What is the first step to take if dissatisfied with a good or service you purchased?

Contact the seller and try to resolve the problem.

Which is a recommended procedure to safeguard personal information?

Change passwords of important accounts frequently.

How is leasing a vehicle different from purchasing a vehicle?

With leasing you are renting the vehicle not buying it.

Which is true when it comes to using your Social Security number?

It should not be printed on checks or used as a username.

Which is the best definition of credit?

An agreement to receive goods or services now and pay at a later date.

Which is a responsibility that comes with renting?

paying rent for the duration of the lease

Why do websites track your online activity?

They can use the information to send you targeted ads.

What is true when it comes to unit pricing of products?

The unit price is usually posted on the store shelf beneath the product.

Why is it important to build a good credit score before shopping for a house?

You will need a good credit score in order to obtain a mortgage.

Why is it important to plan early for your retirement?

In order to take advantage of the power of compounding.

Why is it important to have health insurance?

You are open to significant financial risk without it.

Which best explains what a full warranty covers?

If a product fails due to a manufacturing defect it's repaired or replaced.

When should a consumer file a fraud alert with the credit bureaus?

Any time they suspect they have been a victim of identity theft.

In which situation would an employer be required to pay overtime?

An hourly employee works 48 hours in one week.

Which best describes net pay?

The pay the employee receives or has deposited to their account.

Which is true of the credit card grace period?

If the balance paid in full by the monthly due date interest doesn't accrue

Leases typically contain all of the following EXCEPT

price if the tenant wishes to purchase the property.

Which would be the best use of your emergency fund?

Paying for an expensive car repair not covered under warranty.

Which is usually true of employer sponsored health insurance plans?

The employee is expected to pay for part of the insurance premium.

Which is a disadvantage of being a salaried employee?

Overtime is rarely paid for working over 40 hours a week.

What is the opportunity cost of purchasing a new video game console?

What you would purchase with the money instead.

Leasing a vehicle is most likely to be better than buying for someone who

plans to get a new vehicle every two or three years.

What is the greatest advantage of a defined benefit pension plan for the employee?

Defined benefit plans make retirement planning easier.

What type of identity theft does “phishing” refer to?

Posing as a credit card company or bank to steal your identity.

Should a person include “wants” when creating a budget?

Yes, a budget should be realistic and include things that make us happy.

Which is true of big box retailers?

They offer a wide variety of products.

Besides your credit card company, who else should you report the identity theft and credit theft to?

the Federal Trade Commission www.IdentityTheft.gov

Should you have your paycheck directly deposited to your financial institution if your employer provides that option?

Yes, it is convenient, you will have access to your money the day deposited

Why is it necessary to regularly review and revise your budget?

Life changes will require changes to your financial plan.

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Final Exam Review Game Part 1

84 termsStudBud Administration139 plays

Review for Financial Literacy Final Exam.

