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Financial Literacy Prep for Wise Test Flashcards | StudBud
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Financial Literacy Prep for Wise Test
Financial Literacy Prep for Wise Test
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Financial Literacy Review from Everfi
Flashcards
73 cards
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Questions
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Answers
1
What is a certified check?
A check you receive from your friend out of their checkbook
A check guaranteed by the bank that writes the check
A check you get from your employer
A check you write to the bank
2
Which of the following are costs associated with owning car?
Wear & tear fees
Insurance
Fuel
Repairs
3
What is the primary reason to issue stock?
distribute the risk of bankruptcy across investors
increase investor awareness of the company
to raise money to grow the company
to help investors earn high rate of returen
4
Identity thieves can use your personal information to
Get a cell phone contract
Open a credit card
All of the above
Sign up for electricity service
5
Your
net worth
is the difference between the value of what you own and the debts you owe.
False
True
6
The main trade-off that all investors must consider is:
risk vs return
income vs cost
stocks vs bonds
diversity vs uniformity
7
What is the most likely form of payment for a part-time employee at Best Buy?
Commission
Wages
Tip
Salary
8
Shares in ownership of a company, which entitle the bearer to profit dividends:
bonds
CD's
grants
stocks
9
What is a credit union?
It's the same as a bank
Non-profit institution that is owned by its members
Where ppl with bad credit acquire loans
10
Which type of insurance requires you to have a Primary Care Physician?
PPO
HMO
11
What is the unauthorized use of a credit card?
using a credit card at a gas pump
using a stolen credit card at a store
using a credit card at the store
12
Which is cheaper, term or whole life insurance?
Term
Whole
13
What is a tax exemption?
A legal forgiveness of tax debt
An amount of money forgiven on taxes for dependents
None of these
A loophole in the tax code that allows you to not pay
14
Which document puts you at the least risk of identity theft?
Cash receipts
paycheck stubs
Old tax records
Pre-approved credit card offers
15
When Dan goes to the doctor, he pays $15 when he gets to his appointment. This is his:
co-pay
deductible
claim
premium
16
Renting provides_________flexibility but can lead to_________costs in the long-‐term
less;lower
greater; lower
less;higher
greater; higher
17
Pay that is figured under hourly rate
Wage
commission
Bonus
18
The ______ tells you how many years it will take an investment to double.
Doublemint twin rule
Rule of 72
bank
19
When you purchase an item in a store, you may be charged__________.
income tax
sales tax
capital gains tax
property tax
20
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
Review all old bank statements
Keep track of your monthly budget
21
Which asset is more liquid?
money in a savings account
a house
money in a certificate of deposit
22
Someone wanting to protect a single item of great financial or personal value should get a
comprehensive insurance policy
regular renter's insurance policy
regular homeowner's insurance policy
personal property floater policy
23
An installment loan is:
a loan paid off in one lump sum
a loan in which you make monthly payments
a loan from your mom that you will pay next month
24
Which type of car insurance is required by most states?
liability
medical
comprehensive
collision
25
Using the FAFSA form,you can apply for:
private loans
both a and b
the federal work study program
federal student loans
26
A business owned by a group of stockholders
Group of friends
Sole proprietor
Partnership
Corporation
27
What is the safest way to dispose of old bank account statements?
Keep them bundled together in a folder
Throw them out in trash
Put them in the trash unopened
Shred them in a paper shredder
28
Which of the following will charge the highest interest rate?
credit unions
Banks
pawn shops and payday lenders
29
Where can you find information about Financial Aid? Check all that apply
Online
Your bank
College Financial Aid Officer
Counselor
30
Which is better, a bull market or a bear market?
Bear
Bull
31
Diversification is __________.
buying many different types of stocks to have less risk
safer than having a portfolio that isn't diversified
buying one type of stock
32
What is the most likely form of payment for a waitress at Applebee's?
commission
tip
salary
wages
33
Committing money to an enterprise in order to earn a financial return is known as___.
Investing
salary
Plan of action
34
Insurance can help you:
reduce the chances of getting int an accident
protect against unexpected accidents
cover all out of pocket costs
minimize monthly expenses
35
Which investment offers the lowest risk?
