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FINANCIAL FOOTBALL QUESTIONS

1. ____ occurs when interest on an adjustable rate mortgage exceeds the loan amount.

a. Compound interest

b. Negative amortization

c. Interest income

d. Variable interest

2. ______ is an example of a "need" expense rather than a "want" expense:

a. A new watch

b. Going to a movie

c. Apartment rent

d. A mobile phone ring tone download

3. __________ is a good way to save on monthly expenses:

a. Canceling your electric utility

b. Buying jewelry online

c. Watching less television

d. Eating at home

4. __________ is what you give up when choosing one investment over another:

a. The time value of money

b. Personal risk

c. Opportunity cost

d. Spontaneity

5. "Cost basis" refers to:

a. The load of a mutual fund

b. The original value of an asset

c. The lowest a stock has dropped since the purchase date

d. The cost of real estate, minus realtor fees

6. "Cost of carry" refers to:

a. Improvement costs on rental real estate

b. Mortgage interest paid over time

c. The required return for a capital budgeting project

d. Out-of-pocket costs associated with an investment

7. "Rate shopping" for a mortgage:

a. Lowers your access to credit

b. Is performed by your accountant

c. Is a waste of time

d. Enables you to find the best rate

8. $1,000 earning 5% interest compounded quarterly will be worth _____ in 10 years.

a. $1,050

b. $1,644

c. $2,164

d. $2,264

9. Bankruptcy involves a court proceeding to:

a. Dispute fraud

b. Relieve a debtor of liability

c. Resolve credit card discrepancies

d. None of the above

10. A benefit to paying bills online is:

a. Convenience

b. Saving money on stamps

c. Easier to pay bills on time

d. All of the above

11. A bounced check:

a. Has been cashed twice

b. Does not have enough money in the bank to cover it

c. Is a mistake and is voided

d. Was used to purchase an item you later returned

12. A budget includes:

a. Monthly income

b. Fixed expenses

c. Variable expenses

d. All of the above

13. A budget:

a. Compares your monthly income and expenses

b. Shows your checking account balance

c. Is something you get from your bank

d. Only applies to businesses and the government

14. A cancelled check is one that:

a. Is a mistake and has been voided

b. Has been cashed twice

c. Does not have enough money in the bank to cover it

d. Has been cashed and deducted from your account

15. A capital gains tax is:

a. A tax imposed on banks when they make a profit

b. Charged on the profit from assets purchased at a lower price

c. Waived if you are over age 65

d. Is a tax charged in the nation's capital

16. A car loan is an example of:

a. Single payment credit

b. Revolving credit

c. Installment credit

d. Permanent credit

17. A cardholder agreement:

a. Lists the terms and conditions of your credit card account

b. Includes information on your annual percentage rate

c. Details any applicable fees

d. All of the above

18. A cash advance is:

a. Loaded onto a prepaid card before using it

b. A cash reward for using your debit card

c. Money you withdraw from your savings account

d. Cash you can borrow from a bank using your credit card

19. A certificate of deposit is:

a. A low-risk savings option

b. A high-risk savings option

c. A high-risk investment option


20. A charge-off happens when ________ assumes the loan balance will not be paid.

a. A lender

b. A landlord

c. An employer

d. A credit bureau

21. A check card is the same thing as:

a. A gas card

b. A debit card

c. A credit card

d. A membership card

22. A credit card grace period:

a. Applies to cash advances as well as purchases

b. Is the date your payment is due

c. Is also called "float"