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Questions 84

Answers

1
What is the first step to take if dissatisfied with a good or service you purchased?
Fill out a questionnaire at the Consumer Financial Protection Bureau.
Notify the Better Business Bureau of your complaint.
File a complaint with the appropriate state licensing agency.
Contact the seller and try to resolve the problem.
2
Which is not a factor that insurers typically consider when determining how much to charge for life insurance?
smoking
income
gender
occupation
3
Which is a recommended procedure to safeguard personal information?
Use the same username for all financial accounts to prevent errors.
Review financial statements for errors yearly.
Open email attachments before responding to make sure the sender is legit.
Change passwords of important accounts frequently.
4
Which benefit typically costs an employer the most to provide to their employees?
week paid vacation
four days of paid sick leave
health insurance
$50,000 term life insurance
5
Which is not one of the three major credit reporting agencies?
Wells Fargo
Equifax
Experian
Trans Union
6
How is leasing a vehicle different from purchasing a vehicle?
With leasing you build equity in the vehicle.
With leasing you do not have to pay taxes and fees.
With leasing there is no negotiation of the price.
With leasing you are renting the vehicle not buying it.
7
You get a new job, and you have money in your previous employer’s 401(k) plan. Which is the best option for most people?
leave it in the account
roll the money over
cash out the account
convert it to a savings bond
8
Which is true when it comes to using your Social Security number?
It should be carried in your wallet or purse as a form of ID.
It should not be printed on checks or used as a username.
The last four digits are an acceptable PIN for most accounts.
Medical providers require them before surgery or procedures.
9
Which is NOT a typical fee financial institutions charge?
account maintenance fee
non-sufficient fund fee
direct deposit fee
overdraft fee
10
Which is NOT one of the “5 Cs of Credit?
capital
capacity
collateral
consumer
11
Which is the best definition of credit?
An agreement to receive goods or services now and pay at a later date.
An agreement to forsake payment now in order to receive more in the future.
An agreement to make regular payments including interest.
An agreement to accept terms of payment over time with interest.
12
Which is a responsibility that comes with renting?
finding a new tenant when you move out
doing maintenance and repairs
paying the property taxes
paying rent for the duration of the lease
13
Why do websites track your online activity?
They can use it to identify false or deceptive websites.
It allows them to fine tune your internet connection.
It allows them to protect you against phishing attacks.
They can use the information to send you targeted ads.
14
What would a FICO score of 810 be considered?
very poor
fair
good
excellent
15
How old are most Medicare recipients?
65 and older
18-39
40-64
under 18
16
What is true when it comes to unit pricing of products?
The smallest container of a product has the lowest unit price.
The unit price is the same regardless of the quantity purchased.
The unit price is usually posted on the store shelf beneath the product.
The largest container of a product has the lowest unit price.
17
According to many financial planners, what is the most you should spend on rent?
60% of gross income
15% of gross income
30% of gross income
45% of gross income
18
Why is it important to build a good credit score before shopping for a house?
You will need a good credit score in order to obtain a mortgage.
The higher your credit score, the higher the interest rate you’ll pay.
Sellers will ask for your credit score before allowing you to see a house.
Most states require a minimum credit score in order to purchase a house.
19
Which is true about purchasing a product from an on-line seller?
It is very convenient.
It is guaranteed to be genuine.
It will be the lowest price.
It comes with free shipping.
20
Why is it important to plan early for your retirement?
That way you can choose the right major in college.
Taxes on retirement investments increase as you get older.
Planning early will allow you to invest in new companies.
In order to take advantage of the power of compounding.
21
Why is it important to have health insurance?
You are open to significant financial risk without it.
The law requires that all people have it.
You cannot obtain medical treatment without it.
The best jobs provide it as an employee benefit.
22
Which is a need?
a good restaurant meal
an inexpensive vacation
a safe place to live
a new smartphone
23
Which best explains what a full warranty covers?
If a product fails for any reason replacement parts will be provided.
The product is guaranteed to function for the purpose it was advertised.
If a product is accidentally broken or damaged it'll be repaired/ replaced.
If a product fails due to a manufacturing defect it's repaired or replaced.
24
If J wasn’t saving his paycheck for college,he would use it to buy a used car. What concept does the used car represent?
opportunity cost
expense ratio
caveat emptor
compound interest
25
What is typically the minimum down payment required to avoid having to purchase private mortgage insurance?
3%
5%
10%
20%
26
When should a consumer file a fraud alert with the credit bureaus?
Any time they suspect they have been a victim of identity theft.
If a resulting investigation showed the theft actually took place.
Only if the identity theft involved credit cards or loan accounts.
When the Consumer Financial Protection Bureau recommends it.
27
In which situation would an employer be required to pay overtime?
An hourly employee works a 12 hour shift.
A salaried employee works on a Saturday.
A salaried employee works on a holiday.
An hourly employee works 48 hours in one week.
28
Which best describes net pay?
The pay before any type of withholding is taken out.
The value of all compensation including any fringe benefits and bonus pay.
The pay after mandatory withholding but before voluntary withholding.
The pay the employee receives or has deposited to their account.
29
Which is a variable expense?
internet service
cell phone bill
entertainment
rent
30
Which is true of the credit card grace period?
Department store and gas credit cards have grace periods, bank cards don't.
