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Worksheets2024 NYS FBLA Personal Finance
Total questions: 100
Worksheet time: 50mins
What is the purpose of creating a budget?
to track expenses after they occur
to plan and manage income and expenses
to maximize credit card rewards
to avoid paying taxes
Which type of insurance provides coverage for medical expenses and healthcare services?
home insurance
life insurance
health insurance
auto insurance
Which of the following is considered a liquid asset?
real estate
retirement account
savings account
collectible items
What is the minimum age requirement to open an individual retirement account (IRA)?
16 years old
18 years old
21 years old
There is no minimum age requirement
Which of the following is an example of a variable expense?
mortgage payment
health insurance premium
monthly utility bill
car loan payment
What does APR stand for in relation to credit cards and loans?
Average Purchase Rate
Annual Percentage Rate
Accumulated Principal Reduction
Adjustable Payment Ratio
What is the primary purpose of a checking account?
to earn interest on deposited funds
to save money for long-term goals
to track income and expenses
to conveniently access and manage funds for daily transactions
Which of the following is a characteristic of a Roth IRA?
Contributions are tax-deductible
Earnings grow tax-free, and withdrawals are tax-free in retirement
Withdrawals can be made penalty-free at any age
There is no contribution limit
Which of the following is an example of an investment with potentially high returns and high risk?
savings account
treasury bonds
stock market investment
certificate of deposit (CD)
Which of the following credit scores indicates the highest creditworthiness?
350
550
750
900
What type of financial aid does not need to be repaid and is typically based on financial need?
grants
scholarships
loans
work-study programs
What is the term used for the process of evaluating the risk and potential return of an investment?
inflation
diversification
asset allocation
risk assessment
Which of the following best defines "behavioral economics"?
The study of how individuals make rational financial decisions.
The influence of psychology on economic behavior.
The study of macroeconomic indicators and their impact on the economy.
The mathematical modeling of financial markets.
Which of the following is a type of tax levied on income earned by individuals?
sales tax
property tax
excise tax
income tax
Which of the following skills involves comparing prices, reading labels, and making informed buying decisions?
budgeting skills
negotiation skills
consumer skills
investment skills
What is the purpose of a cover letter when applying for a job?
to provide a detailed work history
to request an interview
to explain gaps in employment
to introduce and highlight key qualifications
Which of the following taxes is paid by both employees and employers to fund Social Security and Medicare programs?
income tax
sales tax
payroll tax
property tax
Which of the following is an example of an opportunity cost?
paying rent for an apartment
saving money for a vacation
spending money on new clothes
choosing to attend a concert instead of a movie
Which of the following is a characteristic of a certificate of deposit (CD)?
high liquidity and easy access to funds
no risk of losing principal
high interest rates and potential for significant returns
fixed term with penalties for early withdrawal
Which of the following career paths typically requires a college degree and involves providing medical treatment and care to patients?
lawyer
engineer
nurse
electrician
Which of the following is a fundamental principle of budgeting?
saving as much money as possible
allocating all income to discretionary spending
balancing income and expenses
ignoring financial goals and priorities
Which type of insurance provides coverage for damages caused by natural disasters, theft, and vandalism to your home?
health insurance
life insurance
homeowners insurance
auto insurance
Which of the following is an example of an emergency fund's purpose?
investing in the stock market
planning for a vacation
covering unexpected expenses
paying off credit card debt
What is the primary purpose of investing money?
ensuring immediate financial security
building wealth over time
financing short-term goals
eliminating credit card debt
What is the recommended way to use a credit card responsibly?
making only the minimum payment each month
maxing out the credit limit to build credit quickly
paying the full balance by the due date
using multiple credit cards to increase credit scores
What type of financial aid requires repayment, typically with interest, after graduation?
loans
grants
scholarships
work-study programs
Which of the following is a characteristic of a savings account?
high interest rates and potential for significant returns
fixed term with penalties for early withdrawal
low risk and easy access to funds
providing tax benefits in retirement
Which of the following is an example of an investment with potentially lower returns but lower risk?
savings account
treasury bonds
stock market investment
certificate of deposit (CD)
Which of the following is a form of income tax that is deducted directly from an employee's paycheck?
sales tax
property tax
excise tax
payroll tax
What is the primary purpose of a 401k retirement account?
to provide short-term emergency funds
to finance large purchases, such as a car or home
to save money for college expenses
to invest and save for retirement
Which of the following is a type of insurance that covers injuries to another person or damage to their property when you are at fault?
health insurance
life insurance
liability insurance
auto insurance
What is the purpose of the FAFSA (Free Application for Federal Student Aid)?
to apply for college admission
to determine eligibility for financial aid for college
to apply for student loans
to register for college classes
Which of the following best defines "net pay" or "take-home pay"?
the total amount earned before taxes and deductions
the amount earned after taxes and deductions are taken out
the total amount of money saved in a bank account
the amount of money borrowed from a financial institution
Which of the following is a tax-advantaged retirement account for self-employed individuals or small business owners?
