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WorksheetsConsumer Education Quiz
Total questions: 102
Worksheet time: 1hrs 8mins
What is the difference between Gross Pay and Net Pay?
Gross Pay is before deductions; Net Pay is after deductions.
Gross Pay is after deductions; Net Pay is before deductions.
Gross Pay includes bonuses; Net Pay does not.
Gross Pay is the same as Net Pay.
What does the W-4 Form determine?
The amount of income tax to withhold from your paycheck.
The amount of annual wages.
The amount of Social Security tax.
The total amount of taxes paid in a year.
What is a premium in terms of insurance?
The amount you pay out-of-pocket before insurance covers the rest.
The monthly cost to have the insurance policy.
The total amount covered by the insurance.
The amount paid by the insurer for a claim.
What is a subsidized loan?
A loan where interest is paid by the government while you're in school.
A loan where interest accrues immediately.
A loan that does not require repayment.
A loan with a fixed interest rate.
What is the purpose of a checking account?
To earn high interest on deposits.
To secure loans with collateral.
To provide high liquidity for daily transactions.
To accumulate funds over time.
What is FDIC insurance?
Insurance for vehicle damages.
Insurance for personal property.
Insurance for bank deposits up to $250,000 per depositor.
Insurance for health-related expenses.
What is a secured loan?
A loan backed by collateral.
A loan that does not require collateral.
A loan that is forgiven after a certain period.
A loan with a variable interest rate.
What is the main advantage of diversification in investing?
It guarantees high returns.
It reduces risk by spreading investments.
It eliminates all investment risks.
It focuses on a single asset class.
What is a mutual fund?
A type of savings account with a fixed interest rate.
A high-risk, high-return investment option.
An investment vehicle that pools money to purchase a diversified portfolio.
A government bond with a fixed return.
What is the purpose of a 401(k) plan?
To provide immediate cash for emergencies.
To pay for medical expenses.
To offer tax-advantaged long-term savings for retirement.
To insure against unemployment.
What is phishing?
A technique to steal personal data using fake emails or texts.
A method of investing in stocks.
A type of insurance fraud.
A way to secure loans with collateral.
What is the main factor affecting credit scores?
Your payment history.
The number of credit cards you own.
Your annual income.
The amount of savings in your bank account.
What is a cash advance?
A government grant.
A loan with no interest.
A transaction where you withdraw cash against your credit line.
A type of savings account.
What is the purpose of reconciling a bank statement?
To apply for a loan.
To compare your bank statement to your check register for errors.
To determine your credit score.
To calculate your annual income.
What is a deductible in insurance terms?
The amount paid by the insurer for a claim.
The total amount covered by the insurance.
The out-of-pocket amount you pay before the insurer covers the rest.
The monthly cost of the insurance policy.
What is a Certificate of Deposit (CD)?
A type of insurance policy.
A fixed interest rate investment for a fixed period.
A government bond.
A savings account with a variable interest rate.
What is the main purpose of a budget?
To increase your credit score.
To plan for saving and spending money.
To determine your tax liability.
To apply for a loan.
What is a Roth IRA?
A retirement account with after-tax contributions and tax-free withdrawals.
A government bond.
A savings account with a fixed interest rate.
A retirement account with tax-deductible contributions.
What is identity theft?
The legal use of another person's identifying information.
The fraudulent use of another person's identifying information for financial gain.
A type of insurance fraud.
A method of investing in stocks.
What is the purpose of the W-2 Form?
To determine the amount of income tax to withhold.
To report annual wages and withheld taxes for tax returns.
To apply for a loan.
To calculate your credit score.
What is a direct deposit?
A government grant.
A type of savings account.
The electronic transfer of an employee's pay directly into a bank account.
A manual transfer of funds.
What is a credit limit?
The amount of your monthly payment.
The maximum amount you can charge.
The minimum amount you can charge.
The total amount of interest on a loan.
What is a secured credit?
Credit with a fixed interest rate.
Credit with no interest.
Credit that requires no collateral.
Credit that requires collateral.
