wants, savings
b)
Savings, needs, wants
c)
Needs, savings, wants
d)
Wants, needs, savings
51.
Experts recommend that you accumulate enough to cover 3 to 6 months of _________________ in your emergency fund?
a)
Total Living expenses
b)
Months
c)
Entertainment expenses
d)
Clothing expenses
e)
Transportation expenses
52.
This is a type of investment designed to match the performance of a specific market index, such as the S&P 500.
a)
An Index Fund
b)
A 529 plan
c)
A 401K
d)
A Bond
e)
Social Security
53.
You are at the checkout counter at the local supermarket and use your debit card to pay for your groceries. Where does the money for this purchase come from?
a)
It is deducted directly from your checking account
b)
Your credit card company covers the cost
c)
Your credit card company provides you with a cash advance to cover the cost
d)
It is deducted directly from your savings account
e)
The money is borrowed from the supermarket.
54.
Which of the following statements about savings accounts is FALSE?
a)
Savings accounts pay interest on the money you deposit.
b)
Savings accounts allow an unlimited amount of withdrawals each month.
c)
Savings accounts may require you to maintain a minimum balance to avoid paying a fee.
d)
Savings accounts are best used to store money for longer-term goals.
55.
Which of the following options best describes what a credit score is?
a)
A numerical value that represents an individual's creditworthiness
b)
The total amount of money a person owes to creditors
c)
The income level of an individual
d)
The number of credit cards a person possesses
e)
The interest rate charged on a loan
56.
Which is best for everyday purchases?
a)
Debit Card
b)
Credit Card
c)
Payday Loan
d)
Mortgage
e)
Buy Now. Pay Later Loan
57.
A high _______________can help you get great interest rates on loans or help you rent an apartment?
a)
Credit Score
b)
Portfolio
c)
Deduction
d)
Uncle
e)
Annual income
58.
What is the stock market?
a)
A place where people buy and sell stocks & bonds.
b)
A place where people buy and sell goods
c)
A place where people buy and sell real estate
d)
A place where people buy and sell cars
e)
A stock market is an online platform for buying and selling real estate.
59.
What is "opportunity cost"?
a)
The benefits that we gain when choosing one way of using our money over another.
b)
The price that you pay for each opportunity to check your credit score.
c)
The amount of interest you must pay in order to purchase a car.
d)
The potential gain that is lost when one alternative is chosen over another.
e)
The cost of goods and services in a free market economy.
60.
Which of the following will has the highest average fee?
a)
NMF (No Money Fee)
b)
Overdraft Fee
c)
Out-of-Network ATM fee?
d)
Monthly Maintenance Fee
e)
Account lubrication fee (ALF)
61.
How does when you start saving for retirement impact how much you will need to save?
a)
Starting early allows for more time for compound interest to grow your savings, requiring less money to be saved overall.
b)
Starting early increases the amount needed to be saved due to longer retirement period and inflation.
c)
Starting late requires less money to be saved due to shorter retirement period.
d)
Starting late increases the amount needed to be saved due to higher interest rates on loans and credit cards.
e)
Starting early reduces the need to save altogether as Social Security benefits will cover retirement expenses.
62.
What is an account balance when referring to a checking account?
a)
The amount of money in a person's bank account at a specific time.
b)
The total amount of money a bank has.
c)
The interest earned on a savings account.
d)
The maximum amount of money you can withdraw from an ATM in one transaction.
e)
The interest earned on a checking account balance.
63.
What is a stock market index?
a)
A measurement of the performance of a group of stocks
b)
A type of bond
c)
A type of stock
d)
A type of mutual fund
e)
A government agency responsible for regulating financial markets.
64.
What are the three major stock market indexes? Choose all that apply.
a)
The Dow Jones
b)
The NASDAQ
c)
The S&P 500
d)
The NASAL
e)
The NORAD
65.
What is “APR”?
a)
Annual Percentage Rate
b)
Annual Purchasing Rate
c)
Actual Payment Rate
d)
Actual Percentage Rate
e)
Annual Payment Rate
66.
How do you avoid paying interest on a credit card?
a)
By paying the full statement balance by the due date
b)
By making only the minimum payment each month
c)
By using the credit card for all purchases
d)
By making cash withdrawals using the credit card
e)
By transferring the balance to another credit card
67.
What is the OUTCOME of only making minimum payments on a credit card?
a)
Paying more interest over time and taking longer to pay off the debt
b)
Paying off the balance faster
c)
Accumulating less interest
d)
Improving credit score
e)
Avoiding late fees
68.
What happens when you don't have enough money in your checking account to cover your transactions, but your financial institution pays for your purchase anyway?
a)
You are charged overdraft fees
b)
You are charged extra interest on your account
c)
The bank will cover the cost for you at no charge.
d)
Credit card reward
e)
Bankruptcy filing
69.

What is the primary purpose of a credit score?

a)

To assess your eligibility for government benefits

b)

To calculate your monthly expenses

c)

To evaluate your creditworthiness for loans and credit cards

d)

To determine your annual income

70.

Which of the following is a benefit of having a diversified investment portfolio?

a)

Increased tax liabilities

b)

Guaranteed high returns

c)

Reduced risk through asset allocation

d)

Elimination of all investment risks

71.

What is the main advantage of using a budget?

a)

It guarantees financial success

b)

It eliminates the need for savings

c)

It helps you track and manage your income and expenses

d)

It allows you to spend without limits

72.

