Why is it important to fill out the FAFSA?

It determines your eligibility for federal financial aid, grants, and loans

All of the following are common benefits of mobile banking, EXCEPT…

Avoid all banking fees, like overdraft fees

Sayeed has an extra $100 for debt repayment. To minimize his total interest, which debt should he put the $100 towards?

His credit card: $2,500 at a 19.5% interest rate

It’s January and Tim is preparing to file his taxes. Which of the following steps is INACCURATE?

Tim has until February 15th to file his taxes

Which answer correctly pairs the type of auto insurance coverage with its description?

Collision coverage: covers the cost of damages to your car from a crash

Risk pooling is a process where…

Insurance companies spread risk out over a large group of people

A part of a job application that illustrates why you would be a good fit

Which of the following is an example of the Pay Yourself First budgeting strategy?

Keith automatically deposits 15% of his paycheck into savings each month

How are student loans different from scholarships and grants (S&G)?

Loans must be repaid; S&G do not

Which of the following is TRUE when taking out an auto loan?

The amount of money you borrow is called the loan principal

Which step will help prevent identity theft?

Fatima regularly checks her bank statements for any suspicious transactions

The minimum payment on a credit card tells you the lowest amount you can pay that month in order to ___________________.

Remain in good standing with the credit card company

Which of the following is TRUE about a secured credit card?

Secured credit cards have a spending limit equal to the deposit amount

What is the benefit of compounding in savings accounts?

It yields larger returns than simple interest

How is putting money in a savings account different from investing in the stock market?

Saving is best for short-term needs; investing is best for long-term goals

Mia’s renters insurance has a $15 premium, $250 deductible & $100,000 coverage limit. Her $550 bike is stolen. Who pays?

Mia pays $250; her insurance pays $300

Why would someone review your credit report?

To evaluate how responsible you are with borrowing and repaying money

If you are in the 22% marginal tax bracket, that means…

You will pay a 22% tax rate on your last dollar earned

Which of the following correctly pairs the term with its definition?

Interest Rate: The rate charged for borrowing money

Which of the following best describes a credit report?

A detailed record of your borrowing and repayment history

To calculate the net price for a college, you...

Subtract any grants and scholarships from the sticker price

Which of the following actions is most recommended after a job interview?

Sending a personalized thank you message

Which of the following is an example of a dark pattern?

A subscription service that requires you to call customer service to cancel

Compared to alternative banking services (e.g. check cashing), traditional banks…

Offer more consumer protections

Usually, ______ are easier to reduce because they change monthly, compared to ______ which are set costs you pay monthly

variable expenses; fixed expenses

All of the following would reduce Maria’s checking account balance, EXCEPT…

Receiving a direct deposit from her employer

Which person is using the comparison shopping strategy?

Mei checks prices at multiple stores before deciding which phone to buy

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Personal Finance Final Review

