WorksheetsDay Three: Finance and Credit Quiz
Total questions: 20
Worksheet time: 10mins
What is the definition of savings?
Money left after subtracting consumer spending from disposable income
Money earned from investments
Money spent on monthly expenses
Money borrowed from a bank
How long will it take a person with $1500 net pay and $1300 monthly expenses to save $600?
4 months
2 months
5 months
3 months
What is a 529 college savings plan?
A scholarship program for higher education
A state-sponsored investment plan for education expenses
A federal tax plan for education
A loan program for college students
Which of the following is a benefit of a 529 college savings plan?
Funds cannot be invested
Earnings are not taxed if used for education
Funds can only be used in the state where the plan was opened
Earnings are taxed regardless of usage
What is the first action to take if your checkbook register balance does not match your bank statement?
Ignore the discrepancy
Withdraw all funds
Determine if all checks written have cleared the bank
Close your account
Why might a person keep a copy of a check written in the past?
To apply for a loan
To reconcile their account
To prove a bill was paid
To calculate interest
What is the best advice for someone writing a check for the first time?
Use a checkbook register to record the check
Leave the amount field blank
Sign the check after the recipient receives it
Write the check in pencil
What is the main purpose of the Federal Reserve System (Fed)?
To promote stability of the financial system
To manage personal bank accounts
To provide loans to individuals
To regulate credit scores
What is the definition of credit?
Using someone else’s money and promising to repay it with interest or fees
Borrowing money without repayment
Saving money for future expenses
Investing in stocks and bonds
What is the difference between closed-end and open-end credit?
Closed-end credit has an end date, while open-end credit is revolving
Closed-end credit is only for businesses, while open-end credit is for individuals
Open-end credit has an end date, while closed-end credit is revolving
Open-end credit is only for businesses, while closed-end credit is for individuals
What does APR stand for?
Annual Premium Rate
Annual Profit Ratio
Annual Percentage Rate
Annual Payment Rate
What is the formula for calculating debt-to-income ratio?
Monthly income divided by monthly debt payments
Monthly savings divided by monthly expenses
Monthly debt payments divided by gross monthly income
Total assets divided by liabilities
What is the best way to improve your credit score?
Take out multiple loans
Avoid checking your credit report
Pay bills on time
Increase your debt
What is identity theft?
Using another person’s information to open an account
Stealing money from a bank
Borrowing money without permission
Failing to pay a loan
What is phishing?
A way to improve credit scores
A scam that uses emails or pop-ups to deceive consumers into disclosing personal information
A method of saving money
A type of loan
What should you do if you find incorrect information on your credit report?
Ignore the error
Close your account
Apply for a new credit report
Write to the credit reporting agency to explain the mistake
What is the main purpose of requiring a cosigner on a loan?
To avoid paying fees
To reduce the interest rate
To increase the loan amount
To secure the loan if the lead borrower defaults
What happens if a borrower fails to repay a cosigned loan?
The cosigner is responsible for the unpaid balance and any fees or penalties
The borrower is not held accountable
The loan is forgiven
The cosigner is not affected
What is the role of credit reporting agencies?
To calculate interest rates
To keep files and records of people who apply for and use credit
To provide loans to individuals
To manage bank accounts
What is the best way to protect yourself from identity theft?
Guard your personal information
Ignore your credit report
Use public Wi-Fi for online banking
Avoid using credit cards
