WISE Test Review #1

The Rule of 72 is an easy way to

• Approximate your savings balance each year

• Calculate how fast your savings will double in value at given interest rates

• Calculate how much tax you will owe on the interest earned

• Calculate the length of time it takes to pay off a credit balance

What is the correct difference between simple and compounding interest

• Simple interest is paid on the principal and interest earned and compounding interest is paid only on the principal

• Simple interest is paid on the principal only and compounding interest is paid on the principal and the interest earned

• Simple interest is paid at a fixed interest rate and compounding interest is paid a variable changing rate

• There is no difference between simple interest and compounding interest

Which of the following would yield the highest earnings when interest is compounded?

• Daily

• Semi-annually

• Bi-annually

• Annually

Apple is offering a fixed interest bond to its customers, the role of the customer is best defined as

• The customer is borrowing money from apple to be repaid after the bond "matures"

• The customer is lending money to apple to be repaid after the bond "matures"

• The bond is the same as stock ownership and if Apple has a profitable year, Apple will give out a dividend to the bond customer

Which loan is NEVER forgiven with any type of bankruptcy

• Car Loan

• Mortgage Loan

• Student Loan

• Payday Loans

How many days notice to credit card companies have to give if they are changing your interest rate due to multiple late payments?

• 25 days

• 35 days

• 45 days

• 55 days

Which classification of stock would be defined as big, established companies like Amazon & Google

• Blue Chip Stocks

• Growth Stocks

• Income Stocks

• Speculative Stocks

The quote "don't put all your eggs in one basket" refers to what investing term

• Stocks

• Securities

• Dividend

• Diversification

A 401k is best described as

• a personal retirement account

• a well diversified stock portfolio

• a company provided retirement account

• a savings account provided by banks and credit unions

a 529 savings plan is specifically for what

• Car

• College

• Mortgage

• Retirement