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Part TWO: AL financial literacy exam Flashcards | StudBud
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Part TWO: AL financial literacy exam
Part TWO: AL financial literacy exam
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1
When one invests in a commodity, he is investing in a what?
e-commerce
technology
natural resource
bank
2
Which of the following is the typical amount of time in which a borrower must pay off a mortgage loan?
Eight (8) years
Thirty (30) years
Fifty (50) years
Five (5) years
3
Which of the following positions can confirm signatures to a contract?
executive
notary public
trustee
legal signer
4
If one spends more money than they have in their bank account, they are charged a what?
debt fee
overdraft fee
reserve fee
maintenance fee
5
Federal income tax brackets can be impacted by which of the following?
Region in which taxpayer resides
Marriage status of taxpayer
Voter registration of taxpayer
Criminal history of taxpayer
6
The phrase “balancing a checkbook” refers to which practice?
Comparing bank statem. to withdrawal rec. (checks, ATM) to track spending
Deciding if one has enough money to make a large purchase
Opening a checking account for the first time
Operating a checking account that multiple people use
7
If the value of one’s house increases, all the following will most likely rise EXCEPT:
house insurance
escrow payment
mortgage principal
property tax
8
Which of the following is the term for a person who relies on someone else financially?
Dependent
Beneficiary
Insurer
Policyholder
9
Which financial institutions are criticized for targeting poor & other vulnerable folks by charging high interest rates?
check cashing services
credit unions
pawn shops
payday lenders
10
When a party to a contract does not do what the contract requires, the individual has committed a what of the contract?
Treaty
Ratification
Consideration
Breach
11
When receiving a mortgage loan, if an individual cannot make a large down payment, he will most likely have to pay for:
private mortgage insurance
tenant tax
application fee
risk assessment
12
Which of the following investments is characterized by the following traits:
Bonds
Real estate
Commodities
Stocks
13
When one inspects a banking or credit statem. & discovers several charges he didn't make, he is most likely a victim of:
preemptive payments
high service fees
identity theft
unethical sales practices
14
When planning one’s personal budget, a variable expense is what?
An expense that may change in amount from month to month
An expense in which there are many options to choose from
An expense that one does not have to make
An expense that does not have to be paid immediately
15
Which of the following is an advantage of maintaining a good credit score?
Receive higher interest rates on money in a savings account
Greater chance of receiving a loan with a low interest rate
Credit card companies offer more points in their rewards system
Stocks can be purchased at a lower price
16
The Rule of 72 is used to calculate what?
The amount of money one should save by retirement
The amount of credit one needs for a good credit report
The amount of time it will take for an investment to double in value
The amount of taxes owed for every $72 invested
17
Which financial institutions may someone visit to get $ from a check if he doesn't have a traditional bank account?
check cashing service
payday lender
credit union
mortgage company
18
Sales tax amounts are generally established by which of the following?
business and federal rates
federal and state rates
federal and local rates
state and local rates
19
Which of the following practices could negatively affect one’s credit score?
Reaching the spending limit on one’s credit account
Paying bills on time
Protecting against fraud and identity theft
Monitoring one’s credit report
20
Which of the following investments is characterized by the following traits:
Exchange-traded fund (ETF)
Bonds
mutual funds
savings accounts
21
Which allows a customer to pay a deposit on an item, and then not receive the item until the balance is paid in full?
portion payment
credit card
increment investing
layaway plan
22
When eating at a restaurant, one must consider which additional costs to the price of his meal and sales tax?
service fee
tip
interest fee
reservation cost
23
Banks offer the service of a safety deposit box, which can be used for what?
Prevent the bank’s money from being burned in a fire
Guarantee high interest on money deposits
Reduce the amount owed on late fees
Protect personal documents from potential loss
24
Which of the following is the correct sequence in the formation of a contract?
Offer, acceptance, agreement, consideration
Offer, acceptance, consideration, agreement
Agreement, consideration, offer, acceptance
Offer, agreement, acceptance, consideration
25
Rent-to-own agreements can negatively impact consumers because:
Consumers are limited from purchasing similar items
Consumers will pay a high interest rate on the item
Consumers can immediately have access to the item
Consumers do not have to pay cash for the item