Bonds
Stocks
Savings Account
36
When buying stock in a company, you are:
diversifying your portfolio
investing in an index fund
buying a portion of the company
loaning money to a company
37
What is a recession?
A period of time in which the economy goes up
A period of time in which the economy goes down
A period of prosperity
38
Which are the correct orders of investments from Lowest risk to Highest risk?
Treasury bond−Stock−Diversified mutual fund
Stock−Treasury bond−Diversified mutual fund
Diversified mutual fund−Treasury bond−Stock
Treasury bond−Diversified mutual fund–Stock
39
What is deflation?
When there is a reduction in the supply of money or credit
The rate at which the general level of prices goes down
when the general level of prices goes up
40
A direct tax on cigarettes or alcohol is called a
regressive tax
excise tax
flat tax
progressive tax
41
Which of the following is an advantage of federal student loans?
federal student loans must be paid back while in school
federal student loans have a fixed rate
federal student loans do not accumulate interest
42
Which type of life insurance never expires?
Whole
Term
43
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 offer some tax benefits
they are plans offered through employers
44
Municipal bonds are exempt from federal taxes and state taxes
False
True
45
When you buy a ______________, you are loaning money to an organization.
Index Fund
Stock
Mutal Fund
Bond
46
The form you complete to determine how much tax to withhold from your paycheck is the_______.
1040 EZ
1099
W-4
W-2
47
The Federal Reserve System:
was created by Congress to provide a safer monetary system.
creates fiscal policy.
cannot regulate banks.
Is who you pay your taxes to
48
When you buy insurance, you and the insurance company are_______________.
putting all of the risk onto other people.
sharing the risk with a bank.
entering into a contract with defined benefits.
agreeing not to hold each other liable for accidents.
49
What is a mortgage?
a measure of your credit rating
A type of rent used to pay for housing
a measure of the value of a home
a type of loan used to buy property
50
It's best to start saving for retirement when you're about 15 years away from retirement
True
False
51
The return investment (ROI) from education is typically the highest for:
someone with a 4-year degree
a college applicant
Someone with a 2 year degreee
A high school graduate
52
Pay that is fixed amount regardless of hours worked
Salary
Tip
Bonus
53
Which institutions give loans?
pawn shop
all
credit union
payday lender
54
What type of investment has the highest risk?
Savings Account
Bond
Stocks
55
What is liquidity in business?
money invested in a house
water
how quickly you can convert an asset to cash
56
Generally speaking, a ____ is a positive asset because it will ____ in value over time.
house; increase
house; decrease
car; increase
car; decrease
57
What are pensions and 401ks?
Ways to save for retirement
Insurance you buy
Taxes you pay
58
When you purchase a municipal bond, you are:
diversifying your portfolio
loaning money to a municipality
investing in a index fund
59
Someone who organizes, manages, and assumes the risk of owning a business
Entrepreneur
Partner
Sole proprietorship
60
Treasury bonds are typically bought at half the face value, unless bought online.
False
True
61
Which of the following are NOT deducted on a typical paystub:
Sales tax
State Income Tax
Medicare tax
Social security tax
62
Which earns you more money over time?
Compound interest
No interest
Simple interest
63
An investment portfolio should always be diverse.
False
True
64
Typically you have how long after graduation to begin paying back student loans?
2 years
3 months
6 months
1 year
65
You should reconcile your checking account
when you get your monthly bank statement
once a year
every week
every six months
66
In the SMART goal system, the M stands for
Mediocre
Mendacious
Measurable
Mental
67
A voluntary payment offered to an employee based on quality of service
bond
salary
tip
68
It's important to reconcile your checking account to check for mistakes.
True
False
69
Someone gets your tax documents. If this person is not caught, you will likely be a victim of _
arson
business fraud
identity theft
murder
70
The largest secondary market for stocks/securities in the U.S, is the_________.
New York Stock Exchange
Dow Jones
NASDAQ
71
Compounding of interest allows a principal amount to grow at a ____ rate than simple interest.
slower
exchange
faster
72
Jan pays $70 each month for her auto insurance policy.This regular payment is called a:
co-pay
premium
claim
deductible
73
After you send in your FAFSA form,what will you receive back?
a copy of your complete FAFSA form
a copy's of your family's tax returns
your student aid report
your IRS date retrieval form
