WorksheetsFinancial Literacy Final Exam Study Guide
Total questions: 56
Worksheet time: 28mins
Medicaid is a government-sponsored health insurance program for senior citizens.
False
True
Saving up for retirement is an example of:
A short term goal
A budget
A long term goal
A personal financial plan
A series of equal annual deposits into a bank account is called a(n) ______________________.
Annuity
Equality
Insolvency
Direct Deposit
If you make a mistake while writing a check, what should you do?
Void the check
Issue a stop-payment order
Report it to your bank
Use white-out
A meeting of the seller, the buyer, and the lender (or representatives from each party) to complete the transaction.
equity
deed
closing
mortgage
How many times a year can you obtain a free credit report?
Once, from the credit bureau of your choice
Three, once from each credit bureau
Unlimited, from the credit bureau of your choice
Zero, unless you have been denied a loan
Which of the following is NOT a disadvantage of credit?
The temptation to buy more than you can afford
The potential damage to your credit score
The option to buy now, pay later
The cost to borrow
____________refers to looking at prices and characteristics of products with similar features from different brands and sellers.
Impulse buying
Price negotiation
Comparison shopping
Open dating
Which of the following is a smart buying strategy?
Purchasing products past their expiration date
Timing the purchase based on seasonal offers
Buying the cheapest product all of the time
Making only the minimum monthly payment
If you think your credit card was stolen, you:
Can dispute the charge
Should take immediate legal action
Must pay the full amount
Should close your account immediately
Using the rule of 72, how long would it take for your $3,000 investment to double at a 4% interest rate?
46 years
1.6 years
5.5 years
18 years
The longer it takes you to pay back a loan:
The shorter the term
The higher the interest rate
The lower the interest rate
The more interest you'll pay
The ___________________ is the person who borrows money, while the _______________________ is the lender of the money.
Lender, Borrower
Debtor, Creditor
Tenant, Landlord
Creditor, Debtor
Checks, cash, and debit cards are all examples of:
Payment services
Borrowing
Savings
Investments
Which step in the home buying process includes "house hunting"?
Find and evaluate a property
Obtain financing
Price the property
Determine your homeownership needs
The difference between the budgeted amount and the actual amount that you spend is known as _______________________:
Budget surplus
Budget variance
Budget deficit
Budget adjustment
___________ is an example of a variable expense:
Rent payment
Car loan payment
Emergency savings
Electricity bill
Depositing money into a checking account is an example of a _______________ deposit, while depositing money into a savings account is an example of a ________________ deposit.
Time, direct
Direct, demand
Time, demand
Demand, time
With credit cards, the lender often encourages you to make ___________________ because it means they will earn more interest in the long run.
A larger down payment
Frequent payments within the grace period
Only the minimum monthly payment
A declining balance
A time period during which no finance charges will be added to your account (such as in a credit card).
impulse buying
debtor
open dating
grace period
The money that goes in and out of your wallet.
cash flow
deficit
insolvency
surplus
take-home pay
Amount of income left after taxes and other deductions are taken out of your gross pay.
cash flow
deficit
insolvency
surplus
take-home pay
The difference between the amount that you own and the debts that you owe is:
budget variance
net worth
supply
service
intangible
The difference between the budgeted amount and the actual amount that you spend is known as _______________________.
budget variance
net worth
supply
service
intangible
Portion of the total cost of an item that must be paid at the time of purchase
down payment
impulse buying
open dating
rebate
Consumer credit
Purchasing items on the spur of the moment.
down payment
impulse buying
open dating
rebate
Consumer credit
Things needed for survival, such as food, water, clothing, shelter, and medical care
needs
net worth
opportunity cost
personal goals
short-term goals
Costs that can go up and down each month
timeline
trade-off
variable expenses
variances
wants
Things people desire for reasons beyond survival and basic comfort
net worth
personal goals
trade-off
variable expenses
wants
Which action could help improve your credit history?