d. Is a period during which you are not charged interest

23. A credit card is an example of:

a. Single payment credit

b. Installment credit

c. Revolving credit

d. Permanent credit

24. A credit card issuer:

a. Is lending you money every time you use your credit card

b. Evaluates how risky a borrowing prospect you are

c. Decides if you are approved for a credit card

d. All of the above

25. A credit card late payment fee:

a. Can throw off your monthly budget

b. Is charged when bill is paid past the due date

c. Can affect your credit worthiness

d. All of the above

26. A creditor is someone:

a. To whom you lend money

b. Who lends you money

c. Who pays you interest on a loan


27. A debit card can be used to pay for:

a. Groceries

b. Gas

c. Mobile phone bill

d. All of the above

28. A fair debt-collection practice would be to:

a. Pretend to be a salesperson to collect a debt

b. Threaten legal action to collect money owed

c. Continually call a debtor at work

d. Call a debtor at home within allowable hours

29. A finance charge is:

a. The fee a financial planner charges

b. A charge for being overdrawn

c. Interest charged on your credit card balance

d. A fee for buying stock

30. A fixed expense is:

a. An expense that once was broken

b. A utility bill, for example

c. A bill amount that stays the same every month

d. Something to be cleared off your credit history

31. A good credit card habit to decrease your debt is:

a. Avoid making new purchases

b. Pay each month's bill in full

c. Don't charge your credit card up to your credit limit

d. All of the above

32. A good debt-reduction strategy is to first pay down:

a. Your mortgage

b. Your car loan

c. Your credit card balance

d. Your student loan

33. A good way to start saving is to put aside money from:

a. Change you collect

b. A part-time job

c. A birthday check from a relative

d. All of the above

34. A hidden job cost might include:

a. Gross pay

b. Work uniform fees

c. Employee discounts

d. Retirement benefits

35. A history of making late payments will have _________ on getting future loans.

a. A negative impact

b. A positive impact

c. No impact

d. A mixed impact

36. A household cash flow worksheet is used to:

a. Determine the value of your home

b. Adjust your gross annual household income

c. Determine your tax filing status

d. Create a monthly budget

37. A key difference between credit unions and banks is:

a. Banks usually pay higher interest on savings accounts

b. Credit unions are usually member-owned

c. Bank debit cards are more widely accepted

d. All of the above

38. A landlord will return your apartment security deposit:

a. After the first month you've paid rent

b. After the first six months

c. When you move out, minus any fees for damages

d. Never

39. A lien can have a __________ effect on your ability to get credit.

a. Neutral

b. Positive

c. Negative

d. Non-negotiable

40. A load fund is a mutual fund:

a. That requires purchase of a specific number of shares

b. That accrues tax-exempt dividends

c. That is made up entirely of bonds

d. That charges a fee each time a share is bought or sold

41. A low-risk savings option is:

a. Stock in a company

b. Mutual fund

c. Lottery ticket

d. Savings account

42. A mortgage broker helps you to:

a. Obtain a home loan

b. Buy stocks and other investments

c. Manage your retirement savings

d. Broker your assets

43. A prepaid card:

a. Deducts charges from your checking account

b. Deducts charges from your savings account

c. Deducts charges and fees from your checking account

d. Deducts charges from the card balance

44. A prepaid card:

a. Charges lower finance charges than a credit card

b. Cannot be used in a store or for online purchases

c. Deducts money directly from your bank account

d. May charge a monthly fee

45. A responsible savings goal would be:

a. Spend $5 a week in music downloads

b. Save at least 10% of what you earn

c. Save for a new video game

d. Eat out once a week instead of twice

46. A savings account is opened at:

a. A bank or credit union

b. School

c. Work

d. The post office

47. A savings account pays you:

a. A fixed amount every month

b. Interest on your account balance

c. With rewards points

d. Ten percent of your account value per year

48. A short-term way to improve your creditworthiness is:

a. Close your credit card accounts

b. Work out a payment plan with your card issuer

c. Apply for more cards to increase your available credit

d. All of the above

49. A surcharge is a:

a. Charge from your surplus credit balance

b. Fee associated with a financial service

c. Charge associated with a stock purchase


50. Actual cash value (ACV) insurance repairs or replaces insured property:

a. Minus the deductible and depreciation

b. At today's cash value

c. Such as money stolen from your home


51. Adjustable rate mortgages:

a. Are usually harder to qualify for than fixed rate mortgages

b. Are easier to budget for over the long term

c. Have an initial interest rate that changes over time

d. All of the above

52. After disputing a charge with your credit card issuer:

a. Follow up with the merchant directly

b. Wait for proof of your receipt and signature from the store

c. Contact the issuer to confirm the issue was resolved

d. You don't need to follow up

53. An annual fee is charged:

a. Once a year

b. Periodically

c. Monthly

d. Weekly

54. An annual fee is:

a. What credit card issuers charge to use some credit cards

b. Deducted from your checking account

c. The same as an interest rate

d. The same as annual percentage rate

55. An emergency fund is:

a. Insurance that pays medical expenses

b. A fire escape plan

c. A savings plan for unexpected expenses

d. A fund for dining out

56. An example of a credit card fee is:

a. An over-the-limit charge

b. A late payment charge

c. An annual fee

d. All of the above

57. An example of a fixed expense is:

a. Clothing

b. Auto insurance

c. Electric bill

d. Monthly groceries

58. An example of a variable expense is a/an:

a. Car payment

b. Electric bill

c. Mortgage

d. All of the above

59. An example of an expenditure is:

a. An interest rate

b. A savings account

c. A utility bill

d. A municipal bond

60. An example of discretionary spending is:

a. Paying a mortgage payment

b. Paying a finance charge

c. Buying a television

d. Paying rent

61. An example of paying off long-term debt is paying your:

a. Rent

b. Car loan

c. Utility bill

d. Credit card bill

62. An expense is:

a. Something that costs you money

b. Part of your budget

c. A pizza

d. All of the above

63. An index fund is a mutual fund that:

a. Always performs better than the stock market

b. Mirrors the performance of a stock market or sector

c. Balances stocks in large and small companies

d. Can only be traded online

64. An introductory percentage rate offered by credit card issuers is:

a. Connected to a rewards program

b. A low temporary promotional rate that often increases

c. Not available from credit cards

d. All of the above

65. An outstanding check is one that:

a. Has not been signed

b. Has not been cashed

c. Does not have enough money in the bank to cover it

d. Is written in foreign currency

66. A credit card over-the-limit fee is charged when:

a. A debit card purchase exceeds your account balance

b. A credit card purchase is left unpaid

c. You apply for too many credit cards

d. A credit card purchase exceeds your credit limit

67. An unauthorized merchant charge on your credit card is:

a. A charge made without your permission

b. An automatic charge you set up

c. The same as identity theft


68. An unexpected expense would be a:

a. Phone bill

b. Health Insurance bill

c. Car repair bill

d. Heating bill

69. Annual percentage rate (APR) is:

a. Also known as interest rate

b. The annual interest rate on a credit card or loan

c. A finance charge

d. All of the above

70. Anything you own that has value is called:

a. Equity

b. Market value

c. An asset

d. Exchange rate permanence

71. Assuming these people earn the same salary, who needs the most life insurance?

a. A young married man without children

b. A single mother with two young children

c. A single woman without children

d. An elderly retired man with a retired wife

72. Based on the Rule of 72, it will take ___ years to double an investment at 8% interest.

a. 11

b. 10

c. 9

d. 5

73. Auto insurance coverage for damage to your car caused by accidents is called:

a. Property damage

b. Comprehensive

c. Collision

d. Liability

74. Available credit on a credit card or other loan is:

a. The balance due

b. The amount of unused credit available

c. A recent credit card charge

d. All of the above

75. Bankruptcy is _________ to resolving your issues with debt.

a. The first step

b. A last resort

c. A regular practice

d. Not a legal way

76. Being a good credit risk means:

a. You make a lot of money

b. You generally qualify for better interest rates

c. You do not participate in risky sports

d. You open as many credit accounts as possible

77. Borrowers who have not lived up to all loan or credit agreement requirements are in:

a. Compliance

b. Litigation

c. Default

d. Transition

78. Budgeting can have an immediate effect on:

a. Your salary

b. Your spending habits

c. Your tax status

d. Your investment accounts

79. Buying several certificates of deposit with different maturity dates is called:

a. Diversification

b. Laddering

c. Annualizing


