What is one potential benefit of obtaining a college degree when it comes to job opportunities?

It may increase earning potential.

It may limit career opportunities to specific fields.

It may increase the chances for entrepreneurship.

It may hinder networking and social opportunities.

Which of the following financial objectives is an example of a SMART goal?

I will save $500 each month for the next 12 months to build an emergency fund.

I plan to buy a new car next year.

I hope to become a millionaire someday.

Which element is necessary for establishing a financial goal?

Set a time limit in which the goal will be achieved.

Get input from a financial specialist.

Focus on goals that quickly increase your net worth.

Establish an emergency fund before focusing on financial goals.

To support the creation of a realistic budget, a person might

review past expenses and income to determine spending patterns.

make impulse purchases without tracking expenses.

set a monthly spending limit but regularly exceed it.

request digital copies of financial statements and bills.

A person might adjust their budget to

accommodate changes in income or expenses.

spend more money on impulse purchases.

keep spending within a predetermined limit.

ignore financial statements and bills.

What might a person do if they consistently spend less than budgeted?

Allocate the excess funds towards savings or debt repayment.

Increase their spending on non-essential goods and services.

Add the excess funds to their entertainment budget.

Which equation illustrates a balanced budget?

Total expenses + savings = total income.

Total income = total expenses - savings.

Gross income = variable expenses + fixed expenses.

Which statement best reflects how a person should approach the creation of an emergency fund?

As soon as possible, deposit 3-6 months of income in a savings account.

Pay off all debts then deposit 3-6 months of income in a certificate of deposit.

Invest 6-12 months of income in stocks and bonds before making a major purchase.

Keep 3-12 months of income in cash in your home for ease of access.

Which of the following best illustrates the concept of pay yourself first?

Putting a portion of income into savings before paying bills or discretionary expenses.

Spending all income on daily expenses and saving whatever is left at the end of the month.

Setting up a direct deposit instead of receiving a paper check from your employer.

Borrowing money to cover major purchases.

Which of the following is considered a variable expense?

Homeowner’s insurance premium.

This agency seeks to control inflation by influencing interest rates.

Security and Exchange Commission (SEC).

Federal Deposit Insurance Corp. (FDIC).

Financial Industry Regulatory Authority (FINRA).

Which of the following is an example of the Rule of 72?

A person invests $1,000 at a rate of 9%. After 8 years the value of the investment is $2,000.

The maximum term of repayment for an installment loan on a new vehicle may not exceed 72 months.

A person takes out a loan in the amount of $1,000 with an APR of 6% over 72 months. They will pay $120 in interest over the life of the loan.

When considering a normal inflation rate, the cost of breadbasket goods will double every 72 months.

By increasing the interest rate, the Federal Reserves

Discourages spending or borrowing to influence the rate of inflation.

Encourages spending or borrowing to influence the rate of inflation.

Strives to increase the rate of employment.

Which of the following statements best describes the benefit of contributing to a 401(k)?

Contributions to a 401(k) are matched by your employer, up to a certain percentage, increasing your retirement savings.

401(k) contributions are taxed immediately, reducing your take-home pay.

401(k) contributions have no impact on taxes until retirement age.

Contributing to a 401(k) increases your monthly expenses.

Which of the following best describes what financial planning allows a person to do?

Manage income and expenses effectively to achieve financial goals.

Spend money freely without worrying about future consequences.

Guarantee sufficient funds to achieve short-term financial goals.

Rely on credit cards and loans for major purchases.

Which of the following choices lists assets from MOST liquid to LEAST liquid?

Savings accounts, certificates of deposit (CD), real estate.

Money market accounts, bonds, checking accounts.

Stocks, savings accounts, money market accounts.

Bonds, real estate, certificate of deposit (CD).

A person writes a check for $250. They have no overdraft protection and a current account balance of $175. Their bank will likely

return the check because of insufficient funds and charge a fee.

pay the check and ask the customer to make an additional deposit.

set up a loan for the difference.

Close the person’s bank account.

Which of the following best describes the difference between a debit and credit card?

Debit cards allow you to spend money that you already have in your bank account, while credit cards allow you to borrow money up to a certain amount.

Debit cards have higher interest rates compared to credit cards.

