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Semester Exam Review - Fall Financial Literacy 2023 Flashcards | StudBud
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Semester Exam Review - Fall Financial Literacy 2023
Semester Exam Review - Fall Financial Literacy 2023
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1
This type of identity theft involves a person stealing your SSN in order to piggy back on your legal work status
Tax Identity Theft
Medical Identity Theft
Employment Identity Theft
Criminal Identity Theft
2
Which of the following assets allows an investor to own a portion of the public company?
Gold
Stocks
Bonds
Property
3
All of these are features of checking accounts EXCEPT
Use of debit card for online/in store transactions
Earn Interest
Deposit and Withdraw freely
Check writing priviledges
4
On an amortized loan, why does the amount of INTEREST you owe on a loan decrease over time?
Banks are legally required to lower interest rates over time
With each payment, principal increases; so interest lowers
The institution trusts you more, so they lower the interest rate
With each payment, principal decreases; so interest lowers
5
What is the LAST day you can file a federal income tax return without an extension?
Jan 1
Apr 15
Oct 15
Dec 31
6
What is the ultimate goal of a scam?
To get money from people
To steal people's names
To help people invest in the stock market
To help people file taxes
7
How much are Hope's gross wages for this pay period?
$600
$15
$40
$5,400
8
Familial and other relationships from early life which influence how people handle money are which value system?
Financial Values
Social Values
Physical Values
Inner Values
9
All of these are methods of budgeting EXCEPT
The 50/30/20 rule
The Pay Yourself First Strategy
Zero-Based Budgeting
The Envelope system
10
What is the difference between Direct Subsidized and Unsubsidized federal student loans
Subsidized loans do not accumulate interest while enrolled; unsubsidized do
Both subsidized and unsubsidized loans accumulate interest while enrolled
Subsidized loans accumulate interest while in school, unsubsidized do not
Neither subsidized or unsubsidized federal student loans gather interest
11
Which of the following is true about a college education?
HS grads have higher lifetime earnings on average than college grads
College grads have higher lifetime earnings on average than HS grads
College grads have a higher rate of unemployment
College is the only way to get a stable high-paying job
12
Failing to pay Federal student loans may result in:
Reduced student loan interest
Higher credit score
Revocation of your degree
Tax refund garnishment
13
Which of the following is true about Payday loans?
Most people successfully pay these loans back
You need a credit card account to get one
You are charged a 1-time fee for the loan
You can pay them back in installments
14
A type of credit card that requires borrowers to pay the lender a fixed, up-front, payment as collateral is a...
Secured Credit Card
Employee Credit Card
Student Credit Card
Unsecured Credit Card
15
What is the purpose of the FDIC/NCUA?
To ensure that bank deposits are insured up to $250,000
To ensure that bank deposits are never loaned out
To ensure that banks are following federal guidelines for loans
To ensure that banks have proper insurance on investment portfolios
16
All of the following are recommended strategies for beginner investors EXCEPT…
Try to pick winning stocks and beat the market
Minimize expense ratios to cut back on costs
Choose your investments based on your risk tolerance
Recognize cognitive biases that may be influencing your decisions
17
Where can you get a free copy of your credit report?
freecreditreport.com
annualcreditreport.com
getmycreditreport.com
creditreport.gov
18
The amount of time you have the repay the entire loan is the...
Fee
Term
Statement
Principal
19
The original amount of money borrowed; separate from interest and fees is...
The Principal
The Interest Rate
The Annual fee
The interest
20
How are credit cards and debit cards different?
With credit cards, you are borrowing from family
Some debit cards say VISA on them; credit cards don't
They are both linked to your checking account in different ways
A credit card can offer perks such as rewards programs
21
What is Compound Interest?
It is Simple interest - interest earned on that interest
It is simple interest + interest earned on that interest
It is not different; they are one in the same
It is double the simple interest earned on that investment
22
Which of the following is an example of diversification?
Purchasing shares of stock in a variety of companies and industries
Putting the majority of your money into savings and investing the rest
Using multiple investment managers to get different opinions
Investing different amounts of money every month
23
Where should you report Social Security Identity Theft?
The Consumer Financial Protection Bureau
The Federal Deposit Insurance Corporation
The Internal Revenue Service
The Federal Trade Commission
24
How do you avoid paying interest on your credit card (or any other loan for that matter)?
Pay Interest 1st, then pay what you can on leftover balance
Pay the principal 1st, then pay what you can on interest
Always make the full payments on time
Always make the minimum payment on time
25
The process of setting money aside to increase wealth over time for long-term financial goals such as retirement is..
Budgeting
Asset Allocation
Investing
Insider Trading
26
Which type of identity theft involves a scammer stealing your social security number in order to open a credit card?
Employment Identity Theft
Social Security Identity Theft
Medical Identity Theft
Tax Identity Theft
27
Why is it important to create a budget?