80. Buying weekly groceries is an example of a ____________:

a. Variable expense

b. Discretionary spending item

c. Fixed expense

d. Liability

81. By using a debit card rather than a credit card:

a. Money is subtracted from your checking account

b. You cannot carry debt forward to next month

c. You can avoid finance charges

d. All of the above

82. Can a landlord keep an application deposit if a lease was never signed?

a. Yes, but only one-third the deposit amount

b. Yes, if the application states that it is non-refundable

c. Rarely

d. No, this is never legal

83. Capital refers to a person's:

a. Wealth

b. Liabilities

c. Employment history

d. ATM card

84. Changes in the buying power of currency are measured by:

a. The unemployment rate

b. The money supply

c. The consumer price index

d. Interest rates

85. Checking account overdraft protection:

a. Covers transactions when your account has insufficient funds

b. Can be tied to your savings account

c. Generally has a fee for the service

d. All of the above

86. Comparing several credit cards allows you to obtain the:

a. Lowest annual percentage rate

b. Lowest annual fee

c. Best rewards program

d. All of the above

87. Compound interest is interest:

a. Earned from a tax-exempt investment

b. That decreases over time

c. That does not show up on a monthly statement

d. Calculated on the principal, plus interest already earned

88. Consumer spending is more likely to rise when:

a. Unemployment is high

b. Interest rates are low

c. Taxes rise

d. People increase the amount they save

89. Creating a budget helps you:

a. Save money for the future

b. Pay your bills in full and on time

c. Control your spending

d. All of the above

90. Credit cards can:

a. Help you build credit history

b. Charge you interest if you dont pay the balance in full

c. Be used to buy merchandise online

d. All of the above

91. Custodial fees are:

a. Charged when parents establish a trust fund for children

b. Charged on stocks and bonds held for safekeeping

c. A direct result of late payments

d. Not tax-deductible

92. Debt consolidation:

a. Eliminates debts after you have declared bankruptcy

b. Generates income for you from other people's debt

c. Pays off your smallest debt first

d. Merges all your loans into a single loan

93. Deflation is a decrease in:

a. The general level of prices in an economy

b. The purchasing power of money

c. The assets in a country's banks

d. The total number of stock shares available for purchase

94. Depreciation is:

a. Another word for economic depression

b. A side effect of selling something valuable

c. When something loses value

d. Unavoidable no matter what you invest in

95. Direct deposit of your paycheck into a checking account:

a. Saves time

b. Results in an annual fee

c. Can cause impulse spending

d. Is only available from a credit union

96. Discretionary expenses:

a. Are non-essential items you can live without

b. Are always taxed

c. Are usually at a heavily discounted price

d. All of the above

97. Diversification is when you:

a. Spread your money across several types of investments

b. Use more than one bank or broker

c. Purchase stocks in the world's 100 largest corporations

d. Buy real estate in different countries

98. If you are at fault in a car accident, the other driver's injuries are covered by ______.

a. Medical liability coverage

b. Collision liability coverage

c. Bodily injury liability coverage

d. Comprehensive liability coverage

99. Even if you do not own your apartment, it is wise to buy ________ insurance:

a. Home equity line of credit

b. Renter's

c. Small business


100. Filing for bankruptcy could make it harder to:

a. Get a job

b. Rent an apartment

c. Buy a car

d. All of the above

101. Fixed rate mortgages:

a. Have lower interest rates than adjustable rate mortgages

b. Are tied to fixed-income securities

c. Protect you from sudden interest rate increases

d. Are available only from credit unions

102. For 4 hours work, what's the difference between being paid $5 an hour and $7.50 an hour?

a. $7.50

b. $9.50

c. $10

d. $12.50

103. Getting paid bi-weekly means:

a. Every other week

b. Every Monday

c. Twice a week

d. It is illegal to be paid bi-weekly

104. Going into debt means:

a. You owe money

b. Someone owes you money

c. You are saving money

d. You have tangible assets

105. How do stores make money in a loss-leader sale?

a. They sell all inventory at a loss to promote sales

b. They guarantee a lower price than competitors

c. They sell one item below cost so you will buy others

d. They employ fake shoppers to encourage sales

106. How does a larger down payment affect a home mortgage?

a. Lowers the amount borrowed

b. Increases the mortgage amount

c. Reduces loan "points"

