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WorksheetsFinancial Literacy and Decision Making
Total questions: 100
Worksheet time: 50mins
Name
Class
Date
1.
All of the following are true about prepaid cards EXCEPT…
a)
Prepaid cards typically include a lot of fees
b)
Prepaid cards are a useful option for someone who is unbanked to make online purchases
c)
Prepaid cards are a great way to build credit
d)
Prepaid cards are usually accepted anywhere that debit and credit cards are accepted
2.
All of the following are downsides of being unbanked EXCEPT:
a)
Lack of access to credit
b)
Lost time paying bills
c)
Lack of fees associated with banks
d)
Difficulty making cashless purchases
3.
Which of the following scenarios BEST demonstrates FOMO (Fear of Missing Out)?
a)
Megan takes a baking class after seeing a sign for the class at her favorite bakery
b)
David goes on a vacation to Europe and posts about it on social media every day
c)
Angela sees an advertisement for a pair of shoes and decides to buy them
d)
José wants to go see a movie that all of his friends have seen and are raving about
4.
You earn a salary of $40,000 per year and decide to save 20% of your gross pay. You set a goal of creating a $16,000 emergency fund. How long will it take for you to achieve your goal?
a)
6 months
b)
1 year
c)
2 years
d)
3 years
5.
If you are trying to substantially reduce the amount you spend on food, you should try...
a)
Cooking your own food at home for as many meals as possible
b)
Dining at restaurants more often so you don't waste water doing dishes
c)
Eating more snacks on the go and way fewer meals at home
d)
Drinking more coffee and soda so you are not as hungry for food
6.
Leila just graduated from college and is comparing a few different cities to move to. Which of these factors is the LEAST important thing for her to consider right now?
a)
Average rent for an apartment
b)
Food and grocery store options in the area
c)
Employment opportunities
d)
Average cost of Uber, Lyft, or taxi fare
7.
Greg is trying to decide whether he needs a car when he moves to the city. Which of the following would be a reason for Greg to get a car rather than use public transportation?
a)
There are several public transportation routes between Greg's apartment and work
b)
The cost of public transportation is less than Greg’s monthly car payment
c)
Greg’s company covers half the cost of his monthly public transportation pass
d)
Using public transportation, Greg’s commute to work one-way is two hours
8.
Which of these boxes of cereal has the LOWEST unit price?
a)
Cereal A, which costs $3.20 for a 16 oz. box
b)
Cereal B, which costs $5.00 for a 32 oz. box
c)
Cereal C, which costs $2.50 for a 10 oz. box
d)
Cereal D, which costs $4.50 for an 8 oz box
9.
Isaiah has a summer internship at a technology company and is paid $3,000. After Federal and state taxes, Social Security, and Medicare are deducted, his take-home pay is $2,500. Which of the statements below is correct?
a)
His gross pay is $2,500 and net pay is $3,000
b)
His gross and net pay are $3,000
c)
His gross and net pay are $2,500
d)
His gross pay is $3,000 and net pay is $2,500
10.
You are putting together your first post-graduation budget. Your net pay is $2,500 per month and you estimate that your monthly expenses will be $2,625. Which of the following is TRUE?
a)
You have an extra $125 each month that you can spend on a fun or leisure activity
b)
You can invest a portion of your monthly income into a retirement fund, as your expenses are well within your budget
c)
You need to either cut back on your spending or find an additional source of income to balance your budget
d)
You have room in your budget to make philanthropic donations to your favorite charity
11.
You are interested in renting an apartment after graduating college. You meet with the landlord and complete the application. All of the following may need to be provided when you sign your lease EXCEPT
a)
Proof of employment
b)
A bank account
c)
First and last month's rent
d)
A security deposit
12.
All of the following are good budgeting strategies if you want to save money at the grocery store EXCEPT:
a)
Focusing on unit price when comparing similar products
b)
Building a weekly meal plan around items you already own or items that are on sale that week, rather than just choosing foods you'd like to eat
c)
Focusing only on the price when comparing similar products
d)
Preparing a grocery list before you go to the store and avoiding buying items that aren’t on the list
13.
