What does median household income represent in the U.S.?

income of the middle household when all U.S. households are ranked

What is the 50/30/20 rule?

50% needs, 30% wants, 20% savings

Why is it important to have family health insurance coverage?

ensures all family have access to medical care without financial burden

Based on payment history, we can assume that...

late payments have a negative affect on credit score

What role does government regulation play in personal finance management?

provides guidelines and oversight

What is the relationship between financial stability and charitable giving?

charitable giving can be done while maintaining financial stability

What is the relationship between insurance and an investment?

insurance can diversify your portfolio

something someone would like to have but does not need to survive

How is wealth calculated?

subtracting one's debt from their assets

What is the main difference between avalanche and snowball methods?

the order in which debts are paid off

Obtaining an unsubsidized loan means

you will be responsible for all the interest on your loan

The purpose of The Consumer Product Safety Act is to...

Ensure product safety and protect consumers from unreasonable risks

What is the purpose of insurance?

to provide protection against the chance of losses

How is compound interest different from simple interest?

compoundinterest uses the interest earned on both principle and accumulated

Which of the following is true regarding membership requirements for banks and credit unions?

credit unions have strict requirements while banks are open to anyone

Good rule of thumb for credit card usage to maintain a healthy credit score...

not exceeding 30% of the credit limit on a credit card

Which of the following is a responsibility of buyers in transactions?

honoring the agreed-upon terms of sale

How is compound interest calculated?

based on the principal balance plus any outstanding interest accrued

What is the consequence of financial illiteracy?

increased chances of personal economic distress

Why should you include a balance of saving and investing strategies?

to diversify for short and long term goals

What's the key difference between banks and credit unions?

banks are for-profit while credit unions are not-for-profit

What should you do if you suspect you are a victim of identity theft?

take immediate action to report identity theft

What is a right of buyers in a transaction?

returning a defective product for a refund

Which of the following is a method to protect your credit?

reviewing your credit reports regularly

Incorporating a savings plan in financial plannings allows

having readily available cash for short term goals and emergencies

Which of the following is a characteristic of variable expense?

they can vary in amount from month to month

What is the role of insurance in financial planning?

to provide a safety net for worst case scenarios

What are tax brackets used for?

calculating your federal income taxes

How doe the marginal tax rate work in tax brackets?

it increases as income increases

What is the main purpose of the NASDAQ Global Financial Crime Report?

to provide insights into financial crime trends

Which component determines if you can handle what you owe?

amounts owed or credit utilization

Which of the following is a responsibility of sellers to maintain in a transaction?

transparency about defects in the product

How might lowering interest rates affect personal financial choices?

encourage individuals to borrow more

Why is FDIC insurance important for depositors in bank?

to protect their deposits in case the bank fails

What is a common right of sellers in a transaction?

receiving payment for the product

Relationship between credit score and interest rate, which of the following is true?

high credit score means lower interest rates

Why is it important to understand how tax brackets work?

to accurately calculate your tax bill

studbud

Financial Literacy Final Review (LinkIt)

