stud
bud
Sign up
Log in
Home
Library
Explore
SAT
More
Financial Literacy: Prep for the W!SE Flashcards | StudBud
Explore
/
Financial Literacy: Prep for the W!SE
Financial Literacy: Prep for the W!SE
100 terms
·
StudBud Administration
·
375 plays
Financial Literacy Review from Everfi and MoneyPower #financialmgmt #wise #review
Flashcards
100 cards
F
Practice quiz
P
Host live
L
Questions
100
Answers
1
A pharmacy is to drugs as the American Stock Exchange is to:
Securities
Mutual funds
Interest
Stock advisors
2
Where can you find information about Financial Aid?
College Financial Aid Officer
Counselor
Online
Town hall
3
Which of the following is considered to be open-end credit?
a car loan
installment loan
a bank or store credit card
a mortgage
4
Which is the correct order of investments from
Lowest
risk to
Highest
risk?
Diversified mutual fund−Treasury bond−Stock
Treasury bond−Diversified mutual fund–Stock
Treasury bond−Stock−Diversified mutual fund
Stock−Treasury bond−Diversified mutual fund
5
Insurance can help you:
reduce the chances of getting into accident
minimize monthly expenses
protect against unexpected accidents
cover all out of pocket costs
6
What is a recession?
A period when the economy goes down
A period when the economy goes up
A period of economic prosperity
7
Which is less expensive, term or whole life insurance?
Term
Whole
8
Which of the following are NOT deductions on a typical paystub:
Medicare tax
State Income Tax
Social security tax
Sales tax
9
The main trade-off that all investors must consider is:
stocks vs bonds
income vs cost
risk vs return
diversity vs uniformity
10
The return investment (ROI) from education is typically the highest for:
A college applicant
Someone with a 4-year degree
A high school graduate
Someone with a 2 year degreee
11
A business owned by a group of stockholders
Partnership
Corporation
Sole proprietor
Wall Street
12
What is not included in a homeowner's insurance policy?
wind damage
flood damage
broken glass
hail damage
13
T/F: With a perfect budget, total income = total expenses.
True
False
14
Which document puts you at the least risk of identity theft?
paycheck stubs
Cash receipts
Pre-approved credit card offers
Old tax records
15
Which of the following are offered through a bank?
Stock
Mutual Funds
Certificates of Deposit
Money Markets
16
When you buy a ______________, YOU are lending money to an organization.
Stock
Mutal Fund
Bond
Index Fund
17
An advantage of holding on to an investment for more than one year is that
money earned on the investment will be considered tax-free
fees will not be charged by brokers for selling the investmt
it is out of the way of temptation..
capital gains on the investmt will have a lower tax rate.
18
T/F: A tax exemption is the same as an allowance.
True
False
19
In terms of their finances, when a couple has a baby, they will
need to obtain a W-2 form for the baby.
automatically start paying S. S. payments for the baby.
receive an additional tax exemption because of the baby.
have to file a separate income tax form for the baby.
20
Which type of insurance requires you to have an in-network physician?
HMO
PPO
21
Insurance can help you:
protect against unexpected accidents
cover all out of pocket costs
reduce the chances of getting into an accident
minimize monthly expenses
22
One of the reasons cigarettes are so expensive is that
the tobacco supply is controlled by the FTC.
the tobacco industry imports most of the tobacco.
the government imposes a vice or sin tax on them.
their cost is controlled by the Food and Drug Admin (FDA).
23
The profit made from stocks is known as
profit.
dividends.
capital gains.
shares.
24
Purchases made with your debit card are usually:
Deducted from your credit card balance
Put on your credit card bill as a cash advance
Added to your credit card balance
Deducted immediately from your checking account
25
The largest secondary market for stocks/securities in the U.S, is the_________.
New York Stock Exchange
AMEX
NASDAQ
Dow Jones
26
Which of the following institutions give loans?
all are correct
pawn shop
credit union
payday lender
27
What of the following investments has the highest risk?
Penny stock
Blue chip stock
Savings Account
28
Which asset has the highest liquidity?
a U.S. savings bond
money in a savings account
money in a certificate of deposit
a house
29
The M in SMART goal stands for
marketable.
moderate.
measurable.
meaningful.
30
The tax form you fill out when first employed and claiming your exemptions.