Which description is most accurate for a Zero-Based Budget?
a)
You put every dollar of your net pay into a budget category each month
b)
You spend your checking account balance down to $0 every month
c)
You spend your saving account balance down to $0 every month
d)
You pay every one of your debts down to $0 every month
14.
For two months in a row, Aaron realizes he has gone over budget by roughly $175. Which of these options makes the most sense for him to fix his problem?
a)
Cancel one of his streaming video subscriptions and go out to dinner three fewer times each month with friends
b)
Start paying just the minimum monthly payment on his student loan and credit card debt, instead of the extra he's been contributing
c)
Contribute $100 less to savings each month and $75 less to his retirement fund
d)
Sell his current car and get a less expensive vehicle
15.
You're considering moving into a 3 bedroom apartment with 2 roommates, rather than living on your own post-college. Which of your expenses would likely decrease by having roommates?
a)
Groceries and eating out
b)
Rent
c)
Cell phone bill
d)
Bedroom furniture
16.
When living in a rural area, you are most likely to...
a)
Rely heavily on public transportation like buses and trains for daily commuting
b)
Often walk or bike to most destinations due to close proximity of amenities
c)
Frequently use ride-sharing services for everyday travel
d)
Depend mostly on personal vehicles, such as cars or motorcycles, for transportation
17.
You overhear your cousin talking about the importance of creating and sticking to a budget. All of the following are good reasons to create and stick to a budget EXCEPT:
a)
A budget can help you identify any bad spending habits
b)
Using a budget can allow you to work towards your financial goals
c)
Having a budget can help you create an emergency fund
d)
Having a budget is a requirement for obtaining a mortgage
18.
Which one of these expenses most likely represents a VARIABLE cost in someone's budget?
a)
Electricity bill
b)
Rent
c)
Car insurance premium
d)
Student loan payment
19.
What action corresponds to the advice "Pay yourself first?"
a)
Wait until the end of the month to determine how much you have leftover to save
b)
Set aside a fraction of your paycheck into a savings account before you start spending
c)
Spend your regular paycheck on needs and wants but funnel any extra money into saving
d)
Become self-employed so you're paying yourself instead of being paid by an employer
20.
Which of the following is TRUE about a lease agreement?
a)
A lease is an agreement between you and your roommates that you submit to the apartment owner.
b)
You never have to pay any fees when you sign a lease. If you do, that means it is a scam.
c)
A lease often has information about your prior housing experience; it's a record that the apartment owner can use to see if you are a good candidate
d)
A lease is an agreement that includes details about rent, apartment policies, vacating, etc.
21.
Which of the following accurately describes the envelope budgeting strategy?
a)
Putting cash for different spending categories into separate envelopes and only spending what's in each envelope
b)
Regularly buying investments like stocks or bonds with a certain amount of money each month
c)
Saving a small part of your income every week to buy something big at the end of the year
d)
Keeping a written record of all of the money you receive and spend in a notebook to see where your money goes
22.
One way the grocery store tricks you into spending more money than you budgeted for is...
a)
Being open early in the morning and late at night
b)
Paying their cashiers and baggers more
c)
Putting high priced items at eye level and lower cost items above or below eye level
d)
Accepting digital and print coupons
23.
Janine is considering what auto costs she is going to have after buying a new car. She has budgeted enough money for the monthly auto loan payment, gas, and auto insurance. Has Janine factored in all of the costs associated with car ownership?
a)
Yes, these are the three costs she should expect to pay once she is a car owner
b)
No, she does not need to include the cost of auto insurance as it is included in her auto loan payment.
c)
No, she needs to factor in other costs such as maintenance, emergency repairs, etc.
d)
No, she does not need to include the cost of gas as it is covered under her auto insurance policy
24.
