Why would Investing 3% of $31,000 at 25 & 50 to invest 3% of $55,000 each year have more. Why?

The 25 year old invested money has had a longer time to grow

When a person wins $5,000 in the lottery, the person will

report the $5,000 to the IRS as income for that year

The insurance has a $15 co-payment. This means that at each visit to a participating doctor

person is responsible for paying $15 regardless of the cost

Which is the most important question to ask when comparing credit card offers?

What is the annual percentage rate (APR) on the credit card?

"Pay yourself first", means that a person should

save and invest from each paycheck before spending any money

You always pays the minimum due instead of the full balance on your monthly credit card bill

it will take a longer time for her to pay the amount owed

A person worries that the bank will fail and he will lose all of his money. tell him/her

Accounts at FDIC member banks are insured up to $250,000.

Which financial advisor is recommending a long-term investment that lowers investment risk?

Advisor C: Invest in mutual funds

Which approach to money management indicates an understanding of the time value of money?

saving money in an account that earns interest

One advantage of having a bank savings account is that it

Earn interest while establishing a financial history

When purchasing stock, a person should be aware that

no guarantee that the price of the stock will go up.

A high school senior should consider going to an in-state or city public college if he

worried about having a lot of student loans after graduation

Which staement about risk and insurance is true

The greater the risk, the higher the cost of insurance

The line of credit on a person’s credit card increased from $10,000 to $15,000. increase mean?

The credit card owner can charge purchases up to $15,000

It is important for a person to have a legal document known as a WILL to

designate who gets what she owns after she dies

The Federal Reserve System (Fed) helps protect depositors and its member banks by setting

the amount of money a member bank must have on deposit

The US government uses a progressive/graduated income tax method. This means

more the person earns, the more the person pays.

A stock is characterized as a "growth" stock because the expectation is for the corporation to

have significant increases in sales and earnings

A benefit of using a debit card is that it provides a way to

limit the amount of cash a person needs to carry

A person generally spends $100 a month on groceries, inflation rate is 10%, what happens

