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Financial Literacy Flashcards | StudBud
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Financial Literacy
Financial Literacy
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StudBud Administration
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A #financialliteracy review
Flashcards
40 cards
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Practice quiz
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Host live
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Questions
40
Answers
1
How does charging interest encourage banks to make loans?
allows banks to pay interest to people with savings accounts
it allows them to make profits by lending money
it discourages people from borrowing $$ from their friends
it ensures that borrowers will pay them back
2
How do banks make profits?
By charging people interest to keep their money there
By charging people interest to borrow money
None of the above-banks are nonprofit institutions
3
Which of these statements is an opinion about investing?
every stock purchase involves a degree of risk
buying stock in a small company is a bad idea
4
True or False: If the information on your credit report is inaccurate, it cannot be changed.
True
False
5
Your credit report is updated
once every ten years
twice a year
daily
every month
6
What might happen if the gov't did not insure bank deposits?
Banks could no longer make loans to their customers
People would lose their savings if their banks closed
Banks would be robbed far more often
7
When you purchase a mutual fund, you
trade each of your stocks for a bond
invest in a company, & the company invests in you
can choose which stocks an expert will invest in
invest in a group of stocks & bonds that an expert selects
8
Wes will need years to accumulate enough money to move to Norway. He should probably open a:
credit card account
checking account
debit card account
savings account
9
Which of these is an opinion about interest?
An interest rate of 20%, compounded monthly is far too high
Most American banks offer interest rates below 10%.
Interest can be compounded yearly, monthly, or even daily
10
What do sales tax and income tax have in common?
They both apply to things you buy
You pay them both only once a year
They're both progressive taxes
They're both calculated as percentages
11
When you purchase something with a credit card, you
decrease your debt
buy it now and promise to pay it later
automatically improve your credit score
pay for it now but receive it later
12
Which condition would lead to the highest prices?
high supply, low demand
high supply, high demand
low supply, high demand
low supply, low demand
13
When you borrow money from a bank, where does that money come from?
a credit card company
the federal government
the bank's own business checking account
the accounts of the bank's customers
14
People in debt are often said to have a budget deficit. What does that mean?
They had no income
Their expenditures exceeded their income
They never set up a budget, which directly led to their debt
15
Which two things does a budget compare?
income and investments
expenses and expenditures
savings and interest
income and expenses
16
Compared to a checking account, the rules governing your use of a savings account are more:
Restrictive
Intuitive
Negotiable
Liberal
17
What might be an asset held by a large chain of fast-food restaurants?
new and returning customers
popularity and public opinion
outstanding debt and expenses
real estate and equipment
18
How is a stock market like a supermarket?
both are only located in highly populated cities
both are examples of powerful corporations
both require customers to get licenses before allowed to buy
in both places, people exchange money for a variety of items
19
Which of the following is a false statement?
Some credit cards come with low introductory costs.
Bad credit can make it hard for you to borrow money.
The interest cannot be more than your original purchase.
20
What does it mean to "buy low and sell high"?
buy stocks with low returns & sell stocks with high returns
buy low-risk stocks and sell high-risk ones
buy stock at a low price and sell it after the price goes up
sell more stocks than you buy
21
What is a minimum monthly payment?
the minimum you must purchase with your credit card monthly
the minimum interest you rack up each month
the minimum amount on your credit card bill you pay monthly
the minimum annual percentage rate on credit card
22
The key to keeping a budget is to spend your money prudently. What does "prudently" mean?
Extragavantly
Wisely
Thoughtlessly
Stingily
23
Which of the following is a true statement?
Only you can access your credit score
Your credit score is a number that ranges from 0-100.
Reasonable debt can be good for your credit score.
Your credit score is fixed.
24
After writing a check for $172, your account is overdrawn by $31. How much money did you have?
$141
$203
$131
$172
25
What can you infer from Tim's practice of saving receipts?
Knowing how much you spend helps you keep an accurate budget
You can't know how much you spend unless you save receipts
The more receipts you collect, the more money you'll save
26
The bigger the payment that you make on your credit bill, the
more interest you will have to pay in total
less interest you will have to pay in total
lower your annual fee
higher your APR
27
Which method of investing offers the least risk?
investing in many diverse industries
investing solely in new businesses
investing in a single industry
investing solely in your company's stock
28
What does it mean to own a share of stock in a company?
that you can work for the company if you need a job
that you have to supply money for the company's purchases
that you share in the money the company makes or loses
that you have veto power over the company's decisions
29
What is the IRS?
US gov't agency that oversees collection of federal taxes
US gov't agency decides how high taxes should be
US gov't agency that decides how to punish tax cheats
US gov't agency that sets federal tax policy
30
Bonds are
money the government lends you to invest in a new company
very risky investments
the same as savings accounts
money you lend to a business or government
31
If you have good credit, you
will never have to borrow money
have a history of paying back money you owe on time
are more likely to be denied a loan
have never paid back any money you owe on time
32
Which of the following is a true statement?
Your credit score can never increase, only decrease
a landlord can access your credit report
if your credit score is high, you won't have to repay money
you can access your credit report for free once every month
33
Which of the following is true?
the more money you have in a bank the more interest you earn
the more $ you borrow, the less interest you pay
the more $ you have in a bank, the less interest you earn
the less $ you borrow from a bank, the more interest you pay
34
Banks offer interest as an incentive to customers who open accounts. What is an "incentive"?
Punishment
Gift
Encouragement
Trick
35
Which of the following is a true statement about budgets?
allow people to track how and where their money is spent
setting up a budget will allow you to earn more money
they encourage people to spend as much money as possible
36
What is one consequence of going into bankruptcy?
Losing your job
Losing the ability to make a budget
Having some of your possessions taken away
Going to prison
37
Which of these is neither a good or a service?
a meal at a restaurant
a piano lesson
a $20 bill
a gallon of gasoline
38
According to the laws of supply and demand when will companies produce more of a product?
when demand decreases
when the price people will pay for it goes down
when the economy turns downward
when they can sell it for a higher price
39
A credit report is
the bill you receive monthly from the credit card company
a number that tells lenders how much money you earn
a record of your credit history, including current debt
a loan you will have to pay back later
40
A shareholder
lends money to a company to be paid back later
shares your investments with you
invests money on someone else's behalf
owns a portion of a company