d. Has no effect on the mortgage amount

107. How long would it take to save $200 if you put aside 5% of your $100 weekly paycheck?

a. 12 weeks

b. 20 weeks

c. 40 weeks

d. 52 weeks

108. How soon should you report a lost or stolen credit card?

a. Immediately

b. At the end of the business day

c. At the end of the week

d. After your monthly statement arrives

109. Ideally, how much should you save in your emergency fund?

a. A week's pay

b. A month's pay

c. Enough to pay rent for two months

d. Enough to pay three to six months' expenses

110. Identity theft can happen when someone steals your:

a. Credit card number

b. New checks from your mailbox

c. Bank statement

d. All of the above

111. Identity thieves are capable of:

a. Opening a credit card in your name

b. Renting an apartment in your name

c. Getting a car loan in your name

d. All of the above

112. If a $50 pair of running shoes is on sale at 30% off, what is the sale price?

a. $30

b. $35

c. $37.50

d. $42.50

113. If a bank lends you money, you are the:

a. Lender

b. Shareholder

c. Creditor

d. Borrower

114. If a pair of sneakers costs $45 and you have $23, how much more do you need?

a. $12

b. $22

c. $23

d. $27

115. If checks you ordered from your bank do not arrive:

a. Re-order new checks

b. Contact the bank, and get a new account if necessary

c. Change banks

d. All of the above

116. If one of your credit or loan accounts is charged off:

a. You no longer owe that amount

b. It is considered a write-off on your taxes

c. It is sold to a collections agency

d. It is removed from your credit record

117. If you want to switch banks:

a. Open the new checking account before closing the old one

b. Close your old account first, then open the new one

c. Keep both accounts open


118. If someone's creditworthiness decreases:

a. Their tax rate could change

b. They can be paid less by their employer

c. Their debit card fees could increase

d. They may pay more interest for a home loan

119. The best way to save for a down payment on a car is to:

a. Start saving 10% of your income each month

b. Borrow from your parents

c. Get a cash advance on your credit card

d. Invest in the stock market

120. If you cant pay your credit card bill on time, you should:

a. Pay it when you can

b. Put it off until the next month

c. Call your issuer ahead of time to work out a payment plan

d. Pay it with another credit card account

121. If you dont get a receipt after making a purchase, you should:

a. Write down the amount as soon as you get home

b. Return to the register and ask for one

c. Guess what you spent at the end of the week

d. Not worry, as long as you have money in the bank

122. If you experience an unexpected medical expense, the ideal situation is to:

a. Have a credit card

b. Have a credit line with your bank

c. Borrow money from a friend

d. Have sufficient money in savings to cover the expense

123. If you had $25 in your wallet and lost $7, how much would you have left?

a. $8

b. $12

c. $18

d. $22

124. If you have an older credit card account that you only use occasionally:

a. Close it immediately

b. Charge up to its credit limit to avoid cancellation

c. Keep it open to lengthen your credit history


125. Automatic bill pay customers should:

a. Track account balances regularly

b. Pay only the minimum amount due

c. Keep their account PIN in their wallet


126. If you need to withdraw your money on short notice, your best saving option is:

a. A retirement account


c. A certificate of deposit

d. A company stock portfolio

127. If you notice your bills have stopped arriving:

a. You have paid all your bills in full

b. Assume you are getting the services for free

c. You may have had your identity stolen

d. You do not need to pay them

128. If you pay your credit card bill past the due date you will be charged:

a. A cash advance fee

b. A variable fee

c. A late payment fee

d. An overdraft

129. If you receive a tax refund, a good strategy to reduce your debt is to:

a. Put it in your savings account

b. Invest it in company stock

c. Pay down a credit card balance

d. Make a deposit on a vacation

130. If you receive an email from your bank that seems fraudulent:

a. Forward it to your bank to investigate

b. Report it to the police

c. Reply to it just to make sure

d. Delete it but do not report it

131. If you save $2.50 a week to buy a $50 coat, how long will it take?

a. 5 weeks

b. 10 weeks

c. 15 weeks

d. 20 weeks

132. If you save $25 a month, how much will you have after two years, without interest?

a. $225

b. $260

c. $600

d. $825

133. If you save for a down payment on a car loan:

a. You will not be charged late payment fees

b. Your monthly payments will be lower

c. Your mileage will increase

d. Your car warranty term will increase

134. If you use an ATM outside your bank's network:

a. You cannot withdraw money

b. You can transfer funds among your accounts

c. You may be charged a fee

d. You earn rewards points

135. How long would it take to save $20 for a birthday gift, if you saved $1.25 a week?

a. 10 weeks

b. 12 weeks

c. 16 weeks

d. 20 weeks

136. If you withdraw money from a certificate of deposit before the term of maturity ends:

a. Nothing happens

b. Your interest rate goes down

c. You are usually charged a penalty

d. It automatically resets to a new term ending date

137. If you write a check for $100, but you have only $50 in your checking account, you may:

a. Have your account closed

b. Be fined $500

c. Be charged an overdraft fee

d. Receive $50 rewards points

138. To save $300 in a year without earning interest, how much should you save per month?

a. $12

b. $24

c. $25

d. $30

139. If your house is worth $150,000 and you have a $100,000 mortgage, what is your equity?

a. $100,000

b. $50,000

c. $150,000

d. You have no equity

140. If your income varies from month to month, estimate average monthly income by:

a. Asking your boss

b. Multiplying your previous year's income by 12

c. Dividing your previous year's income by 12

d. Dividing your previous year's income by 52

141. How long will it take you to save $40 for a new pet, assuming you save $2.50 a week?

a. 4 weeks

b. 12 weeks

c. 16 weeks

d. 25 weeks

142. The difference between 5% and 7% interest on $150 over a year would be:

a. $3

b. $5

c. $7.50

d. $10

143. In a mortgage, what does a "point" refer to?

a. 1% of the loan amount, paid to the seller

b. 1% of the loan amount, paid to the lender

c. 1% of the purchase price, paid to the seller

d. 1% of the purchase price, paid to the lender

144. In reference to credit, "capital" relates to:

a. assets

b. The level of financial obligations

c. The level of liabilities

d. All of the above

145. In reference to credit, "character" relates to:

a. How long a person has had a checking account

b. How a person handles financial obligations

c. How long a person has had their car loan

d. All of the above

146. In the stock market, a short sale:

a. Is always exempt from capital gains tax

bCapitalizes on a stock price's decline

c. Is the sale of 100 shares or less

d. Capitalizes on a stock price's increase

147. Interest calculated and added once a year is __________ annually:

a. Inflated

b. Compounded

c. Prorated

d. Extrapolated

148. Investments that are difficult to convert to cash quickly have a high ________ risk.

a. Inflation

b. Economic

c. Income

d. Liquidity

149. It helps your credit history when:

a. You go to college

b. You pay your bills on time

c. You apply for as many credit cards as possible


150. It is best to review your checking account statement:

a. Annually

b. Quarterly

c. Only when you think you've run out of money

d. When it arrives

151. It is important to save for retirement because:

a. You will have money to live on when you stop working

b. It is a good investment

c. You won't be able to save when you're older


152. Legal tender cannot:

a. Be used to pay taxes