54 termsStudBud Administration118 plays

Imported from external platform

Flashcards54 cardsFPractice quizPHost liveL

Questions 54

Answers

1
What does median household income represent in the U.S.?
total income of all U.S. households
average income of all U.S. households
income of only the wealthiest U.S. households
income of the middle household when all U.S. households are ranked
2
What is the 50/30/20 rule?
50% savings, 30% wants, 20% needs
50% savings, 30% needs, 20% wants
50% wants, 30% savings, 20% needs
50% needs, 30% wants, 20% savings
3
Why is it important to have family health insurance coverage?
individual plans provide more comprehensive coverage
ensures all family have access to medical care without financial burden
offer lower premiums compared to individual plans
limit the number of healthcare providers available
4
Which act promotes fair competition and prohibits monopolies that may harm consumers?
Fair Credit Reporting Act
Consumer Product Safety Act
Sherman Antitrust Act
Truth in Lending Act
5
Based on payment history, we can assume that...
being a few days late will have no impact on credit score
credit score will remain the same because all payments are on time
late payments have a negative affect on credit score
credit score will remain the same regardless of payment history
6
What role does government regulation play in personal finance management?
provides guidelines and oversight
no role in monitoring financial activities
restricts individuals from making financial decisions
only applies to wealthy individuals
7
What is the relationship between financial stability and charitable giving?
charitable giving is only for the wealthy
charitable giving can be done while maintaining financial stability
charitable giving is unrelated to financial stability
charitable giving leads to financial instability
8
What is the relationship between insurance and an investment?
insurance increases taxes
insurance has no impact on portfolio diversification
insurance can reduce portfolio diversification
insurance can diversify your portfolio
9
What is the main advantage of Federal Student Loans over Private Student Loans?
variable interest rates
lower interest rates
payments are required while in school
no credit check
10
What is a want?
an expense
something important to an individual
something someone would like to have but does not need to survive
something essential for living
11
How is wealth calculated?
the total amount of one's debts and assets
wealth is the total of one's lifetime earnings
subtracting one's debt from their assets
subtracting one's earnings from their total value of assets
12
How does lower credit score impact interest rate on a mortgage?
it increases the interest rate
it depends on the lender
it decreases the interest rate
it does not affect the interst rate
13
Which of the following services can assist in achieving long term goals?
applying for short-term loans
opening a retirement account
making daily purchases online
renting a safety deposit box
14
What is the main difference between avalanche and snowball methods?
the interest rates of the debts
the order in which debts are paid off
the total amount of debt paid off
the number of debts being paid off
15
Obtaining an unsubsidized loan means
you will be responsible for all the interest on your loan
the government pays the interest while you're in school
the interest on the loan does not need to be paid
none of the above
16
The purpose of The Consumer Product Safety Act is to...
Regulate advertising practices
Ensure product safety and protect consumers from unreasonable risks
monitor credit reporting agencies
prevent unfair business practices
17
What is the purpose of insurance?
to provide the opportunity to compound your money
to provide financial security in retirement
to provide protection against the chance of losses
the provide an insured savings account to pay for medical expenses
18
How is compound interest different from simple interest?
simple interest is more favorable for long-term investments
Simple interest grows at an accelerating rate
compound interest is calculated on principle amount only
compoundinterest uses the interest earned on both principle and accumulated
19
Which of the following is true regarding membership requirements for banks and credit unions?
both have the same requirements
credit unions have strict requirements while banks are open to anyone
banks have strict requirements while credit unions are open to anyone
neither banks nor credit
20
Good rule of thumb for credit card usage to maintain a healthy credit score...
keeping outstanding balances as high as possible
not exceeding 30% of the credit limit on a credit card
Exceeding 30% of the credit limit on a credit card
avoiding paying down installment loans
21
Which law requires lenders to disclose the terms of a loan to borrowers?
Federal Trade Commission Act
Fair Credit Reporting Act
Sherman Antitrust Act
Truth in Lending Act
22
Which law protects consumers from unfair or deceptive practices in the marketplace?
Consumer Product Safety Act
Truth in Lending Act
Federal Trade Commission Act
Sherman Antitrust Act
23
Which of the following is a responsibility of buyers in transactions?
providing accurate information about the product
honoring the agreed-upon terms of sale
ensuring the product meets safety standards
negotiating a fair price
24
In the avalanche method, which debt is paid off first?
largest balance
smallest balance
balance with the highest APR
balance with the lowest APR
25
How is compound interest calculated?
by multiplying the principal amount by a fixed percentage
based on the principal balance plus any outstanding interest accrued
Calculated by using only the principle balance of the loan
dividing the total interest by the number of compounding periods
26
What is the consequence of financial illiteracy?
decreased chances of personal economic distress
higher savings rate
