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WorksheetsExam 3 (Chapter 6 and 7 Questions)
Total questions: 50
Worksheet time: 25mins
Which type of risk involves the chance that a company you have invested in may go bankrupt?
Inflation risk
Business risk
Interest rate risk
Liquidity risk
Which type of student loan does not accrue interest while the borrower is enrolled at least half-time in school?
Federal subsidized loan
Private loan
Federal unsubsidized loan
PLUS loan
Which of the following is a crime in which someone wrongfully obtains and uses your personal data in some way that involves fraud or deception for his or her economic gain?
Ponzi scheme
Pyramid scheme
Telemarketing fraud
Identity theft
Which risk involves the loss of purchasing power due to rising costs of goods and services?
Inflation risk
Business risk
Interest rate risk
Liquidity risk
Which of the following is a significant advantage of a Roth IRA over the Traditional IRA?
Contributions are tax-deductible.
Investments held in the account accumulate earnings on a tax-deferred basis.
Distributions from the account are tax-free if certain conditions are met.
All of these answer choices are correct.
Which of the following is the least recommended method for setting aside money for emergencies?
Opening a dedicated savings account for emergencies.
Relying solely on your credit card for unexpected expenses.
Setting up automatic transfers to a savings account.
Building a cash reserve in a secure bank account.
What type of loan is typically a small-dollar debt that can be used to pay bills or make purchases?
Installment loan
Commercial loan
Personal loan
All of these answer choices are correct.
What is an appropriate first step to take if you suspect someone is using your personal information without your permission?
Report the incident to your financial institutions.
File a report with your local law enforcement agency.
Contact your insurance provider to check for identity theft coverage.
All of the above actions are recommended.
A(n) [BLANK] deposit is a fee that may be required when you sign a rental lease.
pet
security
application
All of these answer choices are correct.
Which of the following is an example of unearned income?
Capital gains
Interest and dividends
Rents
All of these answer choices are correct.
Jasmine is planning to buy a car in 8 years and has saved $7,000 specifically for the down payment. She does not plan to use this money for anything else and wants to make a single deposit that will grow over the next 8 years. With her emergency fund already set, which of the following would be the most suitable option for Jasmine to help her savings grow for her goal?
certificate of deposit
money market account
installment checking account
checking account
With what type of loan does the borrower receive the full amount of the loan up front in a single lump sum?
Deposit advance
Line of credit
Installment loan
Cash advance
A borrower might benefit from what program if they decide to work for either a nonprofit hospital or a public health organization?
FAFSA Loan Forgiveness Program
CSS Loan Consolidation Program
PLUS Loan Service Program
Public Service Loan Forgiveness Program
A(n) [BLANK] is a legal document that outlines the terms of the rental agreement.
lease
application
contract
sublet
What is the legal procedure called when a lender reclaims a property due to the homeowner's failure to pay the mortgage, and then sells it to recover the loan amount?
Foreclosure
Eviction
Leaseback
Refinancing
A [BLANK] is a special type of loan that is secured by real property.
sublet
co-op
mortgage
lease
People are unbanked for what reason?
Belief that banks do not offer the flexible financial services that they are seeking and are less convenient than alternative financial service providers.
Banks are too expensive to deal with because of overdraft charges and other fees.
They have abused their account privileges in the past by overdrawing their accounts and not repaying the funds and associated fees.
All of these answer choices are correct.
Maria recently inherited $2,500 and wants to keep it safe while earning a higher interest rate than a standard savings account. She also wants to be able to withdraw funds at any time without facing a penalty. Which savings product would be the most suitable for Maria?
money market savings account
mutual fund
certificate of deposit
dedicated savings account
To protect yourself from financial fraud you should never:
buy something from an unfamiliar business or individual online.
pay a processing fee to receive a prize.
invest in something that you do not understand.
All of these answer choices are correct.
What are the two main factors that contribute to how much interest is paid on a mortgage loan?
repayment period and interest rate
interest rate and closing costs
repayment period and cost of insurance
repayment period and closing costs
HUD suggests that you spend no more than [BLANK] of your pretax income on rent.
20%
30%
40%
50%
When determining how much of a vehicle you can afford, what is a valid option?
Use a combination of cash for a down payment and borrow the remainder with a loan.
Borrow the entire purchase price of the car with a loan.