Which of the following is a common reason for creating a budget?

a)

To increase spending on luxury items

b)

To avoid paying taxes

c)

To eliminate the need for savings

d)

To track and manage expenses effectively

73.

What is the main purpose of a credit score?

a)

To predict your future financial success

b)

To calculate your monthly expenses

c)

To assess your creditworthiness for lenders

d)

To determine your annual income

74.

Which of the following is a good strategy for managing your monthly budget?

a)

Spend first, save what is left over

b)

Track your expenses and adjust your spending as needed

c)

Only budget for large purchases

d)

Ignore your bills until the end of the month

75.

Why is it important to diversify your investments?

a)

To avoid paying any taxes

b)

To ensure all your money is in one place

c)

To reduce risk by spreading money across different assets

d)

To guarantee high returns every year

76.

Which of the following best describes a budget?

a)

A plan for how to spend and save your money

b)

A type of bank account

c)

A loan you take from a bank

d)

A list of your favorite stores

77.

What is the main purpose of an emergency fund?

a)

To invest in the stock market

b)

To buy luxury items

c)

To cover unexpected expenses like medical bills or car repairs

d)

To pay for vacations

78.

Which of the following is a benefit of using credit responsibly?

a)

It eliminates the need for a budget

b)

It allows unlimited spending without consequences

c)

It guarantees you will never pay interest

d)

It can help build a good credit history

79.

Which of the following best describes a credit score?

a)

A number that represents your annual income

b)

A measure of your ability to repay borrowed money

c)

A list of all your previous employers

d)

The total amount of money in your savings account

80.

What is the main advantage of setting a monthly budget?

a)

It increases your credit card limit automatically

b)

It helps you track income and expenses to manage your finances better

c)

It eliminates the need for a bank account

d)

It guarantees you will never spend money

81.

Which of the following is a consequence of missing multiple credit card payments?

a)

You will automatically qualify for a loan

b)

Your interest rate will be lowered

c)

You will receive a bonus from your bank

d)

Your credit score may decrease

82.

Which of the following is a potential risk of taking out a payday loan?

a)

Receiving government grants

b)

Building a strong credit history

c)

Earning rewards points

d)

Paying high interest rates and fees

83.

What is one advantage of using a high-yield savings account?

a)

It is only available to business owners

b)

It allows unlimited withdrawals without penalty

c)

It offers higher interest rates than regular savings accounts

d)

It requires no minimum balance

84.

Why is it important to diversify your investments?

a)

To guarantee a profit every year

b)

To avoid paying any taxes

c)

To ensure all investments are in one company

d)

To reduce risk by spreading money across different assets

85.

Which of the following is a benefit of using a credit card responsibly?

a)

It eliminates the need to budget

b)

It helps build a positive credit history

c)

It increases your total income automatically

d)

It guarantees you will never pay interest

86.

What is the main consequence of only making the minimum payment on your credit card each month?

a)

It will take longer to pay off your debt and you will pay more in interest

b)

You will avoid paying any interest

c)

Your credit limit will automatically increase

d)

Your balance will be paid off quickly

87.

Which of the following actions can negatively impact your credit score when using a credit card?

a)

Keeping your credit utilization low

b)

Reviewing your monthly statements for errors

c)

Making late payments or missing payments

d)

Paying your balance in full every month

88.

Which of the following is a potential risk of keeping all your savings in cash at home?

a)

Risk of theft or loss with no interest earned

b)

Protection from inflation

c)

Earning high interest on your savings

d)

Building a credit history

e)

Automatic bill payments

89.

What is the main advantage of compound interest over simple interest?

a)

Simple interest grows your money faster

b)

Simple interest is calculated daily

c)

Compound interest is always tax-free

d)

Compound interest allows you to earn interest on both the principal and previously earned interest

e)

Compound interest is only available for loans

90.

Which of the following best describes confirmation bias?

a)

The tendency to overestimate our own abilities.

b)

The tendency to avoid making decisions.

c)

The tendency to remember only negative experiences.

d)

The tendency to seek out information that supports our existing beliefs.

91.

What is the anchoring effect in decision making?

a)

Ignoring all available information before making a choice.

b)

Changing your opinion frequently based on new information.

c)

Making decisions based on emotions rather than facts.

d)

Relying too heavily on the first piece of information encountered when making decisions.

92.

Which scenario is an example of the availability heuristic?

a)

Making a decision after thorough research.

b)

Trusting only information from experts.

c)

Choosing a product because it is the most expensive.

d)

Believing plane crashes are more common than they are because of recent news coverage.

93.

Which of the following best describes diversification in investing?

a)

Keeping all your money in a savings account

b)

Only investing in government bonds

c)

Spreading your investments across different asset types to reduce risk

d)

Investing all your money in a single stock

94.

What is a mutual fund?

a)

A type of loan offered by banks

b)

A collection of stocks, bonds, or other securities managed by a professional

c)

A credit card reward program

d)

A government savings program

95.

Which factor is most important to consider before making an investment?

a)

How many friends have invested in it

b)

Whether the investment is trending on social media

c)

Your risk tolerance and investment goals

d)

The color of the company's logo

96.

Which of the following is considered a low-risk investment type?

a)

Penny stocks

b)

Venture capital

c)

Savings account

d)

Cryptocurrency

97.

Which investment type typically offers ownership in a company?

a)

Bonds

b)

Stocks

c)

Certificates of deposit

d)

Savings accounts