All of the following statements about bank accounts are true EXCEPT…
a)
If the bank is FDIC-insured, your money, up to the FDIC limit, is safe even if the bank fails
b)
Many banks pay interest on the money you deposit into your savings account
c)
Historically, savings accounts earn higher returns than investments in the stock market
d)
Money in a checking account is usually easy to access via ATM, debit card or check
25.
Which statement accurately describes how the 50/20/30 Rule would break down your take-home pay?
a)
50% on wants, 20% on saving, and 30% on needs
b)
50% on saving, 20% on needs, and 30% on wants
c)
50% needs, 20% on saving, and 30% on wants
d)
50% on saving, 20% on wants, and 30% on needs
26.
A good rule of thumb when budgeting for a home is to expect to make a _______ down payment.
a)
5%
b)
10%
c)
20%
d)
35%
27.
What does the term "withholding" mean in reference to your paycheck?
a)
The amount of your paycheck that you are NOT being taxed on
b)
How much you are going to owe the government when you file your annual tax return
c)
How much you earn and includes salary, bonus and commissions
d)
How much is being taken out of your paycheck for things like taxes, employer sponsored health insurance, and retirement
28.
When do you start paying income taxes?
a)
When you turn 18
b)
When you get a full-time job (part-time does not count)
c)
When you make more than the minimum income requirement
d)
When you are notified by the IRS that you are required to pay federal income taxes
29.
Why is it important to be extremely careful when completing your 1040 form?
a)
Making a mistake will disqualify you from receiving future refunds
b)
The 1040 form determines whether you owe additional taxes or are entitled to receive a refund from the government
c)
Completing the 1040 incorrectly will mean the wrong amount of taxes will be withheld from your paychecks going forward
d)
Mistakes on your 1040 form make you ineligible for employment during the next year
30.
If your only income is salary paid by your employer, which of these statements about filing your taxes is true?
a)
You need to file your tax return by the end of the calendar year (typically December 31st)
b)
If your employer takes out federal income taxes through payroll withholdings, you do not need to file a tax return
c)
You must file your tax return by the deadline (typically April 15th of the following year) or request an extension by that date
d)
You do not need to pay any income taxes until April 15th, so you should ask your company to wait until after that date to withhold any money
31.
You are starting your first job and you are asked to complete some paperwork on your first day. Which form will determine how much money is withheld from your paycheck for taxes?
a)
W-4
b)
W-2
c)
I-9
d)
1040
32.
Which of the following paycheck withholdings puts money into a retirement investment fund that you will manage?
a)
Social Security
b)
Medicare
c)
401(k) contribution
d)
Federal income taxes
33.
Which of the statements about this W-4 is TRUE?
a)
Mr. Khan is filing as married filing jointly
b)
Mr. Khan is requesting for an additional $50 to be withheld from his paycheck
c)
Mr. Khan submitted this W-4 two days after he started working at Little Company Inc.
d)
Mr. Khan’s paycheck will have less money withheld from his paycheck since he is claiming a dependent
34.
Elaine just accepted a new job and is working with the company’s HR department to fill out paperwork. Which of the following steps is she responsible for?
a)
Determine how much tax to withhold from her paychecks based on W-4 information
b)
Complete a W-4 form
c)
Send withholding amounts to the federal government
d)
Complete a W-2 form
35.
What is the name of the tax form that requires you to provide identification and proves you are eligible to work in the U.S.?
a)
I-9
b)
1099
c)
1040
d)
W-4
36.
Which of the following statements about this W-2 form is true?
a)
Avia Consulting will use this W-2 to file their 1040 form
b)
Lily earned about $117,000 over the year based on the total of her Wages, Social Security wages, and Medicare wages
c)
Lily paid state income taxes of $1,189.90
d)
Lily works in the same city that Avia Consulting is based in
37.
When you complete your 1040 form, if you overpaid your taxes and the government owes you money, that is called a __________.
a)
withholding
b)
direct deposit
c)
deduction
d)
refund
38.
