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WorksheetsPersonal Finance JV Study Guides 2024-25
Total questions: 100
Worksheet time: 50mins
You earn percentage of money each time you sell a new skincare product. What is this extra income called?
Commission
Salary
Bonus
Allowance
Benefits like health insurance and retirement plans are typically offered to:
Full-time employees.
Temporary workers.
Freelancers.
Part-time contractors.
This guarantees that a product will perform as intended:
Warranty
Receipt
Invoice
Manual
A person’s payment activity over a period of time
Credit history
Credit score
Bank balance
Loan amount
This court-ordered payment is an agreement between ex-spouses during divorce proceedings in which one party financially supports the other.
Alimony
Child Support
Prenuptial Agreement
Property Settlement
You own real estate. You may pay this tax:
Property tax.
Income tax.
Sales tax.
Excise tax.
These investment vehicles are best described as certificates of debt:
Stocks
Mutual Funds
Bonds
Real Estate
Which government form determines a student’s eligibility for a work-study program?
FAFSA
W-2
1040EZ
I-9
The damage or injury caused by an accident:
Loss
Profit
Benefit
Gain
Factors of production include all but:
Government regulation.
Land.
Labor.
Capital.
Which is not related to credit cards?
Overdraft fee.
Annual fee.
Credit limit.
Interest rate.
If the money you invest is spread among different kinds of investments, your portfolio is said to be?
Diversified
Concentrated
Isolated
Unified
Which does not relate to retail banking?
Broker
Savings Account
Personal Loan
ATM Card
This document shows money earned and taxes taken out for a specific time period such as two weeks:
Pay Stub
Invoice
Receipt
Bank Statement
Is it a good idea for consumers to maintain an Emergency Fund for unexpected expenses? A good rule of thumb is that it should cover how many months of living expenses?
3 to 6 mo
1 to 2 mo
6 to 12 mo
12 to 18 mo
The Consumer Price Index helps measure:
Inflation
Unemployment
Interest rates
Population growth
Checking several alternatives to find the best product at the best price is:
Comparison shopping
Impulse buying
Brand loyalty
Window shopping
All are ways to pay for college except:
Mortgage
Scholarships
Student Loans
Grants
Net pay is calculated by:
Subtracting deductions from gross pay
Adding bonuses to gross pay
Multiplying gross pay by tax rate
Dividing gross pay by number of pay periods
One piece of information you should never give out when shopping on-line is:
Social Security Number
Email address
Shipping address
Favorite color
A child from birth to age 18 may receive monthly payments based on disability or blindness through this Social Security program:
Supplemental Security Income (SSI)
Social Security Disability Insurance (SSDI)
Medicaid
Temporary Assistance for Needy Families (TANF)
The largest stock market in the world is:
New York Stock Exchange
London Stock Exchange
Tokyo Stock Exchange
Shanghai Stock Exchange
What is secured debt?
Used car loan
Credit card debt
Personal loan without collateral
Student loan
Canned corn, footballs, and jeans are examples of: ________
Goods
Services
Ideas
Places
Establishing financial goals and developing a plan to accomplish them is best defined as: ________
Financial planning
Budgeting
Investing
Tax planning
Consumer confidence is a measure of how consumers: ________
Feel about the economy
Spend their money on luxury goods
Invest in the stock market
Save for retirement
You are most likely to pay a security deposit when you: ________
Rent an apartment
Buy groceries
Go to a movie
Visit a museum
Which does not relate to credit cards? ________
Overdraft fee
Credit limit
Interest rate
Minimum payment
Which government form determines a student’s eligibility for a work-study program?
FAFSA
W-2
1040EZ
I-9
Net pay is calculated by: ________
Subtracting deductions from gross pay
Adding bonuses to gross pay
Multiplying gross pay by tax rate
Dividing gross pay by number of pay periods
When you purchase this investment you are a part owner of the company: ________
Stocks
Bonds
Mutual Funds
Certificates of Deposit
This person offers services and time to a worthwhile cause for no pay: ________
Volunteer
Employee
Customer
Manager
This document shows money earned and taxes taken out for a specific time period such as two weeks: ________
Pay Stub
Invoice
Receipt
Bank Statement
The remaining unpaid balance on a loan is known as: ________
Principal
Interest
Collateral
Amortization
Use this to compare different assets: ________
Rate of return
Asset value
Market share
Liquidity ratio
This guarantees that a product will perform as expected: ________
Warranty
Receipt
Invoice
Manual
What is an insurance deductible?
