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Duplicate of Financial Literacy Prep for Wise Test
Duplicate of Financial Literacy Prep for Wise Test
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Financial Literacy Review from Everfi
Flashcards
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Questions
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Answers
1
The largest secondary market for stocks/securities in the U.S, is the_________.
NASDAQ
New York Stock Exchange
Dow Jones
2
It's best to start saving for retirement when you're about 15 years away from retirement
True
False
3
What is a tax exemption?
Something ppl have to pay higher taxes than other citizens
Something that may be claimed by an indiv. to reduce taxes
Something that ppl get when they have dependants
4
Insurance can help you:
reduce the chances of getting int an accident
protect against unexpected accidents
minimize monthly expenses
cover all out of pocket costs
5
Renting provides_________flexibility but can lead to_________costs in the long-‐term
less;lower
less;higher
greater; lower
greater; higher
6
Which is better, a bull market or a bear market?
Bear
Bull
7
Which of the following is generally true about 401(k) and 403(b) retirement plans?
they restrict when you can withdraw your money
they offer some tax benefits
all the above
they are plans offered through employers
8
What is the best form of payment for a waitress at Applebee's?
tip
salary
wages
9
How much should you pay for coverage monthly? Premium $300 month; deductible $500
$800
$500
$200
$300
10
When you purchase an item in a store, you may be charged__________.
income tax
property tax
capital gains tax
sales tax
11
The main trade-off that all investors must consider is:
risk vs return
stocks vs bonds
diversity vs uniformity
income vs cost
12
What type of investment has the highest risk?
Savings Account
Stocks
Bond
13
When you purchase a municipal bond, you are:
investing in a index fund
loaning money to a municipality
diversifying your portfolio
14
Municipal bonds are exempt from federal taxes and state taxes
True
False
15
The ______ tells you how many years it will take an investment to double.
bank
Doublemint twin rule
Rule of 72
16
Which investment offers the lowest risk?
Bonds
Stocks
Savings Account
17
Insurance can help you:
reduce the chances of getting into accident
cover all out of pocket costs
minimize monthly expenses
protect against unexpected accidents
18
Which are the correct orders of investments from Lowest risk to Highest risk?
Stock−Treasury bond−Diversified mutual fund
Treasury bond−Diversified mutual fund–Stock
Diversified mutual fund−Treasury bond−Stock
Treasury bond−Stock−Diversified mutual fund
19
When you buy insurance, you and the insurance company are_______________.
sharing the risk
breaking the law
entering into a contract
20
Jan pays $70 each month for her auto insurance policy.This regular payment is called a:
premium
co-pay
claim
deductible
21
What is the best form of payment for a part-time employee at Best Buy?
Commission
Tip
Salary
Wages
22
A business owned by a group of stockholders
Sole proprietor
Corporation
Group of friends
Partnership
23
A_________is generally considered an appreciating asset bcuz it will_________in value over time
house; increase
car; increase
car; decrease
house; decrease
24
Diversification is __________.
safer than having a portfolio that isn't diversified
buying many different types of stocks to have less risk
buying one type of stock
25
Which is cheaper, term or whole life insurance?
Whole
Term
26
What is the primary reason to issue stock?
increase investor awareness of the company
to raise money to grow the company
distribute the risk of bankruptcy across investors
to help investors earn high rate of returen
27
Pay that is fixed amount regardless of hours worked
Tip
Salary
Bonus
28
When buying stock in a company, you are:
investing in an index fund
loaning money to a company
buying a portion of the company
diversifying your portfolio
29
Your
net worth
is the difference between the amount you own and the debts you owe.
False
True
30
What is the unauthorized use of a credit card?
using a stolen credit card at a store
using a credit card at the store
using a credit card at a gas pump
31
Where can you find information about Financial Aid? Check all that apply
College Financial Aid Officer
Online
Counselor
Town hall
32
Which type of life insurance never expires?
Term
Whole
33
Committing money to an enterprise in order to earn a financial return is known as___.