Question #1 of 3: What was the net (or take-home) pay for this employee for this pay period?
a)
$335.10
b)
$400.00
c)
$2,680.80
d)
$3,200
39.
Question #2 of 3: How much did this person pay towards Medicare in this pay period only?
a)
$5.80
b)
$24.80
c)
$44.50
d)
$52.20
40.
Question #3 of 3: How frequently is this employee paid?
a)
Daily
b)
Every other week
c)
Weekly
d)
Monthly
41.
Your friend Laila is talking to you about the benefits of tax filing websites. Which of the following is true?
a)
Filing your taxes using a website is always free of charge
b)
You are guaranteed a higher refund than if you were to use a paper form or hire a professional
c)
If you owe money to the IRS, you receive a discount if you e-file use a tax filing website
d)
You can avoid the costs of having to pay a professional, though you may have to pay for e-filing online
42.
Which of the following describes what a "dependent" is for tax purposes?
a)
A child or adult that you support financially
b)
Someone who is temporarily disabled
c)
An adult who financially supports you
d)
Someone who is a full-time student under the age of 30
43.
If a taxpayer fills out their W-4 in a way that does not withhold enough money to cover their tax obligation, what is the most likely outcome after they file their taxes?
a)
They will receive a refund
b)
They will owe a payment to the IRS
c)
They will be audited
d)
They will be charged with tax evasion
44.
Which of the following statements about the W-2 form is TRUE?
a)
A W-2 lists all the money you earned in cash over the last year
b)
The total wages you earned from ALL jobs you worked in the previous year appear on ONE W-2 form
c)
You need a separate W-2 form from EACH of your employers in order to file your taxes
d)
The W-2 includes information about the interest you earned from your investments
45.
Akshay worked at a cafe while he was a college senior in Boston, Massachusetts. After graduating in June, he moved back to his home in California and started a full-time job in September. Which of the following statements is true?
a)
Akshay will need to file only a federal tax return
b)
Akshay will need to file a federal tax return and a state tax return for Massachusetts
c)
Akshay will need to file a federal tax return and a state tax return for both Massachusetts and California
d)
Akshay will need to file a federal tax return this year and file state returns the following year
46.
What is an insurance premium?
a)
Your monthly payment to your insurer, regardless of whether you use any services
b)
A list of the procedures covered by your insurance carrier
c)
An added cost you pay in order to receive higher-quality services
d)
The amount you pay out-of-pocket for a specific procedure or service
47.
When setting your premium, your car insurance company may consider each of the following EXCEPT...
a)
How many miles you drive per year
b)
Your age
c)
Your driving record
d)
Your height
48.
Insurance companies make money by...
a)
Refusing to pay out claims to policyholders
b)
Collecting money from the government
c)
Collecting more in premiums than they need to pay out each year
d)
Keeping costs low with minimal advertising
49.
Which of the following statements is TRUE about auto insurance premiums?
a)
If you have an auto insurance policy and don't get into a car accident or file any claims for a year, you get your premiums back from the insurance company
b)
If you have an auto insurance policy and get into multiple accidents within one year, your premium amount will decrease
c)
Auto insurance premiums are a fixed price across all insurance companies
d)
If you have an auto insurance policy and get into multiple accidents within one year, your premium amount will increase
50.
Someone broke into Sam’s car by smashing the passenger window. Which type of auto insurance coverage will help cover the cost to get the window replaced?
a)
Bodily injury liability
b)
Property liability
c)
Collision
d)
Comprehensive
51.
Why would someone choose to get long term disability insurance even if they already have health insurance?
a)
Long term disability only covers medical bills, while health insurance will help compensate for lost work with 40-60% of their income
b)
Long term disability insurance plans can also extend coverage to family members and pets
c)
Health insurance only covers regular check ups, while long term disability insurance also covers emergencies
d)
Health insurance only covers medical bills, while long term disability will help compensate for lost work with a percentage of their income
52.
