WorksheetsPFL & Econ Test #2
Total questions: 30
Worksheet time: 15mins
What does FDIC stand for?
Federal Deposit Insurance Corporation
Financial Development and Investment Council
Federal Debt Insurance Committee
Financial Deposit Interest Company
Which of the following is a type of savings account?
Certificate of Deposit (CD)
Checking Account
Credit Card Account
Mortgage Account
What is the main purpose of an emergency fund?
To pay for vacations
To cover unexpected expenses
To invest in stocks
To buy luxury items
Which of the following is a deduction that commonly comes out of your paycheck?
Federal income tax
Grocery expenses
Utility bills
Car payments
A sole proprietorship is:
A business owned by one person
A business owned by two or more people
A government agency
A type of savings account
Which form must students complete to apply for federal student loans?
FAFSA
W-2
1040EZ
I-9
What does "liquidity" refer to in financial terms?
How quickly an asset can be converted to cash
The interest rate on a loan
The amount of risk in an investment
The total amount of taxes paid
Which of the following is NOT a type of business structure?
Partnership
Sole Proprietorship
Corporation
Mortgage
Gross income is best defined as:
Income after taxes and deductions
Total income before any deductions
Only income from investments
Only income from a second job
Which of the following is a feature of a credit union?
Member-owned
Owned by the government
For-profit institution
Only offers loans
Which of the following best describes the relationship between risk and return?
Higher risk usually means higher potential return
Lower risk always means higher return
Risk and return are not related
Return is always guaranteed regardless of risk
Why is it important to reconcile your bank account?
To ensure your records match the bank’s records
To increase your account balance
To avoid paying taxes
To get a loan
How does inflation affect your savings over time?
It increases the value of your savings
It decreases the purchasing power of your savings
It has no effect on savings
It guarantees higher interest rates
What is the main difference between a traditional bank and a credit union?
Banks are for-profit, credit unions are not-for-profit
Banks only offer loans, credit unions only offer savings accounts
Banks are owned by members, credit unions are owned by shareholders
Banks do not offer checking accounts
Which type of savings account typically offers the highest interest rate?
Traditional savings account
Certificate of Deposit (CD)
Checking account
Regular savings account
What information does the FAFSA collect to determine student loan eligibility?
Family income and assets
Favorite school subjects
Number of siblings
Sports participation
If your net income is much lower than your gross income, what is most likely the reason?
High deductions and taxes
Low interest rates
High investment returns
No deductions
Why is having an emergency fund considered a good financial practice?
It helps cover unexpected expenses without going into debt
It increases your tax refund
It guarantees higher investment returns
It is required by law
Which of the following is a reason to choose a money market account (MMA) over a traditional savings account?
Typically offers higher interest rates
No minimum balance required
Unlimited withdrawals
Lower risk of loss
What is the main advantage of FDIC insurance for bank customers?
Protects deposits up to a certain limit if the bank fails
Guarantees high interest rates
Eliminates all banking fees
Provides investment advice
A student is comparing two savings accounts: one with high liquidity and low interest, and one with low liquidity and high interest. What should the student consider when choosing between them?
How soon they may need to access the money
The color of the bank’s logo
The location of the nearest ATM
The number of employees at the bank
If you receive a bank statement showing a lower balance than your own records, what should you do first?
Compare your records with the bank statement to find discrepancies
Immediately withdraw all your money
Ignore the difference
Close your account
A student is deciding whether to take out a student loan. What is an important factor to consider before borrowing?
The interest rate and repayment terms
The color of the loan application
The number of friends who have loans
The school mascot
If you want to maximize your return while minimizing risk, which savings option is generally best?
Diversifying between different types of savings accounts
Putting all your money in a single stock
Keeping cash at home
Only using a checking account
You notice your net income is lower than expected after your first paycheck. What steps should you take to understand why?
Review your pay stub for deductions and taxes
Ask your friends for their paychecks
Ignore the difference
Spend more money
A partnership business structure is best for which situation?
Two or more people want to share ownership and responsibility
One person wants full control
A government agency is involved
No one wants to be responsible
If you want to avoid paying unnecessary bank fees, what should you do?
Read the fee schedule and maintain required balances
Ignore all bank communications
Only use cash
Close your account immediately
When completing the FAFSA, who receives the information to determine your eligibility for funding?
Federal and state governments, and colleges you apply to
Only your parents
Your high school principal
The IRS only
If inflation is higher than the interest rate on your savings account, what happens to the real value of your savings?
It decreases over time
It increases over time
It stays the same
It doubles
A student wants to save for both short-term emergencies and long-term goals. Which combination of accounts would best meet these needs?
Emergency fund in a high-liquidity savings account and long-term savings in a CD
All money in a checking account
All money in cash at home
Only invest in stocks
