what are discretionary expenses?

A cost determined by personal wants that may be controlled

What is the primary function of insurance?

Pooling and sharing risk amount the insured

protection against losses or damages

what is a financial institution ?

organisations that offer financial services

Which of the following are fixed expenses?

rent, car payment and student loan payment

gross receipts minus business expenses and taxes

Money spent on wants and needs.

What is a variable expense?

expenses that change month to month

What role does insurance play in financial planning?

It guarantees that income and assets are protected

When considering a purchase, what factors should be prioritized?

Needs and cost associated with the item

What is financial profit?

Gross income greater than business expenses.

Direct deposit is beneficial because

You can split money into multiple accounts

debit is money from your bank. credit is borrowing money

Which is TRUE about Certificates of Deposit (CDs)?

The bank can loan out the $ in your CD, The bank pays you interest in return

An item that costs will appear periodically throughout the year

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Financial Literacy Review

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Questions 88

Answers

1
Which expense is "fixed"?
Gasoline
Car payment
Groceries
2
what are discretionary expenses?
A cost that you did not plan for
A cost that occurs regularly but may vary in amount
A cost that occurs regularly and doesn’t vary in amount
A cost determined by personal wants that may be controlled
3
Investing in stocks can cause you to:
Make money
Lose money
Both
4
What generally has the highest rate of return over long periods of time?
Bank Savings Accounts
Bonds
Stocks
Credit Cards
5
In business terms, Deposit means...
To leave an amount of something in an area over time
To put or leave (someone or something) in a particular place
Total amount of money in a bank account
Money paid into an account
6
Which of the following is NOT an example of a variable expense in a budget?
Clothes
A $60 internet bill
Groceries
Gas
7
What is an example of a need?
Starbucks
Nike Dunks
Concert Tickets
Electric Bill
8
What is the primary function of insurance?
Making risk disappear
Making someone else pay for your mistake
Pooling and sharing risk amount the insured
Pooling everyone's losses
9
Financial institutions
are non-profit organisations
are like charities
aim to make profit
are run by the governement
10
A medical check up is an example of a good.
False
True
11
Which insurance coverage is required by law?
Auto insurance
Homeowners insurance
Renters insurance
Disability insurance
12
Insurance is....
money spent on wants
protection against losses or damages
money spent on needs
changes from time to time
13
what is a financial institution ?
organisations that offer financial services
businesses that use money
14
Insurance is based on the concept of shared risk, or risk pooling.
False
True
15
During inflation, the dollar value?
Decreases
Stays steady
Increases
None of the above
16
Which of the following are fixed expenses?
clothes and food
rent car payment and gifts
rent, car payment and student loan payment
pet supplies, clothes and food
17
Which of these is a variable expense?
House Payment
Rent
Insurance
Electricity bill
18
financial profit
gross receipts minus salary draw
gross receipts minus business expenses and taxes
gross profit plus business expenses
salary draw minus taxes
19
An example of a discretionary expense is:
electric bill
rent
McDonald's
20
What is an example of a product?
Painting
Restaurant Meal
Vacation
Bank Loan
21
Credit vs Debit
Debit Card
Credit Card
22
Expenses means
The time when you start an activity.
Money spent on wants and needs.
A town in Connecticut
Helping other people
23
Which of the following are financial institutions?
museum
credit union
library
bank
24
What is a variable expense?
expenses that change month to month
expenses that stay the same and occur regularly
money you save
25
Taxes, fixed, variable, periodic, and discretionary → Periodic Expenses
True
False
26
What is an example of a want?
Electric Bill
House Payment
Gasoline
Concert Tickets
27
Where might you open an account, leave a deposit, or make a withdrawl?
Bank
University
Hairdresser
Manufacturing Plant
28
Two types of expenses are
Static and variable
fixed and fluctuating
fixed and variable
fixed and uncertain
29
What role does insurance play in financial planning?
It helps cover day-to-day expenses
It guarantees that income and assets are protected
It grows in value and appreciates over time
It helps build and maintain one's credit score
30
Need Vs. Want
want
need
31
What is an example of a fixed expense?
Amazon Prime subscription
sports
going to the movies
clothing
32
Stocks vs Bonds: which one is the safer investment?
bonds
stocks
33
When considering a purchase, what factors should be prioritized?
Appearance of Item
Brand of Item
Needs and cost associated with the item
Popularity of Item
34
a car is an example of a good.
False
True
35
careful with spending money
indifference
insincere
ambiguity
thrifty
36
Savings options (savings accounts, savings bonds, CD's) are
Very safe
Very risky
37
What is financial profit?
Net income greater than business expenses.
Net income less than business expenses.
Gross income greater than business expenses.
Gross income less than business expenses.
38
Direct deposit is beneficial because
You can split money into multiple accounts
You endorse your paycheck for security
You are less likely to bounce checks
Your net pay is higher
39
Food is an example of a want
True
False
40
Credit vs Debit card
credit is more
debit is money from your bank. credit is borrowing money