You cause an accident and injure the other driver. The case goes to trial and there is a verdict to compensate the injured person with $58,000. You have a $75,000 coverage limit per person for Bodily Injury. How much will the insurance company pay?
a)
$0
b)
$17,000
c)
$58,000
d)
$75,000
53.
Medicaid generally provides insurance for which of the following groups of people?
a)
The elderly or disabled
b)
Individuals in low-income households
c)
Anyone who wants to buy coverage from the Marketplace
d)
Employees who have a government position
54.
Your employer offers an employer-sponsored health insurance plan. Which of the following statements is TRUE?
a)
You can only see doctors who are also employees of the same company
b)
Your health insurance premiums will be paid directly from your paycheck, pre-tax
c)
Your employer cannot fire you if you get sick or injured because you have employer-sponsored health care
d)
You can remain on that health insurance plan even if you switch jobs
55.
Which person will probably have the MOST expensive health insurance premiums?
a)
Julian, who has 3 children and is eligible for Medicaid
b)
Samantha, a widow who is eligible for Medicare
c)
Patty, who works as an administrative assistant for an employer with a group plan
d)
Robin, a high earning business owner who buys a plan for their whole family on the Marketplace
56.
What type of auto insurance are you required to carry in almost every state (49 out of 50)?
a)
Insurance if you damage your own property
b)
Insurance if you cause injury to another person
c)
Insurance in case you get into an accident with someone who does not have insurance
d)
Insurance if you cause injury to yourself
57.
Bruce has just graduated from college and decides that instead of paying for insurance, he'll work on building up his emergency fund. This way, if something goes wrong, he can just pay for it using cash. Why is this a risky idea?
a)
It is mandatory to have auto, health, life, disability, and renters/home insurance, so he'll have to pay 5 penalties per year for not enrolling in these insurance types
b)
An accident or illness can strike at any time and be quite expensive, so it's possible he'd need a big sum of money well before his emergency fund was large enough
c)
Having insurance not only protects you financially, but also physically, so he'll be less likely to experience illness or accident if he has insurance
d)
The sooner he starts paying for insurance, the sooner he will reach his maximum lifetime requirement and can stop paying altogether for coverage
58.
Your parents tell you that on your 22nd birthday, they would like for you to get your own health insurance. You are very healthy, are not taking any prescription medicines, and generally only see your doctor for your annual physical. What type of health insurance is likely to be best for you?
a)
A low deductible plan with a high monthly premium
b)
A high deductible plan with a low monthly premium
c)
Your parents MUST keep you on their plan. They cannot legally remove you.
d)
You do not need health insurance because you are healthy
59.
In general, how do insurance companies decide how much to charge an individual for their monthly premiums?
a)
The company assesses the individual's risk factors and assigns higher premiums to higher risk individuals
b)
The company looks at the individual's tax filings from the previous year to assess overall wealth and ability to pay
c)
The company charges the same premium for every individual eligible for coverage
d)
The company increases or decreases premium rates based on the stock market
60.
Which of the following insurance coverage options would be the lowest priority for a typical single person, with no children, 1-2 years out of high school?
a)
Health Insurance
b)
Auto Insurance (if they have a car)
c)
Life Insurance
d)
Renter's Insurance (if they are renting an apartment)
61.
Finn moves from a rented apartment into his very first house. What should he expect regarding the cost of homeowners insurance compared to renters insurance?
a)
He will not need homeowners insurance, because owning a home is less risky than renting
b)
His homeowners insurance will be LESS expensive than his renters insurance was
c)
His homeowners insurance will be the same cost as his renters insurance was
d)
His homeowners insurance will be MORE expensive than his renters insurance was
62.
Which of these costs would be the MOST difficult to adjust if you were looking to reduce your expenses?
a)
Dining out at local restaurants
b)
Loan payment on a new car
c)
Expenses for new clothes
d)
Postponing a purchase for a big-screen TV
63.