Credit cards are linked to your checking account, while debit cards are linked to a line of credit.

Debit cards require a credit check, while credit cards do not.

Which statement best describes a credit union?

A non-profit organization that offers financial services to its members.

A for-profit organization that offers financial services to the public.

A government agency that regulates banking practices.

A corporation that extends credit to its members and the public.

What is the primary purpose of banks?

To safeguard money and provide financial services.

To provide storage for valuable assets.

A restricted endorsement typically includes __________.

A person’s signature and “For Deposit Only.”

A person’s signature and account number.

The date and the person’s address.

The date and “Pay to the Order Of.”

Why might a person place a stop payment on a check?

To cancel the check and prevent it from being cashed.

To authorize payment of the check.

To increase the amount of the check.

To speed up the processing of the check.

What might be a factor influencing the way a person chooses a bank?

The bank’s location and accessibility.

The number of employees working at the bank.

The gift or promotion for opening an account.

The bank’s social media presence.

What may be considered a benefit of online banking?

Convenient access to account balances and transactions.

Constant access to a personal banker.

Protection of sensitive information.

Electronic funds transfer refers to

A method of transferring funds between bank accounts using a mobile device.

The process of withdrawing cash from an ATM.

A service provided by banks to exchange physical checks.

A process of physically depositing cash into a bank account.

The _______ provides insurance on bank deposits up to a value of _______.

Securities and Exchange Commission; $250,000.

Federal Deposit Insurance Corporation; $250,000.

Internal Revenue Service; $100,000.

A person can establish credit by

Making timely payments on loans and bills to build a positive credit history.

Opening multiple bank accounts to build a strong financial history.

Accumulating debt on credit cards from multiple lenders.

Avoiding all forms of borrowing to maintain a pristine credit record.

The cost of borrowing money annually, including interest and fees.

The number of payments required to pay off a loan.

The total amount of money borrowed.

The amount of money earned on a deposit.

An installment loan is a loan ________.

Where the monthly payment is the same over the repayment period.

That must be repaid in full within a short period of time.

Used to pay for upgrades to a person’s primary residence.

Where a person makes a minimum payment monthly to keep the loan current.

The primary purpose of insurance is to ____________________.

Provide financial protection against unforeseen events.

Make a profit for insurance companies.

Why is diversification important in financial planning?

To minimize the risk of loss from any single investment.

To maximize returns on investments.

To guarantee a steady income stream.

To eliminate the need for monitoring investments.

Which statement best defines a mutual fund?

An investment portfolio that pools money from multiple investors to invest in stocks, bonds, and other assets.

A type of individual retirement account.

A loan provided by a bank for purchasing a home.

A company issues stock to ____________.

Raise capital for investment and expansion.

A company issues bonds to the public to ____________.

Increase the number of shareholders.

When a person reconciles a bank account, they

Compare the bank statement with the account holder's records and make any necessary adjustments.

Withdraw money from the account.

Deposit money into the account.

Request overdraft protection to avoid paying bank fees.

What is the potential advantage advantage of using a direct deposit for receiving a paycheck?

It provides an opportunity to earn interest on paycheck.

W!SE Pre-Test

Quiz

•

Financial Education

•

11th Grade

•

Practice Problem

•

Medium

Shirley Wiles

Used 34+ times

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Social Security, Medicare, State and Federal income taxes.

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Which of the following is a good example of making a financial “trade-off”?

Your take-home pay, or net income, is __________.

If the inflation rate is 3%, how will it affect the purchasing power of someone typically spending $200 on consumer goods?

A person makes $500 a week and receives a paycheck of $447. The amounts of $500 and $447 represent the person’s __________ and __________, respectively.

If a person increases the number of withholdings on their W4 form, their paycheck will __________.

What is the potential advantage of using a direct deposit for receiving a paycheck?

Which answer choice reflects the mandatory federal payroll deductions that are typically withheld from an employee’s paycheck?

What is one potential benefit of obtaining a college degree when it comes to job opportunities?

Which of the following financial objectives is an example of a SMART goal?

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A person makes $500 a week and receives a paycheck of $447. The amounts of $500 and $447 represent the person’s and , respectively.