What is a capital gain?
The dividend paid by a company.
The interest earned on a savings account.
Profit made when you sell a stock for more than you paid for it.
A loss incurred when selling a stock.
What is the main purpose of liability insurance?
To pay for damages to another party when you are at fault.
To cover medical expenses.
To insure against unemployment.
To cover damages to your own vehicle.
What is an adjustable rate mortgage (ARM)?
A government grant for housing.
A mortgage with no interest.
A mortgage where the interest rate can fluctuate based on market conditions.
A mortgage with a fixed interest rate.
What is the main advantage of a 401(k) plan?
High liquidity.
Immediate access to funds.
Employer matching contributions.
No tax benefits.
What is a dividend?
A type of insurance policy.
The principal amount of a loan.
The interest earned on a savings account.
A portion of a company's profits paid to shareholders.
What is the main purpose of the FAFSA?
To apply for a mortgage.
To apply for federal student aid.
To determine your credit score.
To calculate your tax liability.
What is a money market account (MMA)?
A type of insurance policy.
A type of checking account.
A savings account with a higher interest rate and higher minimum balance.
A government bond.
What is the main purpose of consumer protection agencies?
To offer insurance policies.
To investigate fraud and enforce consumer protection laws.
To provide loans to consumers.
To calculate taxes for consumers.
The relationship between risk and return can be stated as
Higher risk indicates higher return
Higher risk indicates lower return
Lower risk indicates higher return
No relationship exists between risk and return
Which of the following expenses should be included in a typical budget?
taxes
charitable giving - charities
savings
All of the expenses should be included in a typical budget
Which of the following is NOT true of a budget? [note capitalization of “NOT”]
Budgets help you plan how to spend money you earn or receive
Once a budget is set, it should not be revisited
A budget can include charitable giving
Budgets include both income and expenses
The goal of a budget is to SAVE more than you SPEND.
True
False
What is the primary benefit of using a budgeting app to manage your finances?
To get recommendations on stocks to invest in
To track your spending and help you stick to your budget
To automatically increase your credit score
To transfer money internationally without fees
What is a budget?
A type of savings account
A way to invest for retirement
A fund for emergencies
A financial plan that defines expenses for a period of time.
According to this image, how much money would you have to invest each month to be a millionaire when you retire if you began at age 30?
$700
$3421
$360
$990
A document that comes with your paycheck, showing how much you were paid and how much was withheld for taxes.
budget
transfer
pay stub
net pay
What form do you get every year from your employers that help you file your income tax return?
W4
W2
1040
What date is Tax Day?
January 31st
April 15th
April 1st
December 25th
Which of the following are included in FICA
Federal Income Tax
State Income State
Social Security Tax
Medicare Tax
Why should you complete a W-4 form any time you start a new job or change your tax status?
You need a copy of your W-4 to file your tax return annually
Your W-4 determines how much Federal income tax money your employer should withhold
Your W-4 determines your total tax bill at the end of the year
Completing a W-4 will guarantee you receive a large tax refund
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?
His gross pay is $2,500 and net pay is $3,000
His gross and net pay are $3,000
His gross and net pay are $2,500
His gross pay is $3,000 and net pay is $2,500
Which of these is a major category for insurance?
Life
Auto
House
Health
All the above
Which of the below is an employer based retirement plan that both employees and employers contribute to?
Traditional IRA
Roth IRA
401K
Pension
What are the tax benefits of a Roth IRA?
Qualified withdrawals are tax-free, meaning you do not pay taxes on earnings or contributions when you withdraw them in retirement.
Contributions are tax-deductible in the year they are made.
All earnings are taxed at a lower rate than traditional IRAs.
You can withdraw contributions at any time without penalty, but earnings are taxed.
What account is a good idea if you are in a lower tax bracket than you will be at retirement?
Traditional IRA
Roth IRA
What is the purpose of Social Security?
to protect the safety of our nation's harbors
to provide a trained military
to help Americans pay the bills when they can no longer work
to provide low cost healthcare
What does it mean for an employer to 'match' contributions in a 401(k)?
