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Financial Literacy Prep for Wise Test Flashcards | StudBud
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Financial Literacy Prep for Wise Test
Financial Literacy Prep for Wise Test
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Financial Literacy Review from Everfi
Flashcards
74 cards
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Practice quiz
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Questions
74
Answers
1
What type of investment has the highest risk?
Savings Account
Bond
Stocks
2
The ______ tells you how many years it will take an investment to double.
Rule of 72
Doublemint twin rule
bank
3
Your
net worth
is the difference between the amount you own and the debts you owe.
True
False
4
The return investment (ROI) from education is typically the highest for:
Someone with a 2 year degreee
someone with a 4-year degree
A high school graduate
a college applicant
5
Using the FAFSA form,you can apply for:
private loans
both a and b
the federal work study program
federal student loans
6
Which is cheaper, term or whole life insurance?
Whole
Term
7
The Federal Reserve System:
is the central bank of the US
was created by Congress to provide a safer monetary sytem
Is who you pay your taxes to
8
Compounding of interest allows a principal amount to grow at a ____ rate than simple interest.
faster
slower
exchange
9
You should reconcile your checking account
when you get your monthly bank statement
every week
every six months
once a year
10
A_________is generally considered an appreciating asset bcuz it will_________in value over time
house; decrease
house; increase
car; decrease
car; increase
11
Which of the following are costs associated with owning car?
Wear & tear fees
Fuel
Insurance
Repairs
12
What is a mortgage?
A type of rent used to pay for housing
a type of loan used to buy property
a measure of your credit rating
a measure of the value of a home
13
Identity thieves can use your personal information to
Get a cell phone contract
Open a credit card
Sign up for electricity service
All of the above
14
Which asset is more liquid?
money in a savings account
money in a certificate of deposit
a house
15
Which of the following is generally true about 401(k) and 403(b) retirement plans?
all the above
they restrict when you can withdraw your money
they offer some tax benefits
they are plans offered through employers
16
Pay that is fixed amount regardless of hours worked
Tip
Bonus
Salary
17
What is the best form of payment for a waitress at Applebee's?
salary
tip
wages
18
It's best to start saving for retirement when you're about 15 years away from retirement
True
False
19
Which document puts you at the least risk of identity theft?
Old tax records
Cash receipts
Pre-approved credit card offers
paycheck stubs
20
What is a credit union?
Where ppl with bad credit acquire loans
It's the same as a bank
Non-profit institution that is owned by its members
21
Which earns you more money over time?
Simple interest
No interest
Compound interest
22
Someone who organizes, manages, and assumes the risk of owning a business
Entrepreneur
Sole proprietorship
Partner
23
When buying stock in a company, you are:
investing in an index fund
diversifying your portfolio
buying a portion of the company
loaning money to a company
24
Renting provides_________flexibility but can lead to_________costs in the long-‐term
greater; lower
greater; higher
less;lower
less;higher
25
Committing money to an enterprise in order to earn a financial return is known as___.
Investing
salary
Plan of action
26
The main trade-off that all investors must consider is:
risk vs return
diversity vs uniformity
income vs cost
stocks vs bonds
27
The form you complete to determine how much tax to withhold from your paycheck is the_______.
W-4
1099
1040 EZ
W-2
28
It's important to reconcile your checking account to make sure of mistakes
True
False
29
Which investment offers the lowest risk?
Savings Account
Stocks
Bonds
30
What is the unauthorized use of a credit card?
using a credit card at a gas pump
using a credit card at the store
using a stolen credit card at a store
31
When you buy a ______________, you are loaning money to an organization.
Bond
Mutal Fund
Index Fund
Stock
32
Jan pays $70 each month for her auto insurance policy.This regular payment is called a:
claim
premium
deductible
co-pay
33
A business with co-owners, in which both parties are legally joined together
Partnership
Entrepreneur
Cooperation
Sole proprietor
34
After you send in your FAFSA form,what will you receive back?
a copy's of your family's tax returns
a copy of your complete FAFSA form
your IRS date retrieval form
your student aid report
35
Where can you find information about Financial Aid? Check all that apply
Online
Town hall
Counselor
College Financial Aid Officer
36
What is a tax exemption?
Something ppl have to pay higher taxes than other citizens
Something that may be claimed by an indiv. to reduce taxes
Something that ppl get when they have dependants
37
What is a recession?
