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Financial Literacy review Flashcards | StudBud
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Financial Literacy review
Financial Literacy review
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1
Ruby asks her friends, should I start doing mobile banking now that I have a smart phone? Which friend is correct?
once you set up mobile banking you can't use any other banking
convenient, you can deposit your check using your phone's camera
a con is banks charge you $10-$15 to set up mobile banking
normal fees like overdraft fees, atm fees are waived
2
Chris buys a new hat from a store at the mall, which payment would reduce the amount in his checking account?
uses his credit card and says credit when the cashier asks credit or debit?
Uses his debit card and says credit when the cashier asks credit or debit?
pays with a prepaid card he loaded earlier in the month
pays with cash he had in his wallet
3
A major difference between a 401(k) and a Rother IRA is that...
a 401k is guaranteed to give a better return than a Roth IRA
A 401k you sign up for on your own; a Roth IRA is offered by your employer
401k give you more flexibility in how you can use your money than Roth IRA
A 401(k) uses pre-tax money, a Roth IRA uses post-tax money
4
Mike is opening a checking account, trying to decide whether he should sign up for overdraft protection, who is correct?
Overdraftprotection can help if you don't have funds for gas to get to work
if you don't get overdraft protection you can't withdraw more than you have
overdraft protection means you don't keep track of your account
still owe a fee for overdraft but don't have to pay back money spent
5
Who is saving rather than investing from this list
David who contributes 2% of his pay to his company's 401k
Abby who puts 850 per month in savings and earns 1% interest
Jennifer who uses her $300 end of year bonus to buy treasury bonds
Alexis who buys $200 worth of shares in an S&P 500 index fund every month
6
If you set aside $200 and didn't need access for a few years and wanted the highest interest rate which account is best?
certificate of deposit
Online savings account
checking account
traditional savings account
7
Which definition best describes the FAFSA?
paperwork you complete to have your student loan debt forgiven
the amount of money the federal government offers you in student loans
paperwork your bank has you complete to take out a personal student loan
you complete in order to determine amount you get in federal student aid
8
Why is important to start investing for retirement at an early age?
As you get older, firms offer you fewer funds to invest in
You money has more time to grow
The younger you are when you start the lower your fees
your money has more time to grow
9
Joshua is trying to save up an emergency fund of $2500, which strategy would be most effective in meeting his goal?
after rent student loan credit card utilities & groceries put some away
at the end of the month put left over money from checking into savings
direct deposit of $100 from each paycheck to go automatically to savings
after all credit card & student loan debt are paid and then start savings
10
$2500 pay, $1000 for rent, $600 for car, $200 insurance, $150 utilities, student loan $300, dining out $300 what's left?
A budget deficit of $50
a total budget of $5050
break even at $0
a budget surplus of 50
