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