You always pay 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

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

saving money in an account that earns interest

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

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

more the person earns, the more the person pays.

Which statement about risk and insurance is true

The greater the risk, the higher the cost of insurance

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.

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

limit the amount of cash a person needs to carry

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

Advisor C: Invest in mutual funds

When purchasing stock, a person should be aware that

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

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

provide shareholders with dividends

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

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

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

"Pay yourself first", means that a person should

save and invest from each paycheck before spending any money

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?

One advantage of having a bank savings account is that it

Earn interest while establishing a financial history

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

spend more for the same amount of groceries

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

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

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

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Wise Pre-Test Part One

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Questions 30

Answers

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

Wise Pre-Test Part One Flashcards | StudBud