F4
W4
1040EZ
W2
31
What is a company's primary reason to issue shares of stock to the public?
distribute the risk of bankruptcy to the investors
increase investor awareness of the company
to help investors earna high rate of return
to raise money to grow the company
32
A_________is generally considered an appreciating asset bcuz it will_________in value over time
car; decrease
house; decrease
house; increase
car; increase
33
What is a credit union?
Where people with bad credit acquire loans
Non-profit institution that is owned by its members
It's the same as a bank
34
When a person brings an item to a pawnshop to obtain cash, the transaction is considered
an unsecured loan.
a custodial payment.
an collaterized loan.
a sales agreement.
35
It's important to reconcile your checking account with your bank statement,
False
True
36
A few things auto comprehensive covers is
another car, deer
vandalism, hail
uninsured and underinsured driver
37
Capital gains are exempt from federal state taxes
True
False
38
The R in SMART goal stands for
reachable.
reliable
revelant.
reasonable.
39
Which of the following covers damage to YOUR car when you cause an accident?
Comprehensie
Collision
Liability
Collateral
40
Which investment offers the lowest risk?
Bonds
Savings Account
Stocks
41
Which choice is better for the insured - actual cost value or replacement value?
Replacement value
Actual cost value
42
What is deflation?
when the general level of prices goes up
The rate at which the general level of prices goes down
When there is a reduction in the supply of money or credit
43
T/F: One can write a check (as many as 3) against their money market account.
True
False
44
The ______ tells you how many years it will take an investment to double.
Doublemint twin rule
Rule of 72
Bank
45
Before the Kiss Corporation can issue stocks or bonds, it must register the issue with:
The Securities and Exchange Commission (SEC)
Its Board of Directors
The Federal Reserve
The World Bank
46
The person who you go to to invest in a mutual fund is a
banker.
professional portfolio manager.
stock broker.
financial actuary.
47
When you buy insurance, you and the insurance company are_______________.
breaking the law
sharing the risk
entering into a contract
48
The federal law that requires the cost of credit be disclosed to consumers is
Equal Credit Opportunity Act
Fair Debt Collection Practices Act
Fair Credit Reporting Act
Truth in Lending Act
49
Diversification is __________.
having compound interest.
buying many different types of investments to have less risk
buying one type of stock
50
Bankruptcy also known as Liquidation Bankruptcy.
Chapter 11
Chapter 7
Chapter 13
Chapter 5
51
What are the three major credit report bureaus?
Credit Karma, Credit Fax, Car Fax
Equifax, TransUnion, Experian
TransUnion, Credit Karma, Experian
Credit Fax, Equifax, Transunion
52
An investment portfolio should always be diverse.
True
False
53
A creditor may deny credit because of
Bad credit history
Marital status
Political affiliaion
Age
54
Raising your insurance deductible (out of pocket cost) will result in
higher premiums.
higher group risks.
lower interest rates.
lower premiums.
55
Which of the following can help you keep your auto insurance premiums down?
Buy a red car.
Make good grades.
Decrease your deductible.
Increase your deductible.
56
When depositing more than $10,000 into the bank _______________ must be notified.
the Federal Reserve
the Secret Service
Internal Revenue Service
the FDIC
57
Compound interest allows the principal to grow at a(n) ____ rate than simple interest.
exchange
faster
slower
58
Which factor would most likely tncrease the interest rate on a person's credit card?
total amount charged
number of purchases
late payments
number of cash advances
59
Which is an example of an installment loan?
monthly mortgage payment
monthly credit card payment
monthly car payment
monthly utility payments
60
You have homeowner's insurance but want to ensure coverage on a $2000 media center. You should
add on a rider or floater.
purchase a home security system.
increase your premium.
have a watch dog.
61
When you purchase a municipal bond, you are:
loaning money to a city
investing in an index fund
diversifying your portfolio
62
Which of the following insures the money people deposit at the bank?
FICA
SEC
FDIC
FICO
63
Jan pays $70 each month for her auto insurance policy.This regular payment is called a:
premium
co-pay
deductible
claim
64
What does FICO stand for?
Fair Issac Corporation
Financial Institution Consortium
Fair Isle Corporation
Federal Income Collateral
65
What is a mortgage?
A type of loan used to buy property
A type of rent used to pay for housing
A measure of the value of a home
A measure of your credit rating
66
How much should you pay for coverage monthly? Premium $300 month; deductible $500
$200
$800
$300
$500
67
Which type of life insurance never expires as long as you pay your premium?
