The financial institution where Jill has a checking account will continue to pay out money for the checks she writes if

there is enough money in her account to cover the amount of the checks.

What does the consumer need to consider when applying for a variable interest rate mortgage?

The possibility of interest rates increasing in the future.

If a person loses a debit or ATM card, and the card is used by someone else, the person who

finds the card may withdraw money from the account.

Before a person borrows money from a bank to make a major purchase, which question is important for the them to answer?

How much interest will be paid over the life of the loan, plus cost of item

The definition of credit is

using someone else's money and promising to repay price, interest, and fees

It is Jan. and Ted wants to make sure he is able to pay a $1,200 annual insurance bill due next Dec. What should he do?

Budget $100 a month to save during the year in order to make the payment.

One major concern about retirement in the U.S. is that people are

not saving enough for living expenses needed during retirement.

A single person who is a recent college graduate just got a first full-time job. What would be his first financial goal?

Building an emergency savings account.

A person who wants money to be FDIC insured, will probably deposit the money in a

certificate of deposit (CD) at a bank.

An inexperienced investor wants to begin buying stocks. She should buy stock

through a full-service stockbroker.

How does the degree of risk that the insurance company has to take influence the cost of the insurance policy?

The higher the risk, the higher the cost of the insurance premium.

By law, promotional credit card interest rates

must last for at least 6 months.

There is a high risk for a stock to lose value when

the corporation that issued the stock declares bankruptcy.

The main difference between a (Roth IRA) and a (Traditional IRA) is that

Roth IRA withdrawals after age 59 1/2 are tax free.

A person will have a credit card fee on their monthly statement if the

previous month's bill was paid after the due date.

A person used a credit card to buy a flat screen TV that can be paid over 5 mths. Their future spending power is likely

decreased because some of her future earnings must pay for the new TV

The cash value on a whole life insurance policy is

the savings portion of the policy.

Faced with choosing between buying paper towels that are a low priced brand and a higher priced brand, a person should

research and compare both the quality and features of each product.

A stockholder receives a notice about the corporation's annual meeting and cannot attend. Therefore, the stockholder

can sign a proxy to transfer voting rights.

People use an Electronic Funds Transfer (EFT) service because it is a/an

convenient and secure way to move money.

When a check is made payable to cash, it

creates a check that anyone can cash.

A person is planning to go away to college next year. The person should open a personal bank account since it is

needed for depositing grant and loan funds.

All of the following are functions of the Federal Reserve System (Fed) EXCEPT to

advise on investment strategies.

The interest rate that is paid on a bank money market account balance

varies depending on current interest rates.

The benefit of having a checking account that earns interest is that the

balance in the account earns money.

Which of the following represents the broadest indicator of stock market performance?

The Standard & Poor's (S&P) 500 Index.

The routing number on a check is the

"driving directions" for money being transferred.

What is one benefit of paying the total credit card bill on or before the due date?

There will be no interest or late fee on the credit card bill next month.

What is the result of a person taking a 30-year, fixed-rate mortgage to buy a house or building?

Monthly mortgage payments remain the same for each year.

A true statement about the relationship between budgeting and a person's stage of life is that

as a person's situation in life changes, they should make budgetary changes

Why does a lender prefer giving a loan that is secured with collateral?

The collateral has monetary value and can be used if the loan defaults.