improved financial decision making
increased chances of personal economic distress
27
Which financial planning says you should consider changing circumstances and adjust accordingly?
invest early
reassess risk
plan proactively
consult regularly
28
Why should you include a balance of saving and investing strategies?
to capitalize on compound interest
to focus solely on the long-term
to diversify for short and long term goals
to prepare for emergencies
29
What's the key difference between banks and credit unions?
banks are for-profit while credit unions are not-for-profit
credit unions are larger than banks
banks offer higher interest rates on savings accounts
credit unions are not insured by the government
30
What should you do if you suspect you are a victim of identity theft?
keep quiet and ignore suspicious activities
take immediate action to report identity theft
share personal info with classmates seeking advice
continue using your compromised accounts
31
What is a right of buyers in a transaction?
failing to pay for the purchased product
Accepting a product that does not match the description
changing the price after an agreement is reached
returning a defective product for a refund
32
Which of the following is a method to protect your credit?
ignoring suspcious activity on your bank statements
sharing your social security number with friends
reviewing your credit reports regularly
using the same password on all accounts
33
Which insurance coverage is used for the elderly?
Indian Health Service
medicaid
Children's Health Insurance Program
medicare
34
Incorporating a savings plan in financial plannings allows
accumulating wealth for retirement
diversifying your portfolio of stocks, bonds, funds
capitalizing on higher annual returns
having readily available cash for short term goals and emergencies
35
When creating a budget, all of the following impact long term goals EXCEPT
managing student loans
saving for college
buying dinner
planning future expenses
36
Which of the following is a characteristic of variable expense?
they are essential for daily living
they are affected by external factors
they remain constant and do not change
they can vary in amount from month to month
37
Which economic system is based on private ownership and the individual pursuit of wealth?
mercantilism
socialism
capitalism
communism
38
What is the role of insurance in financial planning?
to diversify your portfolio
to increase tax burden
to eliminate the need for monitoring
to provide a safety net for worst case scenarios
39
What are tax brackets used for?
estimating your state income tax
calculating your federal income taxes
determining your total income
calculating your sales tax
40
According to research, what is highlighted as a significant factor besides arithmetic in financial behaviors?
historical facts
exclusion from society
emotions and beliefs
math skills only
41
How doe the marginal tax rate work in tax brackets?
it increases as income increases
it only applies to the highest income level
in decreases as income increases
it stays the same for all income levels
42
What is the main purpose of the NASDAQ Global Financial Crime Report?
to provide insights into financial crime trends
to promote financial crimes
to encourage regulatory vilolations
to ignore cybersecurity measures
43
Which component determines if you can handle what you owe?
type of credit
length of credit history
new credit
amounts owed or credit utilization
44
Which of the following is a responsibility of sellers to maintain in a transaction?
ignoring consumer complaints
transparency about defects in the product
providing inaccurate product description
delaying the delivery of the product
45
How might lowering interest rates affect personal financial choices?
make saving money more attractive
encourage individuals to borrow more
increase investment risks
no impact on borrowing or saving decision
46
Which of the following is NOT a consumer protection law related to buyers and sellers?
Sherman Antitrust Act
Truth in Lending Act
Fair Credit Reporting Act
Consumer Product Safety Act
47
Why is FDIC insurance important for depositors in bank?
to invest in the stock market
to protect their deposits in case the bank fails
to have access to exclusive banking services
to earn higher interest rates
48
What positively affects credit score regarding payment history?
paying back debts on time
frequently exceeding the credit limit on credit cards
having a history of missed payments
making late payments consistently
49
What is a common right of sellers in a transaction?
changing the price after an agreement is reached
refusing to disclose potential defects in the product
receiving payment for the product
modifying the product after purchase
50
Relationship between credit score and interest rate, which of the following is true?
Lower credit score means lower interest rates
no pattern between the two
lenders do not consider credit score with interest rates
high credit score means lower interest rates
51
Why is it important to understand how tax brackets work?
to avoid paying any taxes
to accurately calculate your tax bill
to decrease your taxable income
to increase your tax rates
52
How does capitalism relate to building personal wealth?
by emphasizing collective ownership of resources
by relying on government control of the economy
By allowing individuals to own property and businesses
by redistributing wealth equally among all citizens
53
Which of the following is an investment option that provides a goal of income with growth potential?
savings account
dividend-producing stocks
collectible items
real estate properties
54
Why is it important to continually monitor insurance as part of financial planning?
to ensure insurance remains
to increase tax burden
to eliminate the need for financial planning
to reduce portfolio diversification

Financial Literacy Final Review (LinkIt) Flashcards | StudBud