credit is money from your bank. debit is borrowing money
debit is worth more
41
Credit vs Debit
Debit Card
Credit Card
42
Which is TRUE about Certificates of Deposit (CDs)?
The bank can loan out the $ in your CD
The bank pays you interest in return
You agree to keep $ in a CD for an undetermined time period
You pay the bank some interest to keep $ in the CD
43
Which of the following is TRUE about Student Checking accounts?
There are no minimum balance requirements
Some have monthly fees
They all expire only when you turn 24 years old
They are offered only by 3 U.S. banks
44
Credit vs Debit
Debit Card
Credit Card
45
What is an example of a variable expense?
car insurance
health insurance
gasoline
house payment
46
A predatory loan is a low interest, safe loan,
True
False
47
Make up is an example of a need.
True
False
48
Getting married hurts your credit score.
True
False
49
A computer is an example of a service.
True
False
50
A key factor influencing credit scores is:
Recent inquiries
Monthly expenses
Martial status
Education level
51
Periodic Expenses
An item that costs the same each month, such as rent or a mortgage payment
An item that costs will appear periodically throughout the year
A recurring or non-recurring expense for goods and services, non-essential
An item that costs different each month, such as a utility payment
52
What is a "fixed expense" in a budget?
An expense that stays the same each month
An expense that changes each month
An expense that only occurs once a year
An expense you can easily eliminate
53
An excellent credit score would be
800-850
740-799
300-579
54
Stocks vs Bonds: Which yields a higher rate of return?
Bonds
Stocks
55
True or false? Everyone enjoys spending money on the same types of purchases.
False
True
56
Periodic expenses
are paid every month
Are paid every day
are not paid on a regular basis
are paid every week
57
Periodic expenses
Trip expenses
arise occasionally during the year, usually less than once per month.
All of the above.
School fees
58
When deciding which two items to purchase, one should always:
Choose the more expensive item
Compare the cost and the benefits of both items
Choose the cheapest item
Choose the items with greatest benefits
59
A predatory loan is high pressure, high interest.
False
True
60
Periodic expenses...
Are paid 1-2 times a year
Are paid every week
Are never paid
Always stay the same
61
The lower your credit score, the better your credit is.
True
False
62
Discretionary Expenses
Expenses you have control/ decide whether or not to buy it/pay for it
Used to track your Net Worth
Taxes and other payroll deductions (like a 401k)
An expense that is deemed essential by common convention (you need it)
63
A haircut is an example of a service.
False
True
64
Need Vs. Want
want
need
65
Savings accounts accrue ____ over time.
Stocks
Credits
Interest
Bonds
66
Savings accounts __
All are true of savings accounts
Pay low interest
Offer limited access
May require a minimum balance
67
Who uses financial institutions?
Rich people
Adults
College graduates
Anyone
68
Checking accounts do not pay interest
True
False
69
Closing a long help credit card account hurts your credit score.
True
False
70
Credit vs Debit
Credit Card
Debit Card
71
Compared to a savings account, a checking accounts are best for:
Depositing money to use for daily purchases.
Saving money for retirement.
Minors and young adults.
Investing money
72
Checking Accounts
Use to put money in your accounts
Pay withchecks or debit cards rather than cash
Endorsing transfersyour right to the check over to the bank.
Used to deposit checks
73
Saving accounts differ from checking accounts in that...
Money in a saving account can be used to fund a bank's loans
Saving accounts come with more fees than checking accounts
Checking accounts offer higher interest rates
Saving accounts let you withdraw $ an unlimited # of times
74
What is an example of a want?
All the above
Luxury Car
Concert Tickets
Starbucks
75
A "withdrawl" at the bank means...
to spend more
to spend less
putting money in the bank
taking money out of your account
76
Goods Vs. Services
Goods are things people do, services are material things
Goods are material things, services are things people do
77
Which is NOT a typical goal for a savings account?
To buy groceries for this week
To create an emergency fund
To save for a new car
To pay for higher education
78
Checking accounts…..
earn interest
are used to pay month,y expenses
lend money to businesses that are just getting started
79
If your bank balance is NEGATIVE, you are.....
In the RED
In the YELLOW
In the GREEN
In the BLUE
80
Paying off a student loan hurts your credit score.
False
True
81
Which of these is a credit score?
Green - Excellent
AA - Above average
714 - Good
6.5 - Below average
82
A budget is a plan for spending and saving your income.
False
True
83
A bank balance is what?
Scales used for weighing fish at the side of the river.
Money left in an account after deposits and withdrawals
A decision by a bank customer to which is the best bank
The weight of debt weighing on a person
84
What is a credit score?
Number that represents how well you pay your bills
Number that is used to process your credit findings
Number that you use to project future earnings
85
personal plans for spending and saving money
scarcity
voluntary exchange
personal budget
surplus
86
According to car experts, which of the following ordinarily provides the best value in the automobile ownership?
Always buying new, replacing every few years
Buying the cheapest car
Buying relatively new and driving for a long period of time
Buy old and replace every year
87
During inflation, money gains value
True
False
88
A budget is a plan for spending and saving your income.
False
True

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