Employer matching means that an employer contributes additional funds to an employee's 401(k) account, typically matching a percentage of the employee's contributions up to a certain limit.
Employer matching refers to the employee contributing more than the employer to their 401(k) plan.
Employer matching is when the employer takes a percentage of the employee's salary for their own benefit.
Employer matching means that the employer will not contribute anything unless the employee reaches a certain salary threshold.
Your friend Jenny says a Roth IRA has the best tax advantages,
because you pay taxes now and won’t have to pay them when
you take the money out in retirement.
Why might she be right?
IF you’re just starting career, and IF your salary is low, you may be in lower tax bracket now than at retirement
In a Roth IRA, you pay taxes later, not now
Choose the type of retirement account for which the statement is true:
Investment Options: You’re promised a fixed benefit each month based on criteria such
as years of service and age
Pension
401(k)
Traditional IRA
Roth IRA
None
Choose the type of retirement account for which the statement is true:
Contributions: Any contributions you make come directly from your paycheck
Pension
401(k)
Traditional IRA
Roth IRA
None
Choose the type of retirement account for which the statement is true:
Taxes: You pay taxes when you eventually take the money out
Pension
401(k)
Traditional IRA
Roth IRA
None
Choose the type of retirement account for which the statement is true:
Contributions: Your company may contribute funds toward your retirement
Pension
401(k)
Traditional IRA
Roth IRA
None
Choose the type of retirement account for which the statement is true:
Contributions: Any contributions you make come directly from your paycheck
Pension
401(k)
Traditional IRA
Roth IRA
None
Nike, Disney, and Microsoft are all examples of what type of stock?
Penny Stock
Value Stock
Blue Chip Stock
Aggressive Stocks
Which index is the broadest indicator of the entire market?
Dow Jones
S&P 500
Russell 2000
FTSE 100
Why is it important to start investing as soon as possible?
You take less risk when you are young, so money will be safe
You have more time for your money to compound
Investing is an easy way to make quick money
Fees on investments are cheaper when you are younger
Interest upon interest is called
A good deal
Compound Interest
Principle
A double standard
Which of the below is an employer based retirement plan that both employees and employers contribute to?
Traditional IRA
Roth IRA
401K
Pension
A sum of money paid to shareholders of a corporation out of its earnings.
index
dividend
profit
invest
A company that sells stock on the stock market.
private company
market capitalization
public company
stock market
A bond is generally considered less risky than a stock.
True
False
When a company earns a profit, sometimes those profits are distributed to the company’s shareholders. This means those shareholders are paid a _________________.
dividend
asset
stock
bankrupt
When you own part of a company, this means you own ________ in that company.
dividend
asset
stock
bankrupt
Usually, when there is high demand (want) for ownership of a particular company or a product made by that company, what happens to the price of that company’s stock?
goes up
goes down
stays the same
Investing in the Stock Market isn't risky.
True
False
If I buy a stock at $17 a share, then sell two years later at $86 a share. How much would I profit?
$70
$69
$86
$17
How can you make money in the stock market?
Buy low and sell high
Earn dividends
Both of these
What happened to this stock between the high and low shown in this chart?
It lost more than 2/3 of its value
It lost around a half of its value
It doubled its value
It stayed about the same
If you bought this stock in the beginning of 2023 and sold it in early April of 2023 (the last date shown on the chart), would you have made money?
Yes, I would have tripled my money.
No, I would have lost money.
Yes, I would have not quite doubled my money.
I would have pretty much broken even.
If you bought 5 shares of this stock at the current price (last price shown of the chart), how much would you pay?
Around $148,000
Around $336,000
Around $50,000
Around $5000
A bond is generally considered less risky than a stock.
True
False
If you buy bonds from a company, you are paid interest until the end of the term and then you get your money back.
True
False
If you buy a bond with a 10 year term and you want to sell it after only 2 years....
You may sell it at a loss or a profit depending on the federal interest rate.
You will lose money no matter what.
You can always see it for the price you paid for it.