Whole
Term
68
What is the major responsibility of the Federal Reserve?
to oversee the Internal Revenue Service
to print currency
to be the central bank of the U.S.
to manage monetary policy
69
Which of the following is a timed deposit investment?
Savings account
Precious metals
Stock
Certificate of Deposit
70
Which represents the most secure PIN creation?
made up of your first initial and last namae
use a random selection of letters and numbers
use the name of a friend, family member, or pet
using your birthdate
71
What are pensions and 401(K)s?
Taxes you pay
Insurance you buy
Ways to save for retirement
72
Which of the following is NOT a basic peril on an insurance policy?
Falling Aircraft
Hurricane
Wind
Bungee Jumping
73
What is the safest way to dispose of old bank account statements?
Shred them in a paper shredder
Keep them bundled together in a folder
Put them in the trash unopened
Throw them out in trash
74
To know the time value of depositing $100 in an account, a person must know interest rate and
whether the bank offers overdraft protection.
the rate of inflation
her total income.
whether the account is FDIC protected.
75
What is liquidity in business?
how quickly you can convert an asset to cash
ice that has melted
money invested in a house
76
When you purchase an item in a store, you may be charged__________.
property tax
sales tax
capital gains tax
income tax
77
If you budget $200/month for clothes but you spend less, you have a
an income overage.
a budget variance.
a budget deficit.
an outflow deficit.
78
Buying a treasury bill (T-bill) is best for investors who are looking for
a secure, low risk investment.
a higher yield on investment than corporate bonds offer.
an investment that matures in 10-30 years.
a place to invest between $100-$500.
79
If the person chooses to reinvest an earned dividend, this means it will go towards buying
stocks that are similar to those already owned.
bonds in the corporation.
more of the same stock.
preferred stock in the corporation.
80
Which of the following represents the three main C's of credit?
Character, capacity, collateral
Capacity, character, capital
Character, conditions, capacity
Capacity, character, conditions
81
Corporate bonds are exempt from federal taxes and state taxes
True
False
82
A bankruptcy can appear on a person's credit report for as long as
8 years.
10 years.
5 years.
20 years.
83
The form you complete to determine how much tax to withhold from your paycheck is the_______.
1040 EZ
1099
W-2
W-4
84
Committing money to an enterprise in order to earn a financial return is known as___.
Investing
Plan of action
Income
Saving
85
Which of the following is generally true about a 401(k) retirement plan?
it is a plan offered through employers
it restricts when you can withdraw your money
it offers some tax benefits
all are correct
86
Which is better, a bull market or a bear market?
Bear
Bull
87
Which statement is
false
about most ATM's?
You must have an account with a financial institution.
You can get cash 24 hours a day, seven days a week.
You can obtain info about your acct balance.
You can always get cash anywhere in the world with no fee.
88
Carmen sold her stock for a higher price per share than she bought it for. She realized a
capital gain.
dividend.
capital loss.
capital surplus.
89
When buying stock in a company, you are:
diversifying your portfolio
loaning money to a company
investing in an index fund
buying a portion of the company
90
You own 30 shares of X, bought it at $30, and it is now $60. It splits. What do you have now?
60 shares valued at $30
60 shares valued at $15
15 shares valued at $60
91
The lower the credit to debt ratio the
more liquid assets the person has.
better off financially the person is.
less liquid assets the person has.
worse off financially the person is.
92
Which endorsement does this illustrate?
restrictive endorsement
special endorsement
blank endorsement
optional endorsement
93
What is a cashier's check?
A check guaranteed by the bank that then writes the check
A check you receive from your friend out of their checkbook
A check you write to the bank
94
Discretionary income is:
The difference betw total income and basic living expenses
Income that has been spent
Wages plus investment income
A capital gain
95
Which of the following will charge the highest interest rate?
Credit unions
Banks
Pawn shops and payday lenders
96
The value of today's money is based on
Federal Reserce policy.
gold bullion
good faith
97
What protects the person's car you hit when you are in a car accident?
liability
collision
rider
comprehensive
98
Which of the following has the most influence on your credit score?
Your payment history
Your amount of total debt
Your number of credit accounts
Your credit to debt ratio
99
Which earns you more money over time?
Simple interest
Compound interest
Multiple
100
It's best to start saving for retirement when you're about 15 years away from retirement
False
True