Plan of action
Investing
salary
34
After you send in your FAFSA form,what will you receive back?
your student aid report
a copy's of your family's tax returns
a copy of your complete FAFSA form
your IRS date retrieval form
35
A business with co-owners, in which both parties are legally joined together
Entrepreneur
Partnership
Cooperation
Sole proprietor
36
Identity thieves can use your personal information to
All of the above
Sign up for electricity service
Get a cell phone contract
Open a credit card
37
A bear market last longer than a bull market.
Ture
False
38
What is the best form of payment for a part-time employee at Best Buy?
wages
commission
salary
Tip
39
PAYMENTS OR PROPERTY GIVEN TO PEOPLE OR INSTITUTIONS, WHICH DO NOT HAVE TO BE PAID BACK
BONDS
GRANTS
STOCK
40
What is the safest way to dispose of old bank account statements?
Throw them out in trash
Put them in the trash unopened
Keep them bundled together in a folder
Shred them in a paper shredder
41
Which of the following is an advantage of federal student loans?
federal student loans have a fixed rate
federal student loans must be paid back while in school
federal student loans do not accumulate interest
42
Pay that is figured under hourly rate
Wage
Bonus
commission
43
Someone who organizes, manages, and assumes the risk of owning a business
Entrepreneur
Sole proprietorship
Partner
44
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
45
Which document puts you at the least risk of identity theft?
Pre-approved credit card offers
paycheck stubs
Cash receipts
Old tax records
46
Which of the following are NOT deducted on a typical paystub:
State Income Tax
Sales tax
Medicare tax
Social security tax
47
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
48
Which loan type requires you to make loan payments while you’re attending school?
Subsidized federal loan
Neither a & b
Both a & b
Unsubsidized federal loan
49
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
50
Which earns you more money over time?
Compound interest
No interest
Simple interest
51
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
52
The form you complete to determine how much tax to withhold from your paycheck is the_______.
W-4
W-2
1040 EZ
1099
53
What is deflation?
When there is a reduction in the supply of money or credit
when the general level of prices goes up
The rate at which the general level of prices goes down
54
What are pensions and 401ks?
Insurance you buy
Taxes you pay
Ways to save for retirement
55
An investment portfolio should always be diverse.
True
False
56
A voluntary payment offered to an employee based on quality of service
salary
bond
tip
57
Compounding of interest allows a principal amount to grow at a ____ rate than simple interest.
exchange
faster
slower
58
Using the FAFSA form,you can apply for:
private loans
federal student loans
the federal work study program
both a and b
59
Which of the following will charge the highest interest rate?
pawn shops and payday lenders
Banks
credit unions
60
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
61
What is liquidity in business?
money invested in a house
water
how quickly you can convert an asset to cash
62
The best way to investigate fraudulent transactions on your credit card is to:
Review all old bank statements
Review your recent credit card statement
Keep a copy of your bank statements in a safer place
Keep track of your monthly budget
63
Which of the following are costs associated with owning car?
Fuel
Repairs
Wear & tear fees
Insurance
64
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
65
Municipal bonds are exempt from federal taxes and state taxes
False
True
66
The Federal Reserve System:
was created by Congress to provide a safer monetary sytem
is the central bank of the US
Is who you pay your taxes to
67
Which asset is more liquid?
money in a savings account
a house
money in a certificate of deposit
68
You should reconcile your checking account
every week
every six months
when you get your monthly bank statement
once a year
69
Which type of insurance requires you to have a Primary Care Physician?
PPO
HMO
70
When you buy a ______________, you are loaning money to an organization.
Mutal Fund
Index Fund
Bond
Stock
71
A list of steps needed to reach a career goal
Things needed to do
Plan of action
Steps to success
72
Which institutions give loans?
payday lender
pawn shop
credit union
all
73
Someone gets your tax documents. If this person is not caught, you will likely be a victim of _
murder
identity theft
tax fraud
74
It's important to reconcile your checking account to make sure of mistakes
False
True