Leave credit card bills outstanding.
Always pay your credit card bill on time.
Only get a debit card and avoid credit cards.
Make a major purchase that you can't afford right now.
What is the correct definition for the grace period?
The amount you pay for your card each year
The amount of time you have to make late payments
The time between when you make a purchase using the credit card and the date when the credit card company begins charging you interest
The amount of time you have to pay your secured deposit
What is a reason to pay more than the minimum payment due on your credit statement each month?
You save money on interest.
It takes more time to pay off a balance.
It hurts your credit worthiness.
Your credit utilization rate stays the same.
What is the best definition of a credit report?
A number that shows a snapshot of your credit at a specific moment in time
A number that shows how much of your overall credit you're using
A period of time between when you spend money and when the company charges you interest
A history of how you pay back loans and credit cards
What is a good strategy if you want to improve your credit score?
Increase your account balance
Pay your credit card bills late once in a while
Overdrawing your bank balance
Minimize new applications for credit
What is a good strategy if you want to improve your credit score?
Increase your account balance
Pay your credit card bills late once in a while
Overdrawing your bank balance
Minimize new applications for credit
Compare checking and savings accounts. What is the difference between these two account types?
Savings accounts have higher fees but better customer service
Checking accounts offer easier access but savings accounts typically earn interest
Savings accounts require more paperwork but have lower minimum balances
Checking accounts are FDIC insured while savings accounts are not
What is the key advantage of compound interest over simple interest for long-term savers?
Compound interest has lower fees
Compound interest can be withdrawn without penalties
Compound interest allows you to earn interest on previously earned interest
Compound interest is guaranteed by the government
Why might someone choose a Certificate of Deposit (CD) despite its restrictions on accessing funds?
CDs allow unlimited withdrawals
CDs are not subject to federal taxes
CDs offer higher interest rates than regular savings accounts
CDs have no minimum deposit requirements
What habit lowers your credit score?
Pay your bills late
Decrease your credit card balance
Schedule automatic bill payment
Check your credit report
What is the best definition of a credit score?
A period of time between when you spend money and when the company charges you interest
A number that shows a snapshot of your credit at a specific moment in time
A number that shows how much of your overall credit you're using
A history of how you pay back loans and credit cards
What are the two numbers listed at the bottom of a check?
Check number & Pin number
Account Number & Pin number
Routing Number & Account number
Amount number & Routing number
With what type of account can you earn interest while still being able to write checks from it?
Escrow
Line of Credit
Mutual Fund
Money Market
What is the best way to avoid credit card debt?
Paying in full and on-time.
Paying off your balance plus late fees.
Paying your bill every month.
Paying only the minimum payment.
An Annual Percentage Rate (APR) on a credit card determines:
The amount of interest you are charged on credit card purchases.
The amount of time you have after making a credit card purchase before interest is applied.
The rate at which you make purchases or use your credit card.
The amount of debt you have.
What is a mortgage?
A type of long-term loan used to buy property.
Extra charges that are paid to the lender for a lower interest rate.
A policy that protects the lender in case the buyer cannot make payments.
A type of rent used to pay housing.
Some questions to consider when buying a home: How long has the house been on the market? What have similar homes in the neighborhood sold for? Do the current owners need to sell in a hurry? This takes place during what step in the home-buying process?
Find and Evaluate a Property to Purchase
Obtain Financing
Price the Property
Determine your Homeownership Needs
Compound interest is:
The fee paid on borrowed money.
Interest earned on the principal and any previously earned interest.
The principal plus fees.
The cost of using money.
A spending and saving plan based on expected income and expenses
budget
assets
cash inflows
cash outflows
financial goals
Income from your job, investments, and other sources
cash inflows
assets
budget
cash outflows
financial goals
Which of the following are considered basic needs. (Check all that apply)
Food
Water
Medical care
Shelter
Clothing