Withdraw money directly from savings and pay cash for the car.
All of these answer choices are correct.
Sofia has an opportunity to invest $18,000 she inherited from her great aunt. She wants to know how long it would take to double her money. The average investment return this past decade was 8% APY. Using the Rule of 72, calculate how long it would take the $18,000 to double at a rate of 8% in interest?
6 years
7 years
8 years
9 years
[BLANK] returns involve [BLANK] risk.
Lower; greater
Lower; the same
Higher; lesser
Higher; greater
When you sign a [BLANK] with a dealership, you are agreeing to use the car for a specific time and mileage in exchange for regular payments.
lease
payment
loan
purchase agreement
Which of the following is a benefit of buying versus renting a house?
flexible in the short term
long-term stability
don't need to worry about repairs
allows the option of moving
How can minors own titled assets?
in their own name
directly through a custodial account
indirectly through a custodial account
minors can't own titled assets
If your monthly income before taxes is $5,000, what is the maximum amount you should spend on rent according to HUD guidelines?
$1,000
$1,500
$1,800
$2,500
What type of loan has a variable APR?
installment loan
line of credit
deposit advance
payday loan
Which of the following is a savings option that typically requires you to deposit a fixed amount of money for a set period of time?
money market savings account
certificate of deposit
dedicated savings account
retirement account
Which insurance protects either the lender or the borrower in case someone says he or she has a claim on the property after you've purchased it?
liability insurance
homeowner's insurance
title insurance
personal injury insurance
Maria borrowed $500 for one month and was charged a $75 fee by the lender. What is the APR for this loan?
18%
120%
180%
225%
Which of the following refers to a Roth IRA?
pay taxes on money taken out of the account in the future
receive an income tax deduction
no income tax deduction
pay less tax today
Which of the following is (are) a requirement(s) for a qualified distribution from a Roth IRA?
both; you are at least 59 1/2 years old or disabled, and a Roth IRA account has been opened for at least 5 years
you must be at least 59 1/2 years old or disabled
a Roth IRA account has been open for at least 5 years
you must be at least 59 1/2 years of age, disabled, or a Roth IRA account has been open for at least 5 years, whichever comes first
Which of the following combines the benefits offered by savings and checking accounts?
certificates of deposit
retirement account
dedicated savings account
money market savings account
Repayment of student loans typically begins within what time period of completing school or dropping below half-time status as a student?
6 months
9 months
1 year
2 years
What type of risk results only in an economic loss?
liquidity risk
pure risk
interest rate risk
business risk
Which of the following refers to the maximum amount in 2024 that you can contribute annually to a Roth IRA?
$3,000
$7,000
$8,000
$10,000
Which of the following is an advantage of U.S. savings bonds?
easy to buy
easy to redeem
very safe
All of these answer choices are correct
With a federal student loan, you are borrowing money from what entity?
NCUA credit union
Federal government
FDIC bank
College of university
Which of the following is a scam that is typically based on selling products and/or recruiting new members into an organization?
Ponzi scheme
Pyramid scheme
Telemarketing fraud
Identity theft
Which of the following refers to a traditional individual retirement account (IRA)?
receive an income tax deducgtion
pay taxes on money taken out in the future
pay less tax today
All of these answer choices are correct.
Which of the following multifamily housing must be purchased through shares in a corporation that owns the building?
condominium
co-op
planned unit development
duplex
[BLANK] refers to allowing someone else, not originally on the lease, to live in the home and pay rent.
depositing
leasing
subletting
evicting
With a Roth IRA, when can you withdraw your principal without having to pay taxes on the withdrawal?
any time
after 59 1/2 years of age
after 62 years of age
after 50 years of age
The difference between what a house could sell for and the amount still owed on the mortgage is referred to as what?
housing asset
housing liability
housing equity
housing debt
What happens to the value of most investments when interest rates increase?
increase by 50%
decrease
no change
increase
The [BLANK] the APR, the [BLANK] the true cost of the credit.
lower; higher
lower; lower
higher; lower
None of these answer choices are correct.
Which of the following occurs when someone attempts to deceive you with a promise of goods, services, money, or other benefits that do not really exist, were never intended to be provided or were misrepresented?
misdemeanor
threat
fraud
default
What loan type is backed by collateral
secured
cash advance
signature
unsecured
