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WorksheetsAAA Finance and Credit Knowledge Quiz
Total questions: 75
Worksheet time: 1hrs 26mins
What is the principal amount of a student loan?
The original amount of money borrowed.
The total amount paid back including interest.
The interest rate on the loan.
The monthly payment amount.
What is the 'Dow Jones Industrial Average (DJIA)'?
A stock market index that tracks 30 large, publicly-owned companies in the United States
A measure of unemployment in the United States
A government agency regulating the stock market
An index tracking all stocks traded in the US
What does 'bear market' mean?
A market in which prices are falling or expected to fall
A market in which prices are rising or expected to rise
A stable market with little price fluctuation
A market focused on technology stocks
What does 'P/E ratio' stand for?
Price-to-Earnings ratio
Profit-to-Expense ratio
Price-to-Equity ratio
Portfolio-to-Earnings ratio
What is a 'dividend'?
A distribution of a company's earnings to its shareholders
The price of a stock
A fee charged for trading stocks
A type of government regulation
What does 'bull market' mean?
A market in which prices are rising or expected to rise
A market in which prices are falling or expected to fall
A stable market with little price fluctuation
A market focused on agricultural products
What is 'diversification' in investing?
Spreading investments across different assets to reduce risk
Investing all money in one stock
Borrowing money to invest
Selling stocks quickly to avoid losses
What is a 'stock'?
A share of ownership in a company
A type of bond
A government-issued currency
A loan from a bank
What is 'insider trading'?
Trading stocks based on non-public, confidential information
Trading stocks through a licensed broker
Trading stocks based on public news
Buying stocks in a company you work for
What does 'market capitalization' refer to?
The total value of a company's outstanding shares
A company's annual revenue
A company's debt
The value of a company's assets
What is a 'brokerage account'?
An account used to buy and sell stocks and other investments
A savings account
A checking account
A loan account
How does the age of your credit accounts affect your credit score?
A longer credit history generally improves your score.
A shorter credit history generally improves your score.
The age of your credit accounts has no impact on your credit score.
New credit accounts are needed to improve your credit score.
What is the typical range for FICO credit scores?
300-850
0-1000
500-900
200-700
What percentage of your credit score is determined by your payment history?
35%
10%
15%
30%
Which of the following factors has the BIGGEST impact on your credit score?
Payment History
Age of Credit History
Types of Credit Used
Total Accounts
What does 'credit utilization' refer to?
The amount of credit you're using compared to your total available credit.
The length of time you've had credit accounts open.
The number of credit accounts you have open.
The different types of credit accounts you have.
Besides credit cards, which of the following installment loans would affect your credit score?
Auto loan
Loans from friends or family
Debit cards
Gift cards
What is a good credit utilization ratio to maintain?
Below 30%
Above 70%
Between 50% and 70%
Exactly 50%
How often is credit information typically reported to credit bureaus?
Monthly
Weekly
Quarterly
Annually
Which of these actions could hurt your credit score the MOST?
Making late payments.
Checking your own credit report.
Opening too many credit accounts at once.
Having a low credit utilization ratio.
What is meant by 'credit mix'?
The variety of credit accounts you have (e.g., credit cards, loans).
The amount of debt you owe on each credit account.
The interest rates on your credit accounts.
The total amount of credit available to you.
When Kaleel applies for a personal loan, the loan officer will assess his credit worthiness by checking:
Credit Report and Credit History
GPA and Transcripts
Parents Income and Net Worth
All answers are correct
When Katy applies for a car loan, the bank uses a:
A method of tracking Katy's spending habits
A measure of Katy's grades and GPA
a number that gives Katy rewards if stayed under
report of Katy's credit history
During a finance class, Andrew, Andrew, and Andrew are tasked with researching the 3 major Credit Reporting Agencies in the U.S. for a project. Which agencies are they looking into?
Equifax, Expedia and Trans America
Equilibrium, Experience, and Trans Continental
Equifax, Experian, and Trans Union
Equality, Expatriot, and Transformation
Jaycee missed a credit card payment. How long will this late payment stay on Jaycee's Credit Report?
10 years
3 years
7 years
Forever
Which of the following actions can help improve your credit score over time?
Applying for multiple new credit cards at once
Closing your oldest credit account
Maxing out your credit cards
Making all payments on time
What is the main purpose of a credit report?
To provide a detailed record of your borrowing and repayment history
To show your annual income
To list your monthly expenses
To display your investment portfolio
Which of the following is NOT a factor used to calculate your credit score?
Number of dependents
Payment history
Credit utilization
Length of credit history
Loans for buying cars are called ....
commercial loans
personal loans
auto loans
loan application
Any student can qualify for a subsidized loan
True
False
If you get a federal student loan, your payments are expected to start ....
