stud
bud
Sign up
Log in
Home
Library
Explore
SAT
More
Wise Financial Literacy Practice Test Flashcards | StudBud
Explore
/
Wise Financial Literacy Practice Test
Wise Financial Literacy Practice Test
32 terms
·
StudBud Administration
·
472 plays
Imported from external platform
Flashcards
32 cards
F
Practice quiz
P
Host live
L
Questions
32
Answers
1
A person who wants to cash his paycheck is advised to go to his bank rather than to a check cashing store because
the check cashing stores charge high fees for their services
the check cashing store requires the person to have a co-signer
the check cashing store will not cash checks written for more than $100
the check cashing store have a 48-hour waiting period before they cash it
2
To determine the time value of depositing $100 in a savings account, a person needs to know the interest rate and
whether the bank offers overdraft protection
whether the account is FDIC protected
the rate of inflation
total income
3
If a person makes a deposit of $10,000 or more into a bank account, the bank must notify the
Federal Reserve Board
Federal Deposit Insurance Corporation (FDIC)
State Banking Commission
US Treasury Department
4
The financial planning process:
does not need to be revised for changing income and needs
needs to be adjusted for changing needs & goals in different stages of life
guarantees that assets will increase
includes lifetime goals
5
When a person declares bankruptcy that fact will appear on the person's credit report
until the person is able to receive a new credit card
until the person repays all debts owed
for a 3 year period
for a 10 year period
6
To qualify for a Federal Housing Administration (FHA) Loan, a person must generally
have one-quarter of the cost of the home for a down-payment
provide two individuals to co-sign the loan
fulfill income guidelines
have at least a high school diploma
7
Troy has $50 a month transferred electronically from his checking to his savings account- this is an example of
an ATM Transaction
savings plan
a debit card transaction
Installment payment
8
Which of the following provides an increase in assets or wealth?
Having capital gains
Running in a marathon
Taking out a loan
Volunteering at a hospital
9
True or False: In most cases, money you contributed to an IRA can be withdrawn tax and penalty free
True
False
10
Frankie earned money in the stock market and sold his shares for profit Does he have to pay taxes on his earnings?
Yes
No
11
When securities (stocks) are traded in the secondary market, who makes or loses money?
Small businesses
Creditors
The SEC
Investors
12
Margaret wants to store a valuable coin collection and important papers. Generally, consumers should:
Hand valuables over to their attorney
Store valuables in a cabinet at home
Store valuables in a locked drawer
Rent a safe deposit box for their valuables
13
If a person receives a salary raise of 3% and the rate of inflation is 5%, which statement is true?
The rate of inflation did not keep up with salary increases
The raise isn't enough for the person to buy as much as the previous year
The person who received the salary increase won't be affected by inflation
The rate of inflation is lower than it was the previous year
14
Which should be the first financial goal for a recent college graduate who is single and has a full time job?
Create a stock portfolio
Buy a life insurance policy
Have a three to six month emergency fund
Buy a house
15
A person's debt ratio shows the relationship between debt and net worth. The lower the ratio the
less liquid assets the person has
more liquid assets the person has
worse off financially the person is
better off financially the person is
16
A pharmacy is to drugs as the American Stock Exchange is to:
Interest
Mutual funds
Stock advisors
Securities (stocks)
17
The annual percentage rate (APR) is:
Always expressed in dollars
Required by the Securities and Exchange Commission
The true cost of credit that must be disclosed on a loan agreement
Required by the Comptroller of the Currency
18
A person complains about how expensive it is to be a cigarette smoker. One of the reasons cigarettes are so expensive is
the tobacco industry imports most of the tobacco
their cost is controlled by the Food and Drug Administration (FDA)
the government imposes an excise tax on them
the tobacco supply is controlled by the Federal Trade Commission (FTC)
19
Which type of financial institution usually pays the highest rate of interest on savings account balances?
Investment firm money market accounts
Savings and loan associations
Commercial banks
Credit unions
20
What is meant by an uncollateralized loan?
A loan not backed by a co-signer who agrees to cover the amount of the loan
A personal loan without assets to cover the loan amount
A loan taken on a life insurance policy
A home equity loan
21
Which of the following does the Federal Reserve use to regulate the nation's
MON
ey supply?
Regulations
Fiscal policy
Monetary policy
Proposing legislation
22
Which financial product typically pays the highest amount of interest?
Certificate of Deposit
money market account
Common stock
savings account
23
Which product is considered to be an investment?
A new car
A corporate bond
A certificate of deposit
An initial public offering of stock
24
Which of the following is considered to be open-end credit?
Mortgage
Car Loan
Department store charge cards/credit cards
Installment loans
25
A person who owns stocks decide to buy bonds and mutual funds in order to
diversify their investment portfolio
avoid paying taxes on capital gains
reduce her variable expenses
eliminate the need for retirement planning
26
The Truth in Lending Act of 1968 requires creditors to:
State the monthly finance charge and the APR on the monthly statement
Have a clean record of services to credit card holders
Adhere to federal fixed interest rates and state the monthly finance charge
Limit the amount of money charged for credit
27
If you are required to pay $500 of medical costs before the company will pay, this policy provision is the:
Premium
co-insurance clause
Major medical benefit
Annual deductible
28
An example of closed-end credit is a
mortgage
debit card
cash card
major credit card
29
A person is depositing $20 in cash and a check for $50. On the checking account deposit slip, the person should
indicate the amount of money that is currently in account to cover check
include the reason that both cash and a check are being deposited
indicate what bank issued the check that is being deposited
list the cash deposit separately from the check as well as the total
30
A person who is following the advice to "pay yourself first"
did not receive a salary increase to keep up with the cost of living
puts aside money for saving before spending money on entertainment
will be able to buy more goods and services this year
will have more money available for savings this year
31
Money in the United States includes
Checking account balances on which checks can be drawn
barter
diamonds
Gold
32
What is the largest equities (stock) market in the world?
Over the counter market
American Stock Exchange (AMEX)
New York Stock Exchange (NYSE)
NASDAQ market
