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Financial Literacy Prep for W!SE Flashcards | StudBud
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Financial Literacy Prep for W!SE
Financial Literacy Prep for W!SE
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Financial Literacy Review from Everfi
Flashcards
61 cards
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Practice quiz
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Questions
61
Answers
1
What are pensions and 401ks?
Taxes you pay
Insurance you buy
Ways to save for retirement
2
Which of the following is an advantage of federal student loans?
federal student loans do not accumulate interest
federal student loans have a fixed rate
federal student loans must be paid back while in school
3
An installment loan is:
a loan in which you make monthly payments
a loan paid off in one lump sum
a loan from your mom that you will pay next month
4
Committing money to an enterprise in order to earn a financial return is known as___.
Plan of action
salary
Investing
5
Which type of life insurance never expires?
Term
Whole
6
When you purchase an item in a store, you may be charged__________.
income tax
capital gains tax
sales tax
property tax
7
Which is cheaper, term or whole life insurance?
Whole
Term
8
Insurance can help you:
reduce the chances of getting int an accident
cover all out of pocket costs
protect against unexpected accidents
minimize monthly expenses
9
What is a recession?
A period of time in which the economy goes down
A period of time in which the economy goes up
A period of prosperity
10
Which of the following are NOT deducted on a typical paystub:
State Income Tax
Sales tax
Medicare tax
Social security tax
11
PAYMENTS OR PROPERTY GIVEN TO PEOPLE OR INSTITUTIONS, WHICH DO NOT HAVE TO BE PAID BACK
STOCK
BONDS
GRANTS
12
Which of the following will charge the highest interest rate?
credit unions
Banks
pawn shops and payday lenders
13
What is the safest way to dispose of old bank account statements?
Keep them bundled together in a folder
Shred them in a paper shredder
Put them in the trash unopened
Throw them out in trash
14
When you purchase a municipal bond, you are:
loaning money to a municipality
investing in a index fund
diversifying your portfolio
15
Which type of insurance requires you to have a Primary Care Physician?
HMO
PPO
16
You should reconcile your checking account
every six months
when you get your monthly bank statement
every week
once a year
17
What is a tax exemption?
Something that may be claimed by an indiv. to reduce taxes
Something ppl have to pay higher taxes than other citizens
Something that ppl get when they have dependants
18
A business owned by a group of stockholders
Group of friends
Partnership
Sole proprietor
Corporation
19
What type of investment has the highest risk?
Stocks
Savings Account
Bond
20
Identity thieves can use your personal information to
Get a cell phone contract
Sign up for electricity service
Open a credit card
All of the above
21
Which is better, a bull market or a bear market?
Bear
Bull
22
How much should you pay for coverage monthly? Premium $300 month; deductible $500
$800
$500
$300
$200
23
What is deflation?
The rate at which the general level of prices goes down
When there is a reduction in the supply of money or credit
when the general level of prices goes up
24
Someone gets your tax documents. If this person is not caught, you will likely be a victim of _
identity theft
tax fraud
murder
25
Someone who organizes, manages, and assumes the risk of owning a business
Sole proprietorship
Partner
Entrepreneur
26
The best way to investigate fraudulent transactions on your credit card is to:
Review your recent credit card statement
Keep a copy of your bank statements in a safer place
Keep track of your monthly budget
Review all old bank statements
27
What is a cashier's check?
A check you receive from your friend out of their checkbook
A check you write to the bank
A check guaranteed by the bank that writes the check
28
Pay that is figured under hourly rate
Wage
commission
Bonus
29
The form you complete to determine how much tax to withhold from your paycheck is the_______.
1099
1040 EZ
W-2
W-4
30
What is the unauthorized use of a credit card?
using a credit card at a gas pump
using a credit card at the store
using a stolen credit card at a store
31
What is liquidity in business?
money invested in a house
how quickly you can convert an asset to cash
water
32
The ______ tells you how many years it will take an investment to double.
bank
Rule of 72
Doublemint twin rule
33
Which asset is more liquid?
money in a savings account
a house
money in a certificate of deposit
34
It's important to reconcile your checking account to make sure of mistakes
True
False
35
Which are the correct orders of investments from Lowest risk to Highest risk?
Treasury bond−Diversified mutual fund–Stock
Treasury bond−Stock−Diversified mutual fund
Diversified mutual fund−Treasury bond−Stock
Stock−Treasury bond−Diversified mutual fund
36
It's best to start saving for retirement when you're about 15 years away from retirement
True
False
37
A_________is generally considered an appreciating asset bcuz it will_________in value over time
house; decrease
car; increase
house; increase
car; decrease
38
The largest secondary market for stocks/securities in the U.S, is the_________.
New York Stock Exchange
Dow Jones
NASDAQ
39
Where can you find information about Financial Aid? Check all that apply
Online
Counselor
Town hall
College Financial Aid Officer
40
Renting provides_________flexibility but can lead to_________costs in the long-‐term
greater; lower
less;higher
less;lower
greater; higher
41
The Federal Reserve System:
Is who you pay your taxes to
is the central bank of the US
was created by Congress to provide a safer monetary sytem
42
What is a mortgage?
a measure of the value of a home
A type of rent used to pay for housing
a type of loan used to buy property
a measure of your credit rating
43
Which earns you more money over time?
Compound interest
Simple interest
No interest
44
Which of the following is generally true about 401(k) and 403(b) retirement plans?
they restrict when you can withdraw your money
all the above
they are plans offered through employers
they offer some tax benefits
45
A voluntary payment offered to an employee based on quality of service
tip
bond
salary
46
The return investment (ROI) from education is typically the highest for:
someone with a 4-year degree
A high school graduate
Someone with a 2 year degreee
a college applicant
47
Diversification is __________.
buying many different types of stocks to have less risk
buying one type of stock
safer than having a portfolio that isn't diversified
48
An investment portfolio should always be diverse.
False
True
49
Which loan type requires you to make loan payments while you’re attending school?
Unsubsidized federal loan
Neither a & b
Subsidized federal loan
Both a & b
50
What is the primary reason to issue stock?
increase investor awareness of the company
to help investors earn high rate of returen
to raise money to grow the company
distribute the risk of bankruptcy across investors
51
Which institutions give loans?
payday lender
pawn shop
all
credit union
52
Which investment offers the lowest risk?
Savings Account
Bonds
Stocks
53
When buying stock in a company, you are:
loaning money to a company
buying a portion of the company
diversifying your portfolio
investing in an index fund
54
Jan pays $70 each month for her auto insurance policy.This regular payment is called a:
co-pay
deductible
premium
claim
55
The main trade-off that all investors must consider is:
income vs cost
stocks vs bonds
diversity vs uniformity
risk vs return
56
What is a credit union?
Where ppl with bad credit acquire loans
It's the same as a bank
Non-profit institution that is owned by its members
57
Which document puts you at the least risk of identity theft?
Pre-approved credit card offers
Old tax records
Cash receipts
paycheck stubs
58
Pay that is fixed amount regardless of hours worked
Bonus
Salary
Tip
59
When you buy insurance, you and the insurance company are_______________.
sharing the risk
breaking the law
entering into a contract
60
Compounding of interest allows a principal amount to grow at a ____ rate than simple interest.
exchange
faster
slower
61
When you buy a ______________, you are loaning money to an organization.
Mutal Fund
Stock
Bond
Index Fund