6 months after you are no longer attending school
right away
2 years after you are no longer attending school
3 years from when you took out the loan
Which of the following is correct?
On subsidized loans, you never pay any interest; you pay interest on unsubsidized loans.
On subsidized loans, the government pays the interest while you're in college, and then you pay the interest once you're no longer enrolled.
With subsidized loans, if you don't graduate and earn a diploma, you don't have to pay those loans back. All unsubsidized loans must be repaid.
Subsidized loans come from private banks, while unsubsidized loans come from the Federal government.
To qualify for federal student loans, you must...
go college in your home state.
fill out a FAFSA.
apply directly to the school of your choice for financial aid.
apply to a bank for a student loan.
What is a stock?
A financial obligation of a company
A certificate of debt
A share of ownership in a company
A type of bond
What is another term for a stockholder?
Debenture holder
Creditor
Shareholder
Bondholder
What are dividends?
Penalties paid to stockholders for poor company performance
Share of the profits paid to stockholders
Monthly fees that stockholders pay to the company
Loans taken by the company from stockholders
What type of stock provides voting rights to its owners?
Preferred Stock
Common Stock
Both A and B
Neither A nor B
Which type of stock typically costs more due to less risk?
Common Stock
Preferred Stock
Both A and B
Neither A nor B
What is a stock symbol also known as?
A ledger
A ticker
A bond
A certificate
How many stocks are listed in the Dow Jones Industrial Average (DOW)?
30
500
100
50
What is the goal when trading stocks?
To buy high and sell low
To buy and hold indefinitely
To buy low and sell high
To sell before the market closes
What does IPO stand for?
Investment Portfolio Option
International Public Organization
Initial Public Offering
Internal Public Ownership
What is the main purpose of going public with an IPO?
To avoid regulatory oversight
To reduce the number of shareholders
To limit the company's growth potential
To raise cash for the company
What is the purpose of a company's Roadshow during the IPO process?
To generate interest in the IPO
To promote the company's products
To conduct market research
To recruit new employees
What is a 'bear market'?
A market in which prices are rising or expected to rise
A market for animal products
A market in which prices are falling or expected to fall
A market with no price changes
Which financial instrument represents a loan made by an investor to a borrower?
Stock
Mutual Fund
Bond
Dividend
What does it mean to have a diversified investment portfolio?
Investing in a variety of assets to reduce risk
Investing all money in one company
Only buying government bonds
Holding only cash
What does it mean to short a stock?
Buying a stock with the hope it will increase in value
Holding a stock for the long-term
Selling a borrowed stock with the expectation that its price will fall
Investing in multiple stocks for diversification
How do investors make money from shorting a stock?
By buying low and selling high
By borrowing the stock and selling it, then repurchasing at a lower price
By earning dividends
By holding the stock for many years
What is one risk associated with shorting a stock?
Limited dividend payments
Potentially unlimited losses
Lower transaction fees
Guaranteed profits
Who lends the shares for shorting?
The government
Stockbrokers
Banks
Individual investors
Which of the following actions can help improve your credit score?
Making payments on time
Maxing out your credit cards
Closing old credit accounts
Applying for multiple loans at once
What is the primary benefit of owning common stock in a company?
Guaranteed fixed dividends
Voting rights in company decisions
Tax-free earnings
Protection against market losses
Which document must you complete to apply for federal student financial aid?
W-2 Form
Credit Report
Loan Agreement
FAFSA
All of the following would show up on a credit report EXCEPT...
Student loan activity
Credit card payment history
Payment history of your car loan
Salary of your current job
Which of the following individuals or groups would be the LEAST likely to look at your credit score?
Someone interviewing you for a job
Credit card companies
An insurance company reviewing your applicant for auto insurance
A bank representative who is helping you open a savings account
A free credit report service is authorized by federal law but only accessible once per year. What is the name of this service?
Annual Credit Report.com
TransUnion
Experian
Wells Fargo Bank
What is a credit report?
Information that describes a person's financial history
A ranking of the best credit cards
A list of all the banks in America
A list of 'credits' a person has earned by being a customer of their bank
Most negative information stays on your credit report for...
4-6 years
7-10 years
12-15 years
20-30 years
Which is NOT on your credit report?
Your social security number and date of birth
Your criminal record
Your open and closed accounts
Your cash purchases
Your payment history
the interest rate charged on credit cards, IF you carry a balance
Annual Percentage Rate
Term
Credit Limit
Universal Default
A legal process to get out of debt when you can no longer make all your required payments
Universal Default
Bankruptcy
Payday loan
Amortization
Banks and lenders use credit scores to determine...
The likelihood that someone is able to repay debt
How successful a person is
How much collateral someone has available to put up for a loan.
