Wise Financial Literacy Test (Practice Test)

Why does a corporation issue bonds to the public?

• it wants to borrow money and is willing to pay interest on the loan

• it wants to lend money and to collect interest on the loan

• it wants to decrease the price of its stock

• it wants to increase the price of its stock

A budget should include a person's:

• credit score

• net income and expenses

• investment portfolio

• gross income and assets

A benefit of buying term life insurance as opposed to whole life insurance is that term insurance usually:

• offers a greater amount of insurance coverage for a specific period of time at a lower cost

• builds more cash value over time for the policy holder

• provides lifetime insurance coverage for a fixed cost per year

• combines lifetime insurance coverage with an opportunity for building savings at a reasonable cost

If you make a cash deposit for $10,000 or more in your bank account, your bank is obligated to notify:

• your bank's home office

• the Federal Reserve Bank for your region/district

• the US Treasury Dept.

• the FDIC

Sometimes a vendor or creditor may ask you to pay a bill with a certified check; you will have to get a certified check from your local:

• grocery store

• US post office

• western union

• bank or credit union

When making a list of your liabilities a person should include:

• stock investments

• checking account balances

• mortgage loan

• money market account balance

An advantage of requesting a free annual credit report is that the person can

• determine personal net worth

• check the report for errors

• earn higher interest on savings

• use the report to request a salary increase

Money in the form of cash or currency acts as a:

• way to equalize income

• method to regulate spending

• medium of exchange

• symbol of democracy

When you receive an inheritance or money from a life insurance policy you are the:

• receiver

• beneficiary

• first born

• holder

A woman is offered two jobs; one with a salary of $27,000 plus benefits and the other at $30,000 with no benefits. It would be a wise financial decision for her to take the:

• $27,000 job, if the benefits package is worth more than the $3,000 difference in salary

• $27,000 job, because her taxes will be lower

• $30,000 job, since she has no need for medical benefits because she is healthy

• $30,000 job, because if she is making a higher salary, she is guaranteed quarterly sales increases