A budget is necessary to qualify for loans and credit cards
A budget makes filing your taxes much simplier and faster
A budget will guarantee you have enough money saved for college
A budget will help you save money and prioritize your spending
28
The smallest amount of a credit card bill that a card holder must pay during the billing cycle to be in good standing is
The Interest Rate
The Minimum Payment
The Credit Balance
The Annual Fee
29
Which of the following is TRUE about cognitive biases
It is easy to recognize when cognitive biases are influencing our decisions
Awareness is often the first step to overcoming cognitive biases' influence
There are only a handful of cognitive biases that exist
There is rarely anything you can do to combat cognitive biases' influence
30
What kind of information can you find on a credit report?
Your parents' and siblings' contact information
Inquiries you've made on new lines of credit
Your medical insurance information
Your education level
31
What is the purpose of a Schumer box when applying for a credit card?
It gives detailed explanation of your credit history
It tracks your spending habits to help you find ways to budget your money
It summarizes how much interest you have accrued in the last 90 days
It summarizes information like interest rates, fees, and grace periods
32
What is the difference between soft skills and hard skills?
Hard skills are more advanced than soft skills
Soft skills are less important to employers because they are not technical
Hard skills are easily measurable; soft skills are "people skills"
In job postings, hard skills are "required" and soft skills are "preferred"
33
The two major signs of a scam are a request for personal information and
A free 30 day trial of a product or service
A request to like and subscribe an account on social media
A coupon code offered for a current sale
An urgent need for money
34
A small loan, offered by a business, at a high interest rate, and meant to be paid with your next paycheck is a...
Mortgage Loan
Personal Loan
Auto Loan
Payday Loan
35
What is the purpose of insurance?
Build Relationships
Manage Assets
Build Wealth
To transfer risk
36
How do you avoid paying interest on your credit card (or any other loan for that matter)?
Always make the minimum payment on time
Pay the principal 1st, then pay what you can on interest
Always make the full payments on time
Pay Interest 1st, then pay what you can on leftover balance
37
Comparison Shopping is the practice of ...
Comparing a product you bought to a similar product a friend bought
Comparing the prices of two unrelated products before purchasing them
Comparing a product you purchased in the past to the updated version
Comparing the price, reviews, and other factors of similar products
38
All of the following characteristics best fit the
Investor
attitude EXCEPT...
Quick Short term gain perspective
Infrequent trades; buys based on companies overall health
Buys and holds investments for a long period of time
Assumes the market will increase over time and bounce back from price drops
39
A person who has permission to use another persons credit card, but is not legally responsible for the balance is a ...
Credit Maintainer
Dependent
Cosigner
Authorized User
40
All of the following are True of a
Trader
attitude EXCEPT...
Manages risk through market analysis in order to buy low and sell high
Focused on long term market growth
Quick Short Term Gains trading style
Frequently trading stocks in order to maximize returns
41
Which is NOT a typical goal for a savings account?
Create an emergency fund
Pay for higher education
Save for a new car
Buy groceries for the week
42
What is a Stock?
A measurement of a company’s profits
A report that includes details of a company’s leadership and earnings
A low-risk savings option that can help you build an emergency fund
An investment option that allows you to own a small piece of a company
43
When you complete your 1040 form, if you overpaid your taxes and the government owes you money, that is called a ...
Direct Deposit
Refund
Deduction
Witholding
44
What form is used to file for federal income tax?
1099
1040
W-4
W-2
45
People who values sustainability of their money and generally have more in reserve identify with which value system?
Financial Values
Social Values
Inner Values
Physical Values
46
All of these savings accounts allow for the free access to funds EXCEPT
Certificate of Deposit
Online Savings Account
Money Market Account
Traditional Savings Account
47
All of the following are part of a credit report EXCEPT:
Loan Repayment
Spending habits
Current Credit Inquiries
Credit Limit Utilization
48
Which of the following is TRUE about gross income and net income?
They are the same thing
Gross income is the total amount earned AFTER deductions
Net income is the total amount earned BEFORE deductions
Gross income is the total amount earned BEFORE deductions
49
A borrower is legally responsible to pay back any loans or forms of credit that is lended to them during their life.
True
False
50
Which form will determine how much money will be witheld from your paycheck for taxes?
1040
W-4
I-9
1099
51
Which of the following statements BEST describes the stock market?
Businesses listing their entire company for sale
Investors buying stock in hopes of being hired by companies
People making donations to companies that need funding
Businesses selling partial ownership of their companies to raise capital
52
An I-9 is a form used by an employer to verify an employee's identity and establish eligibility to work within the US
True
False
53
What is the number #1 type of identity theft?
Employment Fraud
Tax Fraud
Credit Card Fraud
Loan and Lease Fraud
54
All of these are potential outcomes for identity theft EXCEPT...
You might find it more difficult to obtain insurance
A new loan could be taken out in your name
Someone could access your bank account and withdraw your funds
Someone pretending to be you could go to your workplace and replace you
55
How do Savings Accounts and Checking Account differ?
Banks collect fees from savings accounts; but not checking accounts
Checking accounts are transactional; Savings accounts earn interest
Banks collet fees from checking accounts; but not savings accounts
Checking accounts earn interest; Savings accounts are transactional
56
Jason filed his 2022 tax return and owes money. If he doesn't want to pay a fee, when should he pay this amount by?
April 18th
January 1st of the next year
October 15th
December 31st