Interest accrues only after the due date and only any outstanding balance.
As long as the cardholder makes the minimum payment,no interest will accrue
If the balance paid in full by the monthly due date interest doesn't accrue
31
Which is a government sponsored retirement plan?
403(b) plan
defined contribution plan
social security
457 plan
32
Which is an example of a secured loan?
student loan
personal loan
credit card
vehicle loan
33
Which type of mortgage has a payment that remains the same until it is paid off?
adjustable rate
amortization schedule
conventional
balloon
34
Leases typically contain all of the following EXCEPT
price if the tenant wishes to purchase the property.
charges to the tenant for late payment of rent or damages.
list of restrictions and prohibited activities.
dates the lease begins and ends.
35
Which would be the best use of your emergency fund?
Paying for a vacation you have been planning for many years.
Paying into an individual retirement account to invest in stocks.
Paying for an expensive car repair not covered under warranty.
Paying the monthly cable television and internet service bill.
36
Which is usually true of employer sponsored health insurance plans?
The law requires all employers to provide them to all their employees.
The employee is given a subsidy to purchase a policy on an exchange.
The value of the plan is typically less than one thousand dollars.
The employee is expected to pay for part of the insurance premium.
37
Which is a disadvantage of being a salaried employee?
Pay varies from week to week making budgeting difficult.
Fringe benefits such as health insurance are rarely provided.
Employers may reduce the rate of pay without notice.
Overtime is rarely paid for working over 40 hours a week.
38
What is the opportunity cost of purchasing a new video game console?
The amount of work it took to buy it.
What you would purchase with the money instead.
The time you spend playing it.
Any future expenses for games or accessories.
39
Leasing a vehicle is most likely to be better than buying for someone who
prefers to drive an imported car instead of a domestic.
plans to get a new vehicle every two or three years.
intends to put a lot of miles on the vehicle.
wants to build equity in the vehicle while owning it.
40
What is the greatest advantage of a defined benefit pension plan for the employee?
The employee can contribute as much or as little as they want.
Defined benefit plans offer coverage for all family members.
The employee can select the investments they want.
Defined benefit plans make retirement planning easier.
41
Which method of purchase will offer the buyer the greatest protection if there is a problem?
e-payment service
check
cash
credit card
42
Which makes up the largest percentage of your FICO score?
credit utilization
new credit
length of credit
payment history
43
When can you find the lowest prices on seasonal merchandise?
the season does not affect price
after the season
just before the season
during the season
44
What type of identity theft does “phishing” refer to?
Stealing credit card information from a customer in a restaurant or bar.
Posing as a credit card company or bank to steal your identity.
Stealing DOB and family information from Facebook and social media posts.
Finding personal information in trash that can be used for identity theft.
45
Which is an advantage mutual or exchange traded funds have over individual stocks when investing for retirement?
dividend yield
price appreciation
tax advantaged
diversification
46
Should a person include “wants” when creating a budget?
No, budgeting is really about making sure your needs are met.
Yes, a budget should be realistic and include things that make us happy.
No, it will be difficult to balance a budget that includes wants and needs.
Yes,most people can obtain all their wants and needs ifthey just planahead.
47
Which is an optional fee many dealers charge on a new vehicle sale?
destination charge
registration fee
document fee
sales tax
48
Which is true of big box retailers?
They offer a wide variety of products.
They have highly knowledgeable salespeople.
They carry the most exclusive brands.
They service the products they sell.
49
Besides your credit card company, who else should you report the identity theft and credit theft to?
the Federal Trade Commission www.IdentityTheft.gov
your local police department
the Federal Bureau of Investigation (FBI)
the Consumer Financial Protection Bureau www.cfpb.gov
50
Should you have your paycheck directly deposited to your financial institution if your employer provides that option?
Yes, it is convenient, you will have access to your money the day deposited
No, most banks charge an additional fee for accepting deposits directly.
No, direct deposits typically take a week before you can access your money.
Yes, funds directly deposited earn additional interest and earn bonuses.
51
Why is it necessary to regularly review and revise your budget?
Fixed expenses will vary significantly from month to month.
Life changes will require changes to your financial plan.
Most households earn less income as time goes on.
Budgets do not take into consideration variable expenses.
52
Which is a benefit of debit cards?
They are never charged fees at automated teller machines.
They provide an extended warranty on any goods purchased.
They allow you to make a purchase now and deposit funds later.
They can be used to purchase goods and services online.
53
Which is true of investing in United States government bonds?
They are considered a safe investment.
They are considered very risky.
They represent an ownership share.
They pay quarterly dividends.
54
Gross pay refers to
the amount of pay before any deductions or taxes are taken out
the amount of pay after involuntary deductions are taken out.
the amount of pay after voluntary deductions are taken out.
the amount of pay before voluntary deductions are taken out.
55
What is Workers’ Compensation?
A gov program that helps workers who suffer a disabling injury on the job.
A law requiring the gov to provide disability insurance to their workers.
Payments by insurance company when employees pay out-of-pocket expenses.
A law requiring employers to provide health insurance to workers.
56
Which is a consequence of making your credit card payment late?
Interest will be charged on the balance not paid on time.
You will lose any reward points or incentives accumulated.
Your credit score will immediately be reduced by 25 points.