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EPF: W!SE Review

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Answers

1
The financial institution where Jill has a checking account will continue to pay out money for the checks she writes if
the money in the account has been on deposit for more than 30 days.
there is enough money in her account to cover the amount of the checks.
she keeps a record of checks written.
she has a good credit score.
2
A consumer is protected from credit card fraud or abuse through the
Truth in Lending Act.
Federal Deposit Insurance Corporation (FDIC).
Internal Revenue Service (IRS).
U.S. Department of the Treasury.
3
What does the consumer need to consider when applying for a variable interest rate mortgage?
The possibility of interest rates increasing in the future.
The overall financial strength of the lending agency.
The interest rate during the last year of the loan.
The potential credit score decrease.
4
In addition to the high cost of college tuition, what are some essential expenses that generally needs to be considered?
Entertainment.
Gifts and weekend trips.
Textbooks.
Owning a car.
5
What is the website address where you can request a free credit report each year from all of the 3 leading CRA's?
annualcreditreport.com
freecreditreport.com
mycredit.com
creditreport.com
6
If a person loses a debit or ATM card, and the card is used by someone else, the person who
owns the card needs to close all his bank accounts.
finds the card may withdraw money from the account.
owns the card is never liable for more than $50.
finds the card must change the account personal identification number.
7
Before a person borrows money from a bank to make a major purchase, which question is important for the them to answer?
When will this item have to be replaced in the future?
Can I pay for the item with my credit card each month over a 2 year period?
Will I ever have to borrow money again from this bank?
How much interest will be paid over the life of the loan, plus cost of item
8
The definition of credit is
interest earned on money borrowed through loans.
using saved money to finance a purchase.
using someone else's money and promising to repay price, interest, and fees
trading a good or serivce a person doesn't want for something they do want.
9
It is Jan. and Ted wants to make sure he is able to pay a $1,200 annual insurance bill due next Dec. What should he do?
Invest $100 a month in stocks to make the payment.
Include the total amount due for the policy in the December budget.
Charge the full amount of the bill to a credit card in December.
Budget $100 a month to save during the year in order to make the payment.
10
If a person receives a 3% salary raise and inflation is 5%, the real raise was
5%
3%
-8%
-2%
11
One major concern about retirement in the U.S. is that people are
qualified to collect Soc. Security checks at a younger age than in the past
not saving enough for living expenses needed during retirement.
saving more than they need for retirement.
retiring earlier than they did ten years ago.
12
A single person who is a recent college graduate just got a first full-time job. What would be his first financial goal?
Buying a life insurance policy.
Building an emergency savings account.
Creating a stock portfolio.
Buying a house.
13
Using a credit card creates
wealth.
captial gains.
debt.
capital losses.
14
The 3 main CRA's that provide lenders with information on a person's credit history are TransUnion, Equifax, and
E-Trade
Experian
American Credit Bureau
FreeCreditReport.com
15
A person who wants money to be FDIC insured, will probably deposit the money in a
credit union savings account.
certificate of deposit (CD) at a bank.
money market mutual fund at an investment firm.
bank issued life insurance policy.
16
Last year, a person had 3 car accidents resulting in the ins. co. paying $3,000 for repairs. Their premium will likely
remain the same.
be increased.
be decreased.
depend on who fixed the car.
17
An inexperienced investor wants to begin buying stocks. She should buy stock
directly from her credit card company.
through an online discount broker.
based on her interests.
through a full-service stockbroker.
18
How does the degree of risk that the insurance company has to take influence the cost of the insurance policy?
The higher the risk, the lower the cost of the insurance premium.
There is no relationship between the risk and the cost of the ins. premium.
The lower the risk, the higher the cost of the insurance premium.
The higher the risk, the higher the cost of the insurance premium.
19
A person with a credit score of 540 applies for a loan. She will likely get a
high-interest rate loan.
loan without late fees.
collateralized loan.
low-interest rate loan.
20
Declaring Chapter 13 personal bankruptcy will appear on a person's credit report
for a 3-year period.
until the person repays all debts owed.
until the person is able to receive a new credit card.
for a 7-year period.
21
By law, promotional credit card interest rates
are guaranteed for the life of the card.
cannot be raised more than 2% each month.
cannot be more than 1% for the first year.
must last for at least 6 months.
22
There is a high risk for a stock to lose value when
the corporation that issued the stock declares bankruptcy.
the corporation that issued the stock makes a profit each year.
interest rates are decreasing.
financial markets are strong.
23
A person's assets include his
health insurance benefits.
money in a savings account.
line of credit.
credit score.
24
The main difference between a (Roth IRA) and a (Traditional IRA) is that
a person with a Roth IRA must withdraw money before age 70.
employers decide how much money a person can withdraw from a Roth IRA.
Roth IRA withdrawals after age 59 1/2 are tax free.
money in a Roth IRA cannot be used for the purchase of a home.
25
A person will have a credit card fee on their monthly statement if the
amount owed on the credit card is below the credit limit.
person paid last month's bill in full on time.
previous month pmt was received by the credit card company before due date.
previous month's bill was paid after the due date.