spend more for the same amount of groceries

studbud

Duplicate of Wise Pre-Test Part One

30 termsStudBud Administration243 plays

#WISE

Flashcards30 cardsFPractice quizPHost liveL

Questions 30

Answers

1
Why would Investing 3% of $31,000 at 25 & 50 to invest 3% of $55,000 each year have more. Why?
Investments provided to a 25 yo are better than the 50 yo.
Because of inflation
The 25 year old invested money has had a longer time to grow
The interest rate earned by a 25 year old is greater
2
When a person wins $5,000 in the lottery, the person will
have to use the money to pay for educational expense
receive the winnings from the Federal Reserve Bank (Fed)
report the $5,000 to the IRS as income for that year
receive more than $5,000 because the money earns interest
3
The insurance has a $15 co-payment. This means that at each visit to a participating doctor
doctor will deduct $15 from the person’s bill
doctor will charge the insurance company $15 for the visit
person is responsible for paying $15 regardless of the cost
person will only be covered for $15 and owe the rest
4
A likely consequence of failing to pay a car loan is
repossession by the lender
an increase in taxes withheld each pay period
a new loan for a longer repayment period
an interest rate increase on another loan he has
5
Which is the most important question to ask when comparing credit card offers?
What is the annual percentage rate (APR) on the credit card?
Can credit card payments be made before the due date?
How many people are using the card?
What time of the month are the payments due?
6
A person has a car loan with a 10% interest rate. Pay back the least amount if paid back in
4 years
6 years
3 years
5 years
7
"Pay yourself first", means that a person should
save and invest from each paycheck before spending any money
help family members reduce their credit card debt
borrow money to buy personal items
pay credit card bills before going on vacation
8
You always pays the minimum due instead of the full balance on your monthly credit card bill
the company loses money because she is paying less interest
the credit card company to charge her a higher interest rate
she cannot make new purchases with the credit card
it will take a longer time for her to pay the amount owed
9
A person worries that the bank will fail and he will lose all of his money. tell him/her
Banks are not permitted by law to go bankrupt.
Banks have to buy insurance to cover the money in them
The (Fed) matches the money that member banks have.
Accounts at FDIC member banks are insured up to $250,000.
10
Which item is NOT a mandatory deduction from a person’s salary?
401(k) contribution
State Unemployment Insurance/State Disability Insurance
Social Security (FICA)
State Income Tax
11
Which financial advisor is recommending a long-term investment that lowers investment risk?
Advisor C: Invest in mutual funds
Advisor B: Purchase a computer
Advisor A: Purchase a used car
Advisor D: Invest in speculative stock
12
Which approach to money management indicates an understanding of the time value of money?
saving money in a safe at home
saving money in an account that earns interest
using debit card for all purchases
using a prepaid credit card for all purchases
13
One advantage of having a bank savings account is that it
offers higher interest rate on US goverment saving bonds
guarantees depositors interes-free loans
do not have to pay bank charges or late fees at the bank
Earn interest while establishing a financial history
14
A person’s net worth is $10,000. He has $25,000 in assets. What are his liabilities?
$35,000
$10,000
$15,000
$5,000
15
When purchasing stock, a person should be aware that
he must hold that stock until retirement.
no guarantee that the price of the stock will go up.
buying stock in different companies increases risk.
the (SEC) charge stockholders an annual fee .
16
A high school senior should consider going to an in-state or city public college if he
is interested in having many course options
wants a guarantee of a full time job after graduation
worried about having a lot of student loans after graduation
wants to attend a school with a karge campus
17
Which investment may pay the owner dividends?
collectibles
bonds
stocks
real estate
18
What action will help a person the MOST to make investment decisions?
create financial goals
ask friend about their investment strategies
open a brokerage account
read advertisements on the internet
19
Which staement about risk and insurance is true
The degree of risk has no influence on the cost on insurance
The lower the risk, the higher the cost of insurance
The greater the risk, the lower the cost of insurance
The greater the risk, the higher the cost of insurance
20
The best way to ensure a high credit score is to
gave a high unpaid credit card balance
invest in speculative stocks
graduate from college
pay your bills on time
21
The line of credit on a person’s credit card increased from $10,000 to $15,000. increase mean?
The credit card owner pays interest on the first $10,000
The credit card company can sue the owner for up to $15,000
The credit card owner can charge purchases up to $15,000
The company charge a higher APR on the additional $5000
22
Teenagers need to be financially literate because they are
paying mortgages
working full time
living at home with parents
spending money
23
When using a debit card to buy something, where does the money come from?
The US Treasury Department
A stock account
A checking account
A Certificate of Deposit (CD)
24
It is important for a person to have a legal document known as a WILL to
know how much money she should save for retirement
designate who gets what she owns after she dies
improve her credit history
increase her credit score
25
The Federal Reserve System (Fed) helps protect depositors and its member banks by setting
the amount of money a member bank must have on deposit
limits on the number of depositors a member bank may have
limits on how many brances a member bank can have
where a member bank may advertise their product and services
26
The US government uses a progressive/graduated income tax method. This means
more the person earns, the more the person pays.
less the person earns, the more the paerson pays
more the person earns, the less the person pays.
person pays the same tax rate regardless of earnings.
27
A stock is characterized as a "growth" stock because the expectation is for the corporation to
pay a high rate of interest monthly
provide shareholders with dividends
issue bonds to investors
have significant increases in sales and earnings
28
A benefit of using a debit card is that it provides a way to
limit the amount of cash a person needs to carry
earn interest on purchases
earn additional income
improve a person’s credit rating
29
A person generally spends $100 a month on groceries, inflation rate is 10%, what happens
find many supermarkeets going out of bsuiness
see grocery items decline in price
see the stock of grocery companies trading at higher prices
spend more for the same amount of groceries
30
When determining the dollar value of a job offer which benefit should NOT be included?
Tuition reimbursement
A private office
Vacation days
Sick days

Duplicate of Wise Pre-Test Part One Flashcards | StudBud