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