Financial Literacy WISE/Semeter Test Review

Question 1

All of the following could help an individual establish good credit except:

Accepted Answer

Using one credit card to pay off another

Question 2

To bring a bank statement and your record (check register) into agreement is to __ your account

Accepted Answer

reconcile

Question 3

Which of the cash management tool is the liquid?

Accepted Answer

Checking account

Question 4

What is the first step that should be completed when creating a spending plan?

Accepted Answer

Track current income and expenses

Question 5

Diversification means to:

Accepted Answer

Spread your money among different savings and investments

Question 6

Withdraw money from a certificate of deposit (CD) before the maturity date, you are charged:

Accepted Answer

penalty

Question 7

If you work for a company you are considered a/an ___ of the company.

Accepted Answer

employee

Question 8

What does "Pay Yourself First" mean?

Accepted Answer

Consider savings to be a fixed expense, coming out first

Question 9

According to the Federal Truth in Lending Act, where must the terms of credit cards be posted?

Accepted Answer

In the Schumer Box

Question 10

References are

Accepted Answer

individuals that provide info about applicant's character

Question 11

A credit card is ____ credit.

Accepted Answer

open ended

Question 12

A co-signer is a person who

Accepted Answer

promises to repay a note if the loan holder fails to pay

Question 13

Housing is on average the highest expense. An individual should not go over __ of their income.

Accepted Answer

30%

Question 14

A formal meeting that is used by an employer to assess the qualification of an applicant is:

Accepted Answer

an interview

Question 15

In the future, a dollar will be worth ___ due to inflation.

Accepted Answer

less than a dollar today

Question 16

An individual's financial plan will vary depending upon one's

Accepted Answer

all of the above

Question 17

A person named in a life insurance policy to receive the money once the policy holder dies:

Accepted Answer

Beneficiary

Question 18

Checks issued by a depositor but not yet reported on a bank statement are considered a/an

Accepted Answer

outstanding check

Question 19

When investing, it is best to

Accepted Answer

start early

Question 20

The practice of working at home by using a computer, rather than commuting to work.

Accepted Answer

telecommuting

Question 21

What is the process of earning interest on interest called?

Accepted Answer

Compounding

Question 22

Money earned by the hour is

Accepted Answer

wage

Question 23

What does the 70-20-10 rule represent?

Accepted Answer

70% of income is spent, 20% of income saved, 10% invested

Question 24

A card that automatically deducts money from checking account when it is used for a purchase

Accepted Answer

debit card

Question 25

Money earned annually on a fixed basis.

Accepted Answer

Salary

Question 26

The "Rule of 72" is useful in calculating the:

Accepted Answer

time required to double an investment

Question 27

A legal action which requires a portion of a person's income be withheld from their paycheck.

Accepted Answer

Garnishment

Question 28

U.S. currency is known as ____ money because it is only backed by the gov'ts promise.

Accepted Answer

fiat

Question 29

When may a person view his/her credit report for free?

Accepted Answer

Once a year, from each of the 3 credit reporting agencies

Question 30

What expenditure if the largest portion of one's income on average?

Accepted Answer

Housing

Question 31

The simple form to figure your annual income tax return if you are single w/ no dependents

Accepted Answer

1040EZ

Question 32

Which of the following investments have the highest risk?

Accepted Answer

Stocks

Question 33

A summary of your qualifications for a job is a/an:

Accepted Answer

resume

Question 34

Which federal department oversees the 12 federal banks that are located across the U.S.?

Accepted Answer

Federal Reserve

Question 35

Assets (what you own) minus your debts (what you owe) is:

Accepted Answer

Net worth

Question 36

When reviewing a credit card bill, which amount must be paid each month?

Accepted Answer

Minimum payment due

Question 37

The price of borrowing money is:

Accepted Answer

interest

Question 38

The speed and ease you can turn your investment into cash refers to

Accepted Answer

liquidity

Question 39

Which of the following types of investments has the lowest risk and lowest rate of return?

Accepted Answer

Savings bonds

Question 40

What category is NOT included when determining an individual's credit score?

Accepted Answer

Net worth

Question 41

Referring to debt, what does the 20-10 rule represent?

Accepted Answer

Do not go over 20% of total income in debt or 10% of monthly

Question 42

Which investment is automatically diversified?

Accepted Answer

Mutual Fund

Question 43

Employee benefits typically cost an employer what percentage of your pay?

Accepted Answer

between 20% and 50%

Question 44

An liability policy has a quote of 25/50/10 limit. This means:

Accepted Answer

$25000 per person, $50000 per accident, $10000 per acc.

Question 45

Who should purchase life insurance?

Accepted Answer

Someone that has dependents

Question 46

How does a credit score financially affect an individual?

Accepted Answer

The interest rate of loans

Question 47

What does Social Security fund?

Accepted Answer

Retire program for the nation's elderly

Question 48

What type of insurance covers the contents of an apartment?

Accepted Answer

Renter's

Question 49

What are the benefits of insurance?

Accepted Answer

All of the above

Question 50

An entrepreneur is

Accepted Answer

a person who owns and runs his/her own business

Question 51

The original amount of money invested or saved is the

Accepted Answer

principal

Question 52

The lack of sufficient funds to cover the full amount of a check is a/an

Accepted Answer

overdraft

Question 53

What do financial experts recommend an individual's have for emergencies in a savings account?

Accepted Answer

3-6 months of expenses

Question 54

Which of the following is NOT considered when analyzing a person's creditworthiness?

Accepted Answer

Ethnicity

Question 55

A loan for a specific amount that must be repaid in full by a specific date is a/an

Accepted Answer

close ended loan

Question 56

An entrepreneur should be a hard worker and self motivated. They should also be:

Accepted Answer

risk-taker

Question 57

What factors affect the Time Value of Money?

Accepted Answer

All of the above

Financial Literacy WISE/Semeter Test Review

Questions 57

Financial Literacy WISE/Semeter Test Review

Questions 57