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Questions 30

Answers

1
Why is it important to fill out the FAFSA?
It determines your eligibility for federal financial aid, grants, and loans
It guarantees you will receive scholarships from your college
It allows you to register for classes before other students
It automatically lowers the cost of tuition for all students
2
All of the following are common benefits of mobile banking, EXCEPT…
Check your account balance at any time
Avoid all banking fees, like overdraft fees
Transfer money without visiting a bank branch
Deposit checks using your phone’s camera
3
Sayeed has an extra $100 for debt repayment. To minimize his total interest, which debt should he put the $100 towards?
His credit card: $2,500 at a 19.5% interest rate
His federal student loans: $4,300 at a 6.53% interest rate
His personal loan: $500 at a 3% interest rate
His car loan: $2,400 at a 7.2% interest rate
4
It’s January and Tim is preparing to file his taxes. Which of the following steps is INACCURATE?
Tim will receive his W-2 from his employer by the end of January
If Tim owes taxes, he must pay them by April 15th
Tim will complete the form 1040 to file his taxes
Tim has until February 15th to file his taxes
5
Shirley’s take-home pay, aka her _____, was lower than she expected because of _____ taken out for taxes and retirement
Net pay; capital gains
Gross pay; deductions
Gross pay; capital gains
Net pay; deductions
6
Which answer correctly pairs the type of auto insurance coverage with its description?
Collision coverage: covers the cost of damages to your car from a crash
Comprehensive coverage: covers costs if the other driver lacks insurance
Personal injury protection: covers the cost of other people's injuries
Liability coverage: covers the cost of your injuries from a crash
7
Risk pooling is a process where…
Insurance companies spread risk out over a large group of people
Colleges set aside 10% of acceptances for applicants deemed “risky”
Banks lower their risk by offering variable interest rates
Investors focus on high-risk assets with the chance of a high return
8
A cover letter is...
A form that you submit to take paid time off from work
A part of a job application that illustrates why you would be a good fit
A legal document that you sign to accept a job offer
Another term for your resume
9
Which of the following is an example of the Pay Yourself First budgeting strategy?
Riley divides her cash into envelopes for different budget categories
Keith automatically deposits 15% of his paycheck into savings each month
Andreas spends 50% of his income on needs, 30% on wants, and 20% on savings
Lisa uses a budget spreadsheet to track every dollar she spends
10
How are student loans different from scholarships and grants (S&G)?
Loans must be repaid; S&G do not
Loans do not require you to work part-time; S&G do
Loans are for everyone; S&G are only for students with 4.0 GPAs
Loans are interest-free; S&G have hidden fees
11
All of the following strategies will reduce how much interest you pay on a loan, EXCEPT…
Extending the loan term
Putting down a larger down payment
Finding the lowest available interest rate
Making additional payments to reduce the loan principal
12
Which of the following is TRUE when taking out an auto loan?
Choosing a shorter loan term will lower your monthly payments
The loan principal includes both the car's price and the interest you owe
The amount of money you borrow is called the loan principal
The total interest paid is the same regardless of the loan term
13
Which step will help prevent identity theft?
Fatima regularly checks her bank statements for any suspicious transactions
Yuki uses the same password for all his online accounts for convenience
John uses public Wi-Fi when accessing sensitive accounts online
Sofia keeps her Social Security card in her purse for easy access
14
The minimum payment on a credit card tells you the lowest amount you can pay that month in order to ___________________.
Avoid accruing any interest on your balance
Have access to your credit card the following month
Increase your credit limit
Remain in good standing with the credit card company
15
Which of the following is TRUE about a secured credit card?
Secured credit cards have a spending limit equal to the deposit amount
Secured credit cards do NOT build your credit history
Secured credit cards are higher risk for a bank than other credit cards
Secured credit cards usually have a higher credit limit than other cards
16
What is the benefit of compounding in savings accounts?
It minimizes your tax liability
It makes it easier to transfer money from checking to savings
It allows you to make more transactions each month
It yields larger returns than simple interest
17
How is putting money in a savings account different from investing in the stock market?
Saving earns about 5-7% per year; investing earns about 1-2% per year
Saving is usually high-risk; investing is usually high-return
Saving is best for building wealth; investing is best for an emergency fund
Saving is best for short-term needs; investing is best for long-term goals
18
Mia’s renters insurance has a $15 premium, $250 deductible & $100,000 coverage limit. Her $550 bike is stolen. Who pays?
Mia pays $250; her insurance pays $300
Mia pays $0; her insurance pays $550
Mia pays $300; her insurance pays $250
Mia pays $15, her insurance pays $535
19
Why would someone review your credit report?
To calculate your monthly budget and spending habits
To determine your annual income and employment history
To evaluate how responsible you are with borrowing and repaying money
To see how much money you have in your savings account
20
Which investment automatically adjusts your asset allocation over time?
Target Date Fund (TDF)
401(k)
Individual Stock
Index Fund
21
If you are in the 22% marginal tax bracket, that means…
You will pay a 22% total tax rate, split between you and your employer
You will pay a 22% tax rate on your total income
You will pay more in taxes than 22% of Americans
You will pay a 22% tax rate on your last dollar earned
22
Which of the following correctly pairs the term with its definition?
Down payment: The original amount of money borrowed
Interest Rate: The rate charged for borrowing money
Cosigner: A valuable item that the lender can take as a form of payment
Principal: A part of the item's cost that is paid at the time of purchase
23
Which of the following best describes a credit report?
A document that shows your current credit and balances only
A detailed record of your borrowing and repayment history
A summary of your monthly income and expenses
A list of all the bank accounts you have opened
24
To calculate the net price for a college, you...
Divide the total cost of attendance by the number of semesters
Add the cost of tuition to your room and board expenses
Multiply the tuition by the number of years you plan to attend
Subtract any grants and scholarships from the sticker price
25
Which of the following actions is most recommended after a job interview?
Sharing salary information from your current job
Submitting your cover letter
Waiting 2-3 weeks before following up
Sending a personalized thank you message
26
Which of the following is an example of a dark pattern?
A website that asks for confirmation before adding extra items to your cart
A social media app that clearly show you how to turn off notifications
An online store that applies a discount with a valid coupon code
A subscription service that requires you to call customer service to cancel
27
Compared to alternative banking services (e.g. check cashing), traditional banks…
Offer more short-term high-cost loans
have higher fees for services like check cashing and money orders
Make it harder to build a credit history
Offer more consumer protections
28
Usually, ______ are easier to reduce because they change monthly, compared to ______ which are set costs you pay monthly
variable expenses; fixed expenses
wants; needs
fixed expenses; variable expenses
needs; wants
29
All of the following would reduce Maria’s checking account balance, EXCEPT…
Setting up an automatic payment for her utility bill
Using her debit card to buy groceries
Writing a check to pay her rent
Receiving a direct deposit from her employer
30
Which person is using the comparison shopping strategy?
Jamal chooses a store based on how close it to his house
Mei checks prices at multiple stores before deciding which phone to buy
Anika buys a product because it's the first one she sees in an ad
Elijah buys the first pair of shoes he finds without looking at other ones

Personal Finance Final Review Flashcards | StudBud