What you pay when you make a claim against the policy
The total amount your insurance will pay for a claim
The monthly premium you pay for your insurance
The bonus you receive for not making any claims
This company is owned by shareholders:
Corporation
Sole Proprietorship
Partnership
Cooperative
When somebody uses your original work, they pay you:
Royalties
Taxes
Fees
Interest
When you dispute a charge on your credit card, this is known as:
Chargeback
Overdraft
Authorization
Reversal
If you are concerned about identity theft, you may request a credit freeze from:
Credit Bureaus
Local Police Department
Social Security Administration
Department of Motor Vehicles
A person’s payment activity over a period of time is known as:
Credit History
Credit Limit
Interest Rate
Loan Tenure
Which of the following is related to retail banking:
Broker
Stock Exchange
Central Bank
Insurance Company
All are way to pay for college except:
Mortgages
Scholarships
Student Loans
Grants
Do you want your credit score to be high or low?
High
Low
Average
Zero
Pay Stub deduction
Social Security
Rent
Groceries
Entertainment
What is an EFT in banking?
A digital transfer of money from one bank account to another without the use of paper documents
A type of fixed deposit account
A method of issuing cheques
A process for opening a new bank account
What happens if you contribute more than the annual limit to a traditional IRA?
You may face a penalty of 6 percent on the excess amount until it is corrected
Your contributions will be automatically refunded
You will receive a tax deduction for the excess amount
The excess amount will be rolled over to the next year
What is one key feature of a Roth IRA?
Qualified withdrawals in retirement are tax-free
Contributions are tax-deductible
Required minimum distributions at age 72
Withdrawals before age 59½ are always penalty-free
It is important to understand the risk associated with different financial products because:
it helps in making informed investment decisions.
it guarantees high returns.
it eliminates all financial risks.
it ensures instant profits.
How long does a Chapter 7 bankruptcy stay on your credit report?
Up to 10 years
Up to 5 years
Up to 7 years
Up to 3 years
Why might a borrower be required to pay for Private Mortgage Insurance (PMI)?
If the borrower makes a down payment of less than 20 percent of the home’s purchase price
If the borrower has a credit score above 800
If the borrower pays the full purchase price in cash
If the borrower makes a down payment of more than 50 percent of the home’s purchase price
What are 'catch-up contributions' in retirement plans?
Additional contributions allowed for individuals aged 50 and older
Mandatory contributions for all employees
Employer matching contributions for new hires
Early withdrawal penalties for retirement accounts
What does 'vesting' mean in the context of employer contributions to a retirement plan?
It refers to the employee gaining full ownership of the employer’s contributions after a specified period of service
It refers to the employer matching the employee’s contributions immediately
It means the employee can withdraw all funds at any time without penalty
It refers to the employer’s contributions being invested in company stock only
What is the key difference between a tax deduction and a tax credit?
A deduction reduces your taxable income, while a credit directly reduces the amount of tax you owe
A deduction increases your taxable income, while a credit reduces your taxable income
A deduction directly reduces the amount of tax you owe, while a credit reduces your taxable income
A deduction and a credit both increase the amount of tax you owe
What is the recommended minimum amount to keep in an emergency fund?
Three to six months of living expenses
One month of living expenses
One year of living expenses
One week of living expenses
What does the self-employment tax cover? (Fill in the blank)
Both the employer and employee portions of Social Security and Medicare taxes
Only the employee portion of Social Security and Medicare taxes
Only the employer portion of Social Security and Medicare taxes
Federal income tax
When buying a used car, what is the 'book value'?
The estimated market value of a vehicle based on factors such as age, mileage, and condition
The price set by the dealership for all used cars
The amount of money owed on the car loan
The cost of repairs needed for the vehicle
Which of the following is an example of an intangible benefit in a cost-benefit analysis?
The improvement in quality of life or satisfaction
Reduction in material costs
Increase in production output
Decrease in equipment downtime
What is the best definition of net worth in financial planning? (Fill in the blank)
The total value of your assets minus your liabilities
The total amount of money you earn in a year
The total value of your assets plus your income
The amount of cash you have in your bank account
Which of the following is an example of installment credit?
A mortgage
A credit card
A debit card
A prepaid card
When evaluating a financial decision, why is it important to consider both short-term and long-term costs?