What are the two most important factors in calculating your credit score?
a)
Payment history and types of accounts
b)
Amounts owed and length of credit history
c)
Payment history and credit utilization
d)
Length of credit history and new credit inquiries
64.
All of the following would show up on a credit report EXCEPT...
a)
Salary of your current job
b)
Payment history of your car loan
c)
Credit card payment history
d)
Student loan activity
65.
Your friend confides in you that he has a low credit score. What is the single best way for him to improve his score?
a)
Cancel his credit cards
b)
Make on-time payments
c)
Get a car loan
d)
Check his credit score
66.
Melvin is 19 years old and wants to begin establishing a credit history. Which action should he take to meet that goal?
a)
Always say "credit" when asked "credit or debit?" at a store
b)
Ask his parents to cosign a credit card or add him as an authorized user on their credit card
c)
Any time he borrows money from a friend or family member, be sure to pay it back promptly
d)
Take out some private student loans, even though he doesn't need them because he has grants and scholarships
67.
Frank and Jasmere are each shopping for a new car for themselves. Each will need a $20,000 loan that they will pay back over a five year period. Frank has a credit score of 730 and Jasmere has a score of 600. Which of the following statements is TRUE?
a)
Over the five year period, Jasmere and Frank will pay the same amount for the car loan
b)
Frank's monthly payment on the auto loan will be about $100 more than Jasmere's payment
c)
Jasmere's monthly payment on the loan will be about $100 more than Frank's payment
d)
Lenders are not allowed to charge people different interest rates based on their credit scores
68.
Who tracks all of your credit information?
a)
Credit reporting agencies (Equifax, Experian and TransUnion)
b)
Federal government
c)
Consumer Financial Protection Board (CFPB)
d)
Lenders
69.
You find an error on your credit report: Your credit card account indicates that you are 60 days late on your payment but you have bank records indicating that you have always made on-time payments. What should you do FIRST?
a)
Contact the credit card company to have them fix it
b)
Wait a few weeks to see if it gets resolved
c)
Call the police to report the possible identity theft
70.
Which of the following things should you have ready when contacting a credit reporting agency to report an error on your credit report?
a)
Your preferred payment method to pay for fixing the error
b)
A list of all of your financial accounts and balances
c)
An explanation of the mistake and any evidence you have supporting your claim
71.
Which of the following could have a NEGATIVE impact on your credit score if done in a short period of time?
a)
Paying your bills on-time
b)
Paying down balances on your credit card accounts
c)
Applying for multiple credit cards
72.
Which best describes the Debt Snowball method for paying off debt?
a)
Once your debt "snowballs" out of control, hire a certified credit counselor to help get your finances back on track
b)
Make the monthly minimum payments on all your debts, and then put any extra cash toward the debt with the highest balance
c)
Make the monthly minimum payments on all your debts, and then put any extra cash toward the debt with the lowest balance
73.
What benefits do you receive by taking out a loan with a cosigner?
a)
You don’t get penalized for late payments
b)
You have a better chance of getting approved and getting a lower interest rate if the cosigner has good credit
c)
You automatically get the same credit score as the cosigner once the loan is paid off
74.
You're paying your credit card bill and your student loan payment each month, but you're falling behind on your auto loan payment. Which friend's advice could have a NEGATIVE impact on your credit score?
a)
Joanie says, "Call the auto lender and see if you can negotiate a lower monthly payment or some other deal."
b)
Debbie says, "Stop making the credit card payment for a few months until you're caught up on the auto loan."
c)
Angie says, "Pick up a second job for as long as it takes to accumulate enough money to make all your payments, even if it means losing time with friends and family."
d)
Betty says, "Cut down to a bare bones budget, where your necessities and your debt repayments take first priority. Cut everything non-essential."
75.
How can your credit score impact your financial well-being?
a)
Consumers with low scores get lower interest rates on loans than those with high scores
b)
Your credit score can determine whether you are approved for a loan and what the interest rate on that loan will be
c)
It generally has no impact on your financial situation
76.