26
A person used a credit card to buy a flat screen TV that can be paid over 5 mths. Their future spending power is likely
not affected because she has other loans.
not affected because she can sell the TV
decreased because some of her future earnings must pay for the new TV
increased because it shows she knows how to use credit.
27
Which of the following retirement plans allows an employer to match contributions that employees make?
Roth Individual Retirement Account (Roth IRA).
Traditional Individual Retirement Account (Traditional IRA).
Defined benefit plan.
401(k) plan.
28
A person who wants to save $20,000 for a down payment on a boat in 6-7 years is working to achieve a/an
intermediate-term goal.
long-term goal.
short-term goal.
value.
29
The cash value on a whole life insurance policy is
the death benefit minus the premiums paid.
equal to all the premiums paid.
the savings portion of the policy.
the face value of the policy.
30
Faced with choosing between buying paper towels that are a low priced brand and a higher priced brand, a person should
research and compare store and location where each product is sold.
buy the lower priced product.
research and compare both the quality and features of each product.
buy the higher priced product.
31
A stockholder receives a notice about the corporation's annual meeting and cannot attend. Therefore, the stockholder
loses the right to vote.
can request a rescheduling of the meeting.
loses the right to buy stocks until the next meeting.
can sign a proxy to transfer voting rights.
32
A person has a car loan that she has to repay monthly over 5 years. She has
a balloon payment loan.
a mortgage loan.
a secured installment loan.
an unsecured loan.
33
People use an Electronic Funds Transfer (EFT) service because it is a/an
easy way to earn higher interest and dividends on an account.
way to borrow money from a bank at no cost.
convenient and secure way to move money.
excellent way to build wealth.
34
When a check is made payable to cash, it
restricts the life of the check to no more than 5 days.
voids the check.
does not allow the check to be deposited.
creates a check that anyone can cash.
35
A person who is planning to retire can receive income from all of the following sources EXCEPT
Social Security.
a part time job.
term life insurance.
a retirement plan.
36
A person is planning to go away to college next year. The person should open a personal bank account since it is
needed for depositing grant and loan funds.
required by federal, state and local law.
necessary for paying tuition or meal plans.
a way to prevent identity theft.
37
All of the following are functions of the Federal Reserve System (Fed) EXCEPT to
oversee retail bank practices.
advise on investment strategies.
regulate the nation's money supply.
serve as the government's bank.
38
The interest rate that is paid on a bank money market account balance
is set at the time of the initial deposit into the money market account.
varies depending on current interest rates.
is determined by the date the account was opened.
fluctuates depending on the owner's creditworthiness.
39
The benefit of having a checking account that earns interest is that the
interest is tax free.
interest earned on the balance is matched by the bank.
bank fees are lower.
balance in the account earns money.
40
One responsibility of the Federal Reserve System (Fed) is to
monitor credit scores.
control inflation.
influence tax policy.
help small businesses.
41
The expenses of owning a home includes the cost of paying for
tuition for private education.
entertainment.
property insurance.
auto repairs.
42
Which of the following represents the broadest indicator of stock market performance?
The Russell 2000 Index.
The NASDAQ.
The Standard & Poor's (S&P) 500 Index.
The Dow Jones Industrial Average (DOW).
43
A person owns a corporate bond that paid $75 in interest this year. The interest income must be reported to the
Federal Depository Insurance Corporation (FDIC)
U.S. Department of Justice
Internal Revenue Service (IRS)
Federal Reserve System (Fed)
44
A person, working for her neighbor, is paid with a personal check. The least expensive way to cash the check is at a
check-cashing store in the community where she lives.
bank where she has an account.
pawn shop in her neighborhood.
bank near her home.
45
The routing number on a check is the
same as a person's Social Security number.
balance in a person's account.
indication of the size of a bank.
"driving directions" for money being transferred.
46
What is one benefit of paying the total credit card bill on or before the due date?
The credit card company will decrease the line of credit.
There will be no interest or late fee on the credit card bill next month.
The credit card co. will increase the grace period or interest rate.
There will be cash back given to the cardholder at the end of each year.
47
What is the result of a person taking a 30-year, fixed-rate mortgage to buy a house or building?
Inflation will cause the mortgage payments to decrease each year.
Monthly mortgage payments will increase each year.
Inflation will cause the mortgage payments to increase each year.
Monthly mortgage payments remain the same for each year.
48
A true statement about the relationship between budgeting and a person's stage of life is that
a budget is only needed after marriage.
as a person's situation in life changes, they should make budgetary changes
a person's budget should remain the same throughout the individual's life
a budget for one retired person should be the same for others in retirement
49
Why does a lender prefer giving a loan that is secured with collateral?
The collateral has monetary value and can be used if the loan defaults.
Borrowers with collateral generally earn more money.
Borrowers with collateral are likely to have additional assets.
The collateral increases the borrowers credit score and insures mthly pmts.
50
It is most beneficial if a person is able to buy a home when
interest rates are low.
interest rates are high.
the housing market is volatile.
unemployment is increasing.

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