Traditional IRA
401k
Roth IRA
SEP IRA (Simplified Employee Pension)
Which of the following financial products typically offers the highest interest rates?
checking account
money market account
certificate of deposit (CD)
savings account
What is the main purpose of investing in a diversified portfolio?
to reduce the risk associated with investing
to maximize immediate returns
to focus on a single high-risk investment
to eliminate the need for long-term financial planning
Which of the following factors affects your credit score the most?
age
income level
amount of debt owed
number of social media followers
What is the purpose of a 529 college savings plan?
to provide insurance coverage for college expenses
to invest in the stock market for college funding
to save money for retirement
to save and invest for college expenses
Which of the following best defines "compounding interest"?
interest calculated on the original principal amount only
interest earned on the total balance including previous interest
interest charged by a lender on a loan
interest rates set by the Federal Reserve
What type of insurance provides coverage for damages to your car due to accidents or theft?
home insurance
life insurance
health insurance
auto insurance
Which of the following is an example of a short-term financial goal?
saving for retirement
paying off student loans
buying a new car in two years
purchasing a vacation home in ten years
What is the primary purpose of a W-4 form?
to file income tax returns
to report interest income from savings accounts
to apply for student loans
to determine the amount of income tax to be withheld from an employee's paycheck
Which of the following is an example of a long-term financial goal?
buying a new smartphone next month
paying off credit card debt within six months
saving for a down payment on a house in nine years
taking a weekend trip to a nearby city next week
Which of the following is an example of a fixed expense?
groceries
entertainment
college loan payment
restaurant meals
Which of the following is a characteristic of a money market account?
high interest rates and potential for significant returns
fixed term with penalties for early withdrawal
low risk and easy access to funds
providing tax benefits in retirement
What is the recommended amount of your income to save for emergencies in an emergency fund?
5% of monthly income
10% of monthly income
20% of monthly income
3 to 6 months' worth of living expenses
Which of the following is a type of credit score used by most lenders?
FICO score
SAT score
GPA score
IQ score
What is the purpose of a debit card?
to build credit history
to earn cashback rewards
to borrow money from the bank
to make purchases using money from a checking account
What is the purpose of diversification in investing?
to focus on a single high-risk investment
to minimize returns and maximize risk
to reduce the impact of potential losses by spreading investments across various assets
to eliminate the need for long-term financial planning
Which of the following is an example of a tax-deductible expense for individuals?
interest on a credit card debt
property taxes on a primary residence
entertainment expenses
home improvements
The Rule of 72 is
a tool to determine the number of years until retirement for an employee
used to estimate how long it takes for prices to double using a given inflation rate
the legal code for requiring companies to provide a match on retirement savings
used to calculate interest rates for savings
What is the purpose of a credit score?
to determine how much money you can borrow from a bank
to evaluate your ability to save money
to assess your risk as a borrower and establish creditworthiness
to decide whether you can invest in the stock market
Which of the following is a characteristic of a high-yield savings account?
low interest rates and potential for significant returns
fixed term with penalties for early withdrawal
high interest rates and easy access to funds
providing tax benefits in retirement
What is the primary purpose of rent-to-own agreements?
to allow tenants to purchase the rented property after a certain period
to provide short-term housing to travelers
to offer flexible rental payment options for tenants
to allow landlords to rent out their property without owning it
What is the purpose of a traditional 401(k) retirement account?
to provide short-term emergency funds
to finance large purchases, such as a car or home
to save money for college expenses
to save and invest for retirement, with contributions made with pre-tax income
Which of the following best defines "opportunity cost"?
the amount of money earned from investments
the cost of borrowing money from a bank
the potential return from an investment
the value of the next best alternative that is given up when a decision is made
What is the purpose of a grace period on a credit card?
to provide time to pay off the balance without interest
to prevent overspending on the credit card
to offer cashback rewards to cardholders
to allow multiple credit card purchases in one billing cycle
Which of the following is a characteristic of a budget deficit?
spending less money than earned
spending more money than earned
having a high credit score
being debt-free
What is the purpose of a life insurance policy?
to provide coverage for damages to your car
to cover medical expenses for the policyholder
to offer protection for the policyholder's beneficiaries in case of death
to provide coverage for damages to a homeowner's property
Which of the following is an example of an expense that can be adjusted to save money?
rent or mortgage payment
health insurance premium
electricity bill
student loan repayment
What is the primary purpose of a money market account?
to provide short-term emergency funds
to finance large purchases, such as a car or home
to save money for college expenses
to earn higher interest rates than a regular savings account
What is the purpose of a savings account?
to earn higher interest rates than a checking account
to make daily transactions and manage funds
to invest in the stock market
to borrow money from a financial institution
Which of the following best defines "liquidity" in personal finance?