Shira is trying to decide between getting a debit card, a prepaid debit card, and a credit card. Which statement is true?
a)
All 3 cards are completely different
b)
Debit cards and prepaid debit cards are the same
c)
Debit cards and credit cards are the same
d)
All 3 cards are completely the same
77.
The average APR for a payday loan is closest to …
a)
4%
b)
14%
c)
40%
d)
400%
78.
Which of the following statements comparing credit and debit cards is TRUE?
a)
Far more businesses accept credit cards than debit cards
b)
Credit cards pull money directly from your bank account, while debit cards get their money from Visa or Mastercard
c)
Credit card companies provide you with a monthly statement, while debit cards do not
d)
With debit cards, you're spending your own money at point of sale, but with credit cards, you're getting a loan that you need to pay back later
79.
Which of the following is true about fixed and adjustable-rate mortgages?
a)
Fixed-rate mortgages have a constant payment every month, but an interest rate that increases throughout the term of the loan
b)
Fixed-rate mortgages have a fixed interest rate for a few years, after which time the interest rate fluctuates according to general market conditions
c)
Adjustable-rate mortgages have a fixed interest rate for a few years, after which time the interest rate fluctuates according to general market conditions
d)
The two mortgages work the same way but are called different names depending if they come from a bank or a credit union
80.
Taylor is about to go car shopping, and she has $5000 saved that she can use for a down payment while still having extra cash in her emergency fund. She expects the exact model car she’s looking for to cost $35,000. If her top priority is having the lowest monthly payments possible, which advice should she follow?
a)
Put in $0 for your down payment, and choose a loan with a short term length
b)
Put in $2500 for your down payment, and choose a loan with a short term length
c)
Put in $3500 for your down payment, and choose a loan with a long term length
d)
Put in $5000 for your down payment, and choose a loan with a long term length
81.
What is an advantage of using a credit card?
a)
It will not affect your credit score or credit history
b)
Since it is tied directly to your checking account, it prevents you from spending money you do not have
c)
If you need to carry a balance, the interest rates are generally quite low (less than 5%)
d)
You can make an emergency purchase that you otherwise don’t have the money to pay for right now
82.
A loan with a shorter 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
83.
Which of the following statements is CORRECT about secured loans?
a)
They are a good choice to use for student loans
b)
If the borrower does not make payments, the lender can repossess the item
c)
In the event of default, the borrower loses nothing except for the down payment
d)
They usually have higher interest rates as compared with unsecured loans
84.
An excellent credit score will help with which aspect of car financing?
a)
Bargaining for a great sales price
b)
Option 2
c)
Qualifying for a low interest rate
d)
Having a wide selection of term lengths
85.
As a young adult, all of the following are good strategies for building credit, EXCEPT:
a)
Open a credit card, with your parent or guardian as a cosigner
b)
Take out a payday loan
c)
Become an authorized user on a credit card used by your parent or guardian
d)
Open and use a secured credit card
86.
Trudy tells her mom that she wants to buy a house within two years of graduating from college. Her mom says Trudy will need a down payment first. What is a dow payment?
a)
A large sum of money you pay when taking out a mortgage so that the principal of your loan is smaller
b)
A specific type of tax advantaged bank account used for saving money to buy a house
c)
The first year’s worth of property taxes, held in reserve
d)
A prepayment to a real estate agent so that they will start helping you house hunt
87.
Doug has a credit card with a $1000 credit limit. His Outstanding balance is currently $800. What is the maximum amount he can now spend on this credit card?
a)
$200
b)
$800
c)
$1000
d)
$1800
88.
Which represents the BEST time to start saving for your retirement?
a)
As soon as you have your first full-time job
b)
Right after you pay off your student loans
c)
Once you are debt-free, including paying off all credit cards, auto loans, and your mortgage
d)
At age 45, so you have exactly 20 years until retirement
89.
