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WorksheetsAFS Final Review Questions
Total questions: 48
Worksheet time: 24mins
What is an advantage of having a direct deposit paycheck?
Receiving physical checks
Faster access to funds
Higher interest rates
Easier budgeting
What does a Bear Market indicate?
Rising stock prices
Falling stock prices
Stable stock prices
High trading volumes
What is the main source of income for people ages 20-45?
Social Security
Investments
Employment wages
Pensions
One benefit of an IRA is?
Immediate tax-free withdrawals
Tax-deferred growth
Unlimited contributions
Penalty-free early withdrawals
Money that is taken home is net pay or gross pay?
Net pay
Gross pay
Total pay
Base pay
How should one structure their financial goals?
Randomly select goals
Make them general and vague
Set specific and measurable goals
Avoid long-term goals
What can online banking do for you?
Provide physical cash
Send money via traditional mail
Offer 24/7 account access
Prevent all types of fraud
What should someone do to avoid identity theft?
Share personal information freely
Use simple passwords
Regularly monitor financial accounts
Keep PINs written on cards
Which insurance covers those who are seriously injured and cannot work?
Auto insurance
Homeowners insurance
Disability insurance
Travel insurance
What is true about interest rates on bonds?
They always change
They always stay the same
They can change or stay the same
They are determined by the bondholder
If a person wins $10,000 on a game show, that income is?
Non-taxable
Exempt from taxes
Taxable income
Charitable donation
A benefit of using a debit card is?
Higher credit scores
Carrying large amounts of cash
Avoiding debt accumulation
Unlimited spending limits
What is the Truth in Lending Act?
Limits interest rates on loans
Provides free credit reports
Requires clear disclosure of loan terms
Guarantees loan approval
If a person has insurance with a 500deductible,thatmeanstheyhavetopaythe 500 when?
Annually, regardless of claims
Each time they file a claim
Only for specific types of claims
When they first get the insurance
What are fixed, variable, and discretionary expenses?
Types of investments
Categories of expenses
Forms of income
Loan terms
What is a downside to being paid with a money order?
Difficult to obtain
Not widely accepted
Requires bank account
Higher risk of theft
How do beneficiaries get paid via a life insurance policy?
Monthly installments
Lump sum payment
As needed basis
By reimbursement
If someone has $100,000 in the bank, they should know that the FDIC…?
Will insure up to $50,000
Will insure up to $250,000
Will insure all their money
Does not insure savings accounts
What type of income is made via financial investments?
Wages
Dividends
Salaries
Pensions
What is opportunity cost?
The cost of missed opportunities
The cost of next best alternative
The amount of money spent
The cost of future investments
When calculating the dollar value of a job, which benefit should not be included?
Health insurance
Retirement plan
Private office
Paid vacation
A $10,000 investment will grow most when compounded…?
Annually
Quarterly
Monthly
Daily
When should someone use a restricted endorsement?
To cash the check quickly
To endorse it to someone else
To ensure the check is used as intended
To deposit the check into any account
What factors increase the likelihood of getting a job?
High school diploma
No work experience
Going to college
Limited skill set
Reasons to buy homeowners insurance?
Increase home value
Cover personal health expenses
Cover damage and expenses
Lower mortgage payments
The cost of using someone else's money is known as?
Principal
Dividend
Interest
Premium
Payday loans should be avoided because?
They are easy to get
They have low-interest rates
They are an expensive way to borrow money
They have no repayment terms
A disadvantage to taking out a loan at the max amount of years is?
Lower interest rates
Higher monthly payments
Less total interest paid
More interest paid
What is true about insurance cost and risk?
The greater the risk, the greater the cost
The lower the risk, the greater the cost
Risk does not affect cost
Insurance costs are fixed
People typically prefer credit unions because they?
Offer better stock options
Charge lower interest rates
Have more ATMs
Provide higher loan amounts
Why do firms give lower interest rates if given collateral?
It increases the loan amount
It has monetary value
It shortens the loan term
It is not necessary for loans
When making a large purchase, what should consumers do about their credit score?
Ignore it
Check it regularly
Lower it intentionally
Cancel unused credit cards
If a person has a $1,000 line of credit, that means that person can charge?
Unlimited amounts
Up to $1,000
Up to $500
No more than $100
If prices go up 3% per year and income remains the same, that income…?
Has more purchasing power than the previous year
Has less purchasing power than the previous year
Is unaffected
Increases by 3%
Why do companies issue stock?
To raise funds
To decrease market share
To avoid taxes
To reduce expenses
Telling an investor to “not put all eggs in one basket” really means?
Focus on one investment
Diversify your portfolio
Avoid risky investments
Sell all investments
How can an investor max out the time value of their money?
Save it in a bank
Spend it quickly
Earn interest on it/invest it
Keep it in cash
The stock market is regulated by?
The Federal Reserve
The Treasury Department
The SEC
The IRS
What might increase the cost of your car insurance premium?
No accidents
A lot of accidents
Good credit score
Low mileage
How to build a high credit score?
Avoid all credit cards
Keep debt low and pay bills on time
Pay only the minimum balance
Max out credit cards
Why should you save your money in an account that earns interest as opposed to a checking account?
Checking accounts have no fees
Interest-earning accounts grow your money
Savings accounts offer less flexibility
Checking accounts are more secure
How to calculate net worth?
Assets + liabilities
Assets - liabilities
Income - expenses
Total income
The purpose of investing is?
To spend money quickly
To earn more money over time
To save for emergencies
To reduce current income
How do banks make money?
Charging interest rates on loans
Providing free services
Offering checking accounts
Issuing credit cards
Why is credit history important?
So lenders know who to loan money to
To avoid paying taxes
To increase income
To open a bank account
To avoid ATM fees, a person should make withdrawals…?
At any ATM
At their bank’s ATMs
Using a credit card
Only during business hours
An 18-year-old with no credit history will be asked what when they apply for a credit card?
Required to have a co-signer or sufficient income
To provide their social security number
To pay a large deposit
To have a checking account
Why should someone avoid taking a cash advance on their credit card?
It improves credit scores
It has lower interest rates
It has higher fees and interest rates
It is interest-free