Both short-term and long-term costs affect the overall value and sustainability of the decision
Only short-term costs are relevant for financial decisions
Long-term costs can be ignored if short-term gains are high
Short-term costs always outweigh long-term costs
At what age can you begin receiving reduced Social Security retirement benefits?
62
65
60
70
What is revolving credit?
A type of credit that allows you to borrow, repay, and borrow again up to a certain limit, such as with credit cards
A loan that must be repaid in fixed monthly installments
A type of credit used only for purchasing vehicles
A savings account with a fixed interest rate
Which of the following factors has the largest impact on your FICO score?
Payment history
Length of credit history
Types of credit used
Recent credit inquiries
Which of the following is a lesser-known benefit of tax planning? ________
It helps you time income and deductions to minimize taxes over multiple years
It guarantees a tax refund every year
It eliminates the need to file tax returns
It allows you to avoid paying any taxes legally
What is a key consideration when balancing short-term and long-term financial goals? ________
Allocating resources in a way that allows progress toward both types of goals simultaneously
Focusing only on immediate expenses and ignoring future needs
Prioritizing long-term goals at the expense of short-term stability
Avoiding any form of budgeting to maintain flexibility
Which of the following is a common misconception about opportunity cost? ________
Opportunity cost only applies to financial decisions with large sums of money
Opportunity cost is always easy to calculate
Opportunity cost only affects businesses, not individuals
Opportunity cost is the same as out-of-pocket expenses
What is considered a "late payment" in terms of credit reporting?
A payment that is more than 30 days past due
A payment that is 5 days past due
A payment that is 10 days past due
A payment that is 20 days past due
How often are credit scores and reports typically updated by credit bureaus?
Monthly
Annually
Daily
Quarterly
What does the acronym PITI stand for in the context of a mortgage?
Principal, Interest, Taxes, and Insurance
Payment, Interest, Term, and Insurance
Principal, Income, Taxes, and Investment
Payment, Income, Taxes, and Insurance
What is the purpose of the Alternative Minimum Tax (AMT)?
To ensure that high-income individuals pay at least a minimum level of tax, even with deductions
To eliminate all tax deductions for low-income earners
To provide tax credits for charitable donations
To reduce the overall tax rate for corporations
What is the difference between financing a car through the dealership versus a bank or credit union?
Banks and credit unions may offer more competitive interest rates, while dealership financing can include incentives but may have higher overall costs
Dealerships always offer lower interest rates than banks and credit unions
Banks and credit unions never provide any incentives for car financing
Financing through a dealership guarantees zero interest on all loans
What is one benefit of government-backed loans, such as FHA or VA loans? ________
They typically have more flexible credit and down payment requirements
They always have the lowest interest rates on the market
They do not require any documentation for approval
They are only available to first-time homebuyers
What is the strategy of dollar-cost averaging when investing?
Investing a fixed amount of money at regular intervals, regardless of the stock price
Investing only when the stock price drops significantly
Investing a lump sum amount at the beginning of the year
Investing based on market predictions and trends
Why is it important to get pre-approved for a mortgage before shopping for a home?
Pre-approval gives you a clear understanding of your budget and shows sellers you are a serious buyer
Pre-approval guarantees you will get the lowest interest rate available
Pre-approval allows you to skip the home inspection process
Pre-approval means you do not need to provide any financial documents later
What is the key difference between investing in stocks and investing in bonds?
Stocks represent ownership in a company, while bonds represent a loan to a company or government
Stocks pay fixed interest, while bonds pay dividends based on company profits
Stocks are always safer investments than bonds
Stocks are only issued by governments, while bonds are only issued by companies
How is long-term capital gains tax different from short-term capital gains tax?
Long-term capital gains are taxed at a lower rate if the asset is held for more than one year
Long-term capital gains are taxed at a higher rate than short-term capital gains
Long-term capital gains are not taxed at all
Long-term capital gains are only applicable to real estate transactions
What is a prudent approach to managing an increase in income?
Re-evaluating your financial goals and possibly increasing savings contributions
Spending all the extra income on luxury items
Ignoring the increase and maintaining current habits
Investing in high-risk ventures without research
What is the purpose of overdraft protection?
It automatically transfers funds from another account or applies a loan to cover transactions that exceed your balance
It prevents you from making any transactions if your balance is low
It charges you extra fees for every transaction you make
It increases your account balance without any deposit
When might funds from a deposited check not be available immediately?
