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