WorksheetsFinancial Fitness SLO – Pre Test 2025
Total questions: 45
Worksheet time: 23mins
Interpret which of the following statements best explains why income alone does not determine wealth?
Investing is the only factor that contributes to wealth building.
Income alone does not determine a person’s wealth.
Only people who are natural savers can become wealthy.
The amount of money a person makes does not dictate his or her spending and saving behavior
Describe the main reason of widespread financial insecurity of Americans.
The saving rate of Americans is low and many borrow in order to spend more than they earn.
Most Americans save a high proportion of their income.
Government programs are unavailable to help people when they are disabled or experience unemployment.
Unemployment rates are high and incomes of Americans are low.
Which of the following is the best reason to save money?
emergency fund
large purchases
lend money to friends
build wealth
This principle suggests that a certain amount of money today has different buying power than the same amount of money in the future, thereby changing the “value” of the money.
time value of money
inflation
opportunity Cost
interest Rate
Decide which of the following account records would have the most current balance.
your monthly bank statement
your own account register
account balance statement from ATM
checkbook
Distinguish what a credit score is intended to measure.
your financial success
your income level
the risk of not repaying debt
the amount of money you have in the bank
Which of the following things can be done with a credit card but can’t be done with a debit card?
reserve a hotel room
go into debt
purchase tickets
purchase something online
What happens when a company places an ad and offers no interest on your purchase for three years?
they are not interested in making a profit
they are showing their appreciation to you by giving you free money
the cost of financing is built into the price of the item
the ad is free
Which concept is best explained by the statement “Money spent here cannot be spent there”?
delayed gratification
significant purchase
law of diminishing return
opportunity cost
Describe liquidity.
the less liquid the investment, less return
the more liquid the investment, less return
the more liquid the investment, more return
the less liquid the investment, more return
A young investor willing to take moderate risk for above-average growth would be most interested in:
bonds
real estate
mutual funds
single stocks
When buying and selling investments, the first thing you should do is:
set your investment goals and consider a time frame
learn the different types of investments
understand basic investment strategies and identify ones that will help you reach your goals
switch your investment strategy often based on market conditions
What is the main purpose of insurance?
develop a savings plan
transfer financial risk
provide investment opportunity
make a lot of money
You are involved in a two car accident in which you are at fault. The other driver is injured. Which part of your insurance covers the medical expenses of the victim?
uninsured motorist protection
collision
liability
comprehensive
Identify the difference between gross pay and net pay.
gross pay and net pay are the same
net pay describes your pay after deductions, gross pay is before
gross pay is pay after deductions, net pay is before
net pay is always more money
This tax pays for benefits that workers and families receive for either Social Security or Medicare.
excise tax
Federal Insurance Contribution Act (FICA)
state income tax
sales tax
A life insurance policy provides a monetary payout in the event of death. Determine the best life insurance.
Term
Whole life
Universal
Level
The Internal Revenue Service (IRS) is the federal government agency responsible for:
filling out tax forms
writing tax laws
tax collection and tax law enforcement
keeping the unemployment rate low
The most important step in getting a job is:
resume
cover letter
introduction letter
interview
What percentage of households give to charity?
5%
20%
65%
100%
What is a rate that is charged on Debt or paid on investments for the use of money?
inflation
compound interest
interest rate
emergency fund
Which of the following is a consequence of overdrawing your checking account?
bank overdraft fee
check fee
stress
credit card fee
What is the main purpose of doing a written budget?
make your money go farther
make overspending more likely
track spending in all areas
remove guilt and shame associated with purchases
What is the most important reason to maintain a file of both paper and electronic financial records?
useful in filing taxes
disputing bank errors
fraudulent purchases
in case of fire, theft, flood or death
This is a preferred method of debt repayment including a list of smallest to largest balances.
debt snowball
loan term
credit report
depreciation
Explain why an adjustable rate mortgage is a bad idea.
interest changes based on market conditions
payments too low
increased risk of losing home due to high payments
both A and C
What money for college does not have to be paid back?
Loans
Scholarships/Grants
FAFSA
Mentorship
Which of the following is a common marketing strategy?
repetition
tease the consumer
buyer’s Remorse
inflation
Which piece of information, if stolen, is likely to lead to identity theft?
passcodes
phone number
social Security Number
It is a good idea to check your credit report:
every 6 months
every 3 years
every year
every 5 years
What could you list on your resume if you didn’t have a lot of work experience?
clubs, activities, sports
picture
parent names
sibling names
Which is the best investment benefit to home ownership?
lower tax bracket
grows tax free
inflation hedge
forced savings plan
36) Why worry about retirement when every worker pays into social security?
Because social security may not provide enough income for retirement.
Because social security guarantees full financial security for all retirees.
Because social security benefits are always increasing.
Because social security covers all retirement expenses.
Some ways to avoid student loan debt if you do not have a college fund include:
Applying for scholarships and grants
Taking out high-interest loans
Ignoring financial aid opportunities
Paying full tuition out of pocket
Teens are a major target of the credit card industry because:
they are likely to have high spending habits and less financial experience.
they have established credit histories.
they are less likely to use credit cards.
they are not interested in building credit.
It is better to buy a used car instead of a brand new vehicle because:
used cars are generally less expensive and depreciate less quickly
used cars always have better technology than new cars
used cars come with longer warranties than new cars
used cars are always in better condition than new cars
The rule of 72 is used to estimate how long it will take for an investment to double at a given annual interest rate.
Divide 72 by the annual interest rate to estimate the years to double.
Multiply 72 by the annual interest rate to estimate the years to double.
Add 72 to the annual interest rate to estimate the years to double.
Subtract the annual interest rate from 72 to estimate the years to double.
41) What steps do you take if you find an error on your credit report?
Contact the credit bureau to dispute the error.
Ignore the error and do nothing.
Close your credit accounts immediately.
Apply for a new credit card to fix the error.
Which of the following are ways in which advertising affects your buying decisions?
It creates awareness, influences preferences, and encourages impulse purchases.
It guarantees product quality, eliminates competition, and reduces prices.
It prevents you from buying new products, discourages brand loyalty, and limits choices.
It makes products invisible, stops promotions, and decreases interest.
What advice can you give her to help her meet her goals?
Encourage her to set specific, achievable goals and track her progress.
Tell her to ignore her goals and do whatever she wants.
Advise her to wait for others to help her reach her goals.
Suggest she gives up if she faces any challenges.
Advertising can affect consumer behavior by:
Influencing purchasing decisions through persuasive messages.
Reducing consumer awareness of products.
Making consumers less interested in products.
Preventing consumers from making choices.
What financial advice would you give Tara based on this situation?
Create a budget and track expenses regularly.
Ignore financial planning and spend freely.
Invest all savings in high-risk stocks without research.
Avoid saving money and rely on credit cards for purchases.
Which of the following is a benefit of maintaining a good credit score?
Difficulty renting an apartment
Limited access to credit
Lower interest rates on loans
Higher bank fees
What is the primary purpose of having an emergency fund?
To pay for luxury vacations
To invest in stocks
To buy gifts for friends
To cover unexpected expenses
Which of the following actions can help protect you from identity theft?
Using the same password for all accounts
Posting your Social Security Number on social media
Sharing your passwords online
Shredding sensitive documents