the ease with which an asset can be converted to cash without significant loss of value
the number of credit cards an individual possesses
the level of risk associated with a financial investment
the amount of money an individual earns each month
What is the primary purpose of a Roth 401(k) retirement account?
to provide short-term emergency funds
to finance large purchases, such as a car or home
to save money for college expenses
to save and invest for retirement, with contributions made with after-tax income
Which of the following best defines "inflation" in relation to the economy?
a decrease in the general level of prices for goods and services
an increase in the general level of prices for goods and services
a sudden increase in consumer spending
a decrease in consumer spending
What is the purpose of a money order?
to earn interest on a lump sum of money
to provide cashback rewards
to send money securely through the mail
to borrow money from a bank
What is the primary purpose of a financial planner?
to provide short-term loans to individuals
to offer investment advice and create financial plans for clients
to manage bank accounts and loans
to collect taxes from individuals and businesses
The stages that an individual goes through based on stages in the family and financial needs is called the
budgeting procedure
adult life cycle
financial planning process
personal economic cycle
ATM stands for
automatic taking machine
available teller machine
automatic teller machine
available taking machine
All of the following are deposit institutions EXCEPT
commercial banks
credit unions
saving and loans
credit card companies
Installment credit became very popular in the United States with the advent of the
airplane
automobile
computer
train
When used effectively, credit can result in
default
bankruptcy
loss of creditworthiness
improved lifestyle
A typical grace period for many credit cards is
0-10 days
10-20 days
20-25 days
25-40 days
As a general rule, the minimum of your net income that should be set aside as savings is
1%
5%
10%
25%
Avery uses the 50/30/20 budgeting strategy. Her take-home pay for the week is $1,200.
How much will she allocate for wants?
$120
$240
$360
$600
What happens to the buying power of money during periods of inflation?
buying power decreases
buying power increases
buying power doesn’t change
buying power could increase or decrease
The amount a policyholder must pay for a loss before the insurance company will pay is a
coinsurance payment
premium
deductible
dividend
Items such as rare coins and antiques are classified as
commodities
collectibles
futures
securities
A loan guaranteed by a pledge of property or other assets is called a(n)
secured loan
unsecured loan
diversified loan
debenture
The price at which a share of corporate stock is currently being bought and sold is its
book value
exchange value
face value
market value
If you are having trouble meeting your credit obligations, the first thing you should do is
file for personal bankruptey
contact your creditors
consult a credit counselor
apply for a consolidation loan
The greatest disadvantage of using credit cards is
being tempted to overspend
having your credit card stolen
making on-line purchases
not having a record of expenses
Which of the five C’s of credit does your income affect?
capacity
character
collateral
credit history
An advantage of owning a home instead of renting is that you
can move easily
may have tax advantages
need less money
save money by doing your own repairs
A preapproved loan from a financial institution that provided access to cash for future needs or emergencies is a(n)
charge account
emergency fund
line of credit
mortgage
A scam that uses online pop-up messages or email to deceive you into disclosing personal information is called
encrypting
malware
phishing
spam
One main distinction between stock and bonds is that
bonds are shares of ownership in a corporation
bonds represent equity, not debt
a bond’s interest does not go up and down, like stock dividends
corporations are required to pay dividends on stocks but not bonds
The general rule of thumb is that you will need between ______ of your preretirement income to maintain your standard of living in retirement.
50-60%
60-75%
75-85%
95-100%
Money paid for the use of someone else’s money is called
assets
collateral
dividends
interest
The price of a share of stock divided by the corporation’s earnings over the past 12 months is the
earnings per share
P/E ratio
percent yield
ROI
A professionally managed group of investments bought using a pool of money from many investors is called a
mutual fund
passbook account
Ponzi scheme
savings bond
Payments citizens make to the government to pay for government services are called
audits
deductions
returns
taxes
Which plan is available to people under the age of 65 who qualify under state welfare and public assistance programs?
Medassist
Medicaid
Medicare
Medigap
To be insolvent means that you are
unable to get more credit
unable to finance your car
unable to pay your bills
unwilling to meet your financial responsibilities
Which of the following is true when unemployment is low?
Fewer people are looking for work.
It is a sign that the economy is not doing well.
It can result in a lower standard of living.
Personal difficulties for families often become more common.
The ______ enforces rules about labeling and advertising.
Better Business Bureau
Consumer Product Safety Commission
Federal Trade Commission
Food and Drug Administration
Losses or risks that an insurance policy will NOT cover are called
claims
deductibles
exclusions
premiums
In a health maintenance organization (HMO), members usually pay a small
claim
coinsurance
copayment
deductible
In the United States, the power to impose federal taxes rests with the
Congress
Department of the Treasury
Internal Revenue Service
President
Tax returns must be filed by ______ each year.
January 1
January 31
April 15
June 30
