Personal Finance Practice EOC Part 1

Which describes the best way for people to understand trends in their spending?

• analyzing all expenditures

• saving 10% from each paycheck

• tracking automatic bill payments

• keeping receipts for all purchases over $10

Which payment method is most often used when purchasing a home?

• cash

• check

• mortgage

• credit card

Which feature of using a local bank or financial institution is an advantage for account holders?

• free ATM access

• short lobby hours

• not federally insured

• limited customer service options

What guarantees that sufficient funds for a payment exist in a bank account?

• deposit ticket

• check register

• certified check

• personal check

Tyler is unable to visit the bank during business hours to deposit his paycheck, so he must drop the check into the night depository. Which type of endorsement should he use on the check?

• special, because he is using a special method of deposit

• blank, because the paycheck is made payable only to him

• restrictive, because he is not presenting the check in person

• none, because the bank will automatically deposit the check

Jackson could not find his debit card but assumed he had misplaced it and would eventually find it. He did not look at his next bank statement when it arrived because he was too busy. When he did reconcile his account, he discovered that someone had used his debit card. Jackson contacted the bank and was told that he would be responsible for $500 of the unauthorized transactions. Which statement best explains the bank's response?

• Debit cardholders must be able to prove they did not authorize transactions.

• Debit cardholders must contact a bank within 48 hours of discovering a card is missing to avoid liability.

• Debit cardholders are responsible for all unauthorized charges if they do not report a missing card within 60 days.

• Debit cardholders are responsible for a specified amount of unauthorized charges if they report a missing card between 48 hours and 60 days.

The Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA) both guarantee to protect accounts containing up to

• $50,000

• $100,000

• $250,000

• $400,000

Transportation maintenance costs include fuel and oil changes. Which other expense would be included in this category?

• tires

• speakers

• sunglasses

• window tint

Why do insurance companies create policies?

• to assist individuals in a crisis

• to postpone payment for a loss

• to help plan for natural disasters

• to provide coverage for unexpected financial loss

Which statement best explains why Carmen would increase the deductibles on her auto insurance policy?

• to reduce her premium

• to increase her coverage

• to eliminate her liability risk

• to stop worrying about accidents