A period of time in which the economy goes up
A period of time in which the economy goes down
A period of prosperity
38
When you purchase an item in a store, you may be charged__________.
property tax
sales tax
capital gains tax
income tax
39
A business owned by a group of stockholders
Corporation
Group of friends
Partnership
Sole proprietor
40
A list of steps needed to reach a career goal
Plan of action
Things needed to do
Steps to success
41
Which of the following will charge the highest interest rate?
pawn shops and payday lenders
credit unions
Banks
42
Municipal bonds are exempt from federal taxes and state taxes
False
True
43
What is deflation?
The rate at which the general level of prices goes down
When there is a reduction in the supply of money or credit
when the general level of prices goes up
44
An installment loan is:
a loan from your mom that you will pay next month
a loan in which you make monthly payments
a loan paid off in one lump sum
45
What is liquidity in business?
how quickly you can convert an asset to cash
water
money invested in a house
46
Pay that is figured under hourly rate
commission
Wage
Bonus
47
The largest secondary market for stocks/securities in the U.S, is the_________.
New York Stock Exchange
NASDAQ
Dow Jones
48
A voluntary payment offered to an employee based on quality of service
tip
bond
salary
49
Which of the following are NOT deducted on a typical paystub:
State Income Tax
Sales tax
Social security tax
Medicare tax
50
Diversification is __________.
buying many different types of stocks to have less risk
buying one type of stock
safer than having a portfolio that isn't diversified
51
What is the primary reason to issue stock?
to help investors earn high rate of returen
increase investor awareness of the company
distribute the risk of bankruptcy across investors
to raise money to grow the company
52
Insurance can help you:
reduce the chances of getting int an accident
cover all out of pocket costs
protect against unexpected accidents
minimize monthly expenses
53
When you buy insurance, you and the insurance company are_______________.
sharing the risk
entering into a contract
breaking the law
54
Which is better, a bull market or a bear market?
Bull
Bear
55
What is the best form of payment for a part-time employee at Best Buy?
wages
salary
Tip
commission
56
Which loan type requires you to make loan payments while you’re attending school?
Subsidized federal loan
Neither a & b
Both a & b
Unsubsidized federal loan
57
Which type of insurance requires you to have a Primary Care Physician?
HMO
PPO
58
Which institutions give loans?
all
payday lender
credit union
pawn shop
59
PAYMENTS OR PROPERTY GIVEN TO PEOPLE OR INSTITUTIONS, WHICH DO NOT HAVE TO BE PAID BACK
GRANTS
BONDS
STOCK
60
How much should you pay for coverage monthly? Premium $300 month; deductible $500
$500
$300
$800
$200
61
A bear market last longer than a bull market.
False
Ture
62
Which type of life insurance never expires?
Whole
Term
63
What are pensions and 401ks?
Taxes you pay
Ways to save for retirement
Insurance you buy
64
Someone gets your tax documents. If this person is not caught, you will likely be a victim of _
tax fraud
murder
identity theft
65
Municipal bonds are exempt from federal taxes and state taxes
True
False
66
The best way to investigate fraudulent transactions on your credit card is to:
Keep a copy of your bank statements in a safer place
Review your recent credit card statement
Keep track of your monthly budget
Review all old bank statements
67
What is the safest way to dispose of old bank account statements?
Keep them bundled together in a folder
Throw them out in trash
Put them in the trash unopened
Shred them in a paper shredder
68
An investment portfolio should always be diverse.
False
True
69
What is a cashier's check?
A check you receive from your friend out of their checkbook
A check guaranteed by the bank that writes the check
A check you write to the bank
70
When you purchase a municipal bond, you are:
investing in a index fund
loaning money to a municipality
diversifying your portfolio
71
Insurance can help you:
protect against unexpected accidents
reduce the chances of getting into accident
minimize monthly expenses
cover all out of pocket costs
72
Which of the following is an advantage of federal student loans?
federal student loans do not accumulate interest
federal student loans have a fixed rate
federal student loans must be paid back while in school
73
Which are the correct orders of investments from Lowest risk to Highest risk?
Treasury bond−Diversified mutual fund–Stock
Treasury bond−Stock−Diversified mutual fund
Stock−Treasury bond−Diversified mutual fund
Diversified mutual fund−Treasury bond−Stock
74
What is the best form of payment for a part-time employee at Best Buy?
Wages
Tip
Commission
Salary