The credit card issuer will begin steps to close the account.
57
Who is usually your best resource to assist during the home purchase process?
a lending officer
a mortgage broker
the owner of the property
a real estate agent
58
Erica’s employer offers to match her 401(k) contributions up to 4% of her pay. What should she do?
Wait until she has worked a year before deciding how much to contribute.
Avoid making 401(k)contributions because it'll increase her taxable income.
Contribute only if she is exempt from withholding for Social Security.
Contribute at least 4% of her pay take advantage of the full employer match
59
An advantage of direct deposit for the employee is that
it is easier to find any employer errors in calculating pay.
funds are available to use at the earliest possible date.
money stays in the employer’s bank account longer.
it prevents you from knowing what other employees make.
60
Which is generally true about the cost of vehicle insurance?
The more expensive the vehicle the more it costs to insure.
The cost of insurance is included in the price of the vehicle.
The majority of states do not require owners to carry insurance.
The national average for an annual premium is about $400.
61
Which is an example of a revolving loan?
student loan
vehicle loan
credit card
mortgage
62
What type of insurance combines life insurance with a savings account?
group life insurance
term life insurance
whole life insurance
credit life insurance
63
What form does an employee use to determine how much should be withheld from their pay for income taxes?
W-4
401(k)
HSA
FICA
64
Which is the best strategy to avoid late fees and negative impacts to your credit score?
Have bills automatically paid from a bank account.
Consider the opportunity cost of financial decisions.
Purchase insurance for your valuable possessions.
Protect your personal data from identity theft.
65
Which is a benefit of using e funds transfers (EFTs) to automatically pay a recurring bill such as student loan payment?
Paying automatically with an EFT means the payment is less likely be missed
Payments made with an EFT are held until after you have funds to make it.
EFTs include automatic overdraft protection for payments as added benefit.
EFTs return a percentage of the charge back to the account holder a reward
66
What is the best way to defend against fraudulent charges to your credit card?
Only use your credit card for local transactions.
Pay additional for optional fraud monitoring.
Review your credit card statement every month.
Set up an account to automatically pay your monthly bill.
67
Which is a voluntary deduction from pay?
Social Security
Health Savings Account
state income tax
federal income tax
68
Which would be an example of a fixed expense?
fixing a broken refrigerator
paying your auto loan bill
replacing worn out clothing
buying groceries at the store
69
A person who has a high credit score will
not need a down payment for a home mortgage.
pay a higher interest rate on consumer loans.
have more difficulty getting a credit card.
pay less for credit than those with lower scores.
70
Which is a sign that identity theft has taken place?
Receiving suspicious emails asking for your personal information.
Getting notification that the interest rate on a credit card is increasing.
An account statement billing you for items you didn’t purchase.
Receiving an offer to apply for a new credit card that you did not request.
71
Why is diversification important in an investment portfolio?
It reduces the overall risk of the portfolio.
It increases the return on investment.
It results in a lower investor tax rate.
It reduces the expense of managing the portfolio.
72
Which is not a common type of paid time off (PTO)?
holidays
paydays
vacation days
sick days
73
Which of the following expenses would be considered a “need” instead of a “want”?
replacing the ugly living room sofa
monthly electric and natural gas bill
dinner at a popular new restaurant
renewal of your fitness club membership
74
Why is it important to keep track of the credit utilization on your credit cards?
Higher credit utilization leads to lower incentives on reward cards.
As credit card utilization increases, annual percentage rates decrease.
Low credit card utilization results in higher interest rates being charged.
High credit card utilization can lead to a reduction in the credit score.
75
What is depreciation?
The amount of out-of-pocket costs for repairs.
The amount spent on routine maintenance.
The total premiums an owner pays for insurance.
How much value a vehicle loses over time.
76
Which is not one of the four pieces of information required for an identity thief to steal your identity?
date of birth
driver's license number
home address
Social Security Number
77
Which investment has both the highest potential risk and the highest potential reward?
common stocks
certificates of deposit
US government bonds
municipal bonds
78
Which is a financial advantage of renting versus buying?
The rental property will appreciate in value.
The monthly rent payment does not increase.
You will be able to build equity over time.
You need less money upfront to move-in.
79
Which type of depository institution is most likely to have hundreds of branches throughout the United States?
mutual savings bank
credit union
commercial bank
savings and loans
80
Which is a common characteristic of outlet stores?
highest prices
many exclusive brands
can repair product out of warranty
single brand of merchandise
81
Which type of housing is always a rental?
condominium
duplex
manufactured home
apartment
82
Which retirement plan provides no upfront tax benefit allows contributions and earnings taken tax free during retirement
Roth IRA
employer sponsored 403(b)
traditional IRA
employer sponsored 401(k)
83
Which is the best strategy to determine if you are on track to meet your financial goals?
Regularly review account balances,debt &credit card balances and net worth.
Analyze your spending and saving yearly when you complete your income taxes
Charge up to your credit limit on a credit card in order to get an increase
Compare your spending to your friends to determine who is doing better.
84
What is not a necessary step to take after using a public computer to transmit personal or financial information?
log-off the computer and out of any accounts
delete temporary internet files or cache
clear all browsing history
turn off the computer

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