Which of the following statements is TRUE?
a)
The majority of Americans have an adequate emergency fund
b)
The majority of Americans have sufficient amounts of money saved for retirement
c)
The majority of Americans have an adequate emergency fund, but do NOT have sufficient amounts of money saved for retirement
d)
The majority of Americans do NOT have an adequate emergency fund or sufficient amounts of money saved for retirement
90.
Experts recommend that you accumulate enough to cover 3 to 6 __________________ of expenses in your emergency fund.
a)
Days
b)
Weeks
c)
Months
d)
Years
91.
You overhear your Aunt Tina tell your mom that she, her husband, and their kids are "living paycheck to paycheck." What does Aunt Tina mean by that?
a)
Aunt Tina gets a paycheck one month, and her husband gets a paycheck the next month; they alternate pay periods
b)
Aunt Tina and her family don't have any money saved, and their paychecks are just barely covering monthly expenses
c)
Aunt Tina and her family have high paying jobs and don’t worry much about money
d)
Aunt Tina only receives paper paychecks instead of direct deposit
92.
ou 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)
Your credit card company covers the cost
b)
It is deducted directly from your checking account
c)
Your credit card company provides you with a cash advance to cover the cost
d)
It is deducted directly from your savings account
93.
Jocelyn gets a text alert from the bank that her account balance has dropped below $100 after a series of $20 ATM withdrawals. She has not used her ATM in over a week and wonders what she should do. What would you recommend?
a)
Wait until her monthly statement arrives so she can check to see if those withdrawals are still there
b)
Wait a week as it is fairly common for the bank to catch mistakes like this
c)
Check her wallet to be sure her debit card has not been stolen. If she still has it, then she should not worry.
d)
Contact her bank immediately as it appears that her account may have been hacked
94.
Which of the following statements is an advantage of online banking?
a)
Once you set up online banking, your bank will waive overdraft, ATM, and monthly fees
b)
Using online banking allows you to earn a higher interest rate
c)
Using online banking, you can request transfers, pay bills and automate your savings without visiting the bank branch
d)
You can only shop online if your bank account has online banking features
95.
FDIC Insurance is...
a)
Option 1
b)
Option 2
c)
Protection for bank customers’ deposits up to $250,000, guaranteeing their money is still available if the bank goes out of business
96.
How often do customers typically receive a bank statement for their checking account?
a)
Daily
b)
Weekly
c)
Monthly
d)
Annually
97.
When signing up for a new checking account you answer "No" and opt out of overdraft protection. On this day, you have $10 in your account and go out and use your debit card to buy lunch for $12, a movie ticket for $12 and dinner for $15. What is likely to be the outcome resulting from these transactions?
a)
Your account will be closed
b)
You will likely be charged an overdraft fee for one or more of the transactions and also will need to repay the bank for the amount overdrawn
c)
Since you declined overdraft protection, the bank will not allow you to overdraw your account so your debit card will be denied
d)
The bank will provide you five days to add funds to your account to cover the overdraft and no fees will be assessed
98.
A person-to-person payment app could be used in each of the following scenarios EXCEPT...
a)
Tina pays her neighbor $200 for breaking his window with a softball
b)
Rafael writes a check to cover the entire month’s rent, and his roommates Valerie and Carlos pay Rafael for their share of the monthly rent
c)
Ahmed's soccer coach pays the team's registration fee for a big tournament, and each player then owes him $35 for their share of the registration fee
d)
Mia pays Cheesy Pizza Co. for a pizza she orders on their website
99.
Fill in the blanks: Direct deposit typically refers to your ______ sending your ______ electronically to your bank account.
a)
employer, bills
b)
employer, paycheck
c)
parents, allowance
d)
state government, taxes
100.
Unlike traditional economics, behavioral economics believes that
a)
People behave in a rational way when making economic decisions
b)
People do not always behave in a rational way when making economic decisions
c)
There is no way to predict how people will make economic decisions
d)
People will always update their viewpoints based on new information
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