If the check is deposited late on a Friday and requires several business days to clear
If the check is deposited early on a Monday and is from the same bank
If the check is deposited in cash and the teller confirms it
If the check is deposited electronically and the bank guarantees instant clearance
Which type of savings account typically offers the highest interest rates?
Money market accounts
Regular savings accounts
Certificate of deposit accounts
Basic checking accounts
How does tax-deferred growth benefit retirement savings in accounts like traditional IRAs or 401(k)s?
Earnings on investments grow tax-free until withdrawals are made in retirement, allowing more money to compound over time
Withdrawals are never taxed, providing completely tax-free income in retirement
Contributions are matched by the government, doubling retirement savings automatically
Investment losses are reimbursed by the IRS, eliminating risk in retirement accounts
What does the car title represent?
The legal document showing ownership of the vehicle
The registration number of the vehicle
The insurance policy of the vehicle
The maintenance record of the vehicle
What is the key feature of the "Debt Snowball" repayment strategy?
Focus on paying off the smallest debts first to build momentum, then move on to larger debts
Focus on paying off the largest debts first to minimize interest payments
Pay equal amounts to all debts regardless of size
Consolidate all debts into one loan before starting repayment
How does the length of your credit history affect your credit score?
A longer credit history typically has a positive impact on your credit score
A shorter credit history always results in a higher credit score
Credit history length does not affect your credit score at all
A longer credit history typically has a negative impact on your credit score
What does it mean when an employer offers a "match" in a 401(k) plan?
The employer contributes an additional amount to the employee’s 401(k), usually based on the employee’s own contributions
The employer guarantees a fixed return on the employee’s 401(k) investments
The employer pays all taxes on the employee’s 401(k) withdrawals
The employer allows the employee to withdraw funds early without penalty
How long do hard inquiries stay on your credit report?
2 years
1 year
5 years
6 months
What is the main feature of the "Debt Avalanche" repayment strategy?
You focus on paying off debts with the highest interest rates first to minimize the total interest paid over time
You pay off the smallest debts first to gain momentum
You make only minimum payments on all debts
You consolidate all debts into one loan
How is disposable income calculated?
Net income minus taxes and other mandatory deductions
Gross income minus voluntary deductions
Total income minus savings and investments
Gross income minus all expenses
How long can a collection account remain on your credit report?
7 years
3 years
10 years
1 year
What is the difference between a hard and a soft credit inquiry?
Hard inquiries affect your credit score, while soft inquiries do not
Hard inquiries are only done by banks, while soft inquiries are done by individuals
Hard inquiries are free, while soft inquiries have a fee
Hard inquiries are for loans, while soft inquiries are for credit cards
Which statement is true about wire transfers? (Fill in the blank)
Wire transfers are typically instant and irreversible
Wire transfers can be easily canceled after sending
Wire transfers usually take several weeks to process
Wire transfers are always free of charge
Who is considered a subprime borrower?
A borrower with a credit score typically below 620, indicating higher risk to lenders
A borrower with a credit score above 800, indicating very low risk to lenders
A borrower who always pays bills on time and has no debt
A borrower with a perfect credit history and high income
What is considered an ideal credit utilization ratio for maintaining a healthy FICO score?
Below 30 percent
Above 50 percent
Exactly 100 percent
Between 70 and 90 percent
When buying a home, the person who must give the final approval for the loan is:
The underwriter
The real estate agent
The appraiser
The loan processor
What is a key consideration when balancing short-term and long-term financial goals? (Fill in the blank)
Allocating resources in a way that allows progress toward both types of goals simultaneously
Focusing only on immediate expenses and ignoring future needs
Prioritizing long-term goals at the expense of short-term needs
Avoiding any form of financial planning
At what age can you begin receiving reduced Social Security retirement benefits?
62
65
60
70
What is the best definition of net worth in financial planning?
The total value of your assets minus your liabilities
The total amount of money you earn in a year
The total value of your assets plus your income
The amount of cash you have in your bank account
What is the key difference between a tax deduction and a tax credit?
A deduction reduces your taxable income, while a credit directly reduces the amount of tax you owe.
A deduction increases your taxable income, while a credit decreases your taxable income.
A deduction directly reduces the amount of tax you owe, while a credit reduces your taxable income.
A deduction and a credit both increase the amount of tax you owe.