b. Actually be held; it is a term for non-tangible assets

c. Be considered the same as a debit card

d. Be refused when settling a debt in that same currency

153. Managing your finances includes:

a. Tracking your spending

b. Eating at a restaurant only once a week

c. Downloading music

d. Cashing your paycheck

154. Money held by a third party to complete a transaction is called:

a. A direct loan

b. Liability

c. Escrow

d. Liquid fund

155. Money market accounts are deposit accounts that:

a. Shift between international currencies

b. Have variable fees

c. Are used to buy bond funds at market value

d. Typically pay more interest than savings accounts

156. Most credit card issuers offer ___________ liability for fraudulent charges:

a. Delayed

b. Zero

c. Full

d. Half

157. Multiple requests for new credit can hurt your credit because:

a. It may indicate excessive spending

b. It may indicate that lenders are rejecting your applications

c. It may indicate you have high debt


158. Of these investments, the one with the most risk is:

a. Bond fund

b. Savings bond

c. Corporate stock

d. Corporate bond

159. Of these, _______ usually earn the highest interest rates:

a. Savings bonds

b. Savings accounts

c. Checking accounts

d. Certificates of Deposit

160. On a $500 loan, that $500 is the __________ amount.

a. Principal

b. Interest

c. Budgeted


161. One of the first steps you should take to manage your finances is:

a. Set up a monthly budget

b. Open a credit card account that offers reward points

c. Rent a safety deposit box

d. Buy new clothes if they are on sale

162. One potential result of having a poor credit history is:

a. Lower cost for utilities

b. Lower mortgage interest rate

c. Lien on a checking account

d. Declined loan application

163. One way to ensure you pay your credit card bill on time is to:

a. Call your accountant

b. Consult your parents

c. Set up automatic payments from your bank account


164. Overdraft protection requires:

a. A line of credit linked to your checking account

b. A savings account linked to your checking account

c. Either 1 or 2


165. Potential lenders look at:

a. Your history of how you paid off previous loans

b. Your checking account balance

c. Your savings account balance

d. All of the above

166. Prepaid cards:

a. Do not have a credit line

b. Are safer than carrying cash

c. Can be used the same as a debit card

d. All the above

167. Proprietary credit cards are those that:

a. You do not share with anyone else

b. You never have to give back to the credit issuer

c. Charge a high fee for the privilege of using them

d. Are accepted by only one type of store or company

168. Renter's insurance can protect someone:

a. Against lawsuits from their landlord

b. From paying high rent

c. From loss resulting from items being stolen or damaged

d. From unscrupulous rental agencies

169. Responsible use of a/an __________card builds your credit history.

a. Debit

b. Credit

c. ATM

d. Rewards

170. Reviewing your monthly banking statements helps you to:

a. Manage your investments

b. Learn about your stock options

c. Stay on budget

d. Transfer funds

171. A sustained increase in prices is called:

a. Inflation

b. Price growth

c. Wage increase

d. Spending power

172. Riskier investments ___________than safer ones.

a. Often have higher potential earnings

b. Generally cost more

c. Generally cost less

d. Are taxed less

173. Saving helps you to:

a. Put money aside for a large purchase

b. Plan for retirement

c. Plan for emergencies

d. All of the above

174. Savings account interest is paid in the form of:

a. Money

b. Bookstore rewards points

c. Airline miles

d. Any of the above

175. Secure Socket Layer (SSL) is data protocol used to:

a. Keep your investments safe

b. Keep your belongings safe

c. Insure your car for theft

d. Keep your online transactions safe

176. Secured loans:

a. Require you to pledge an asset as collateral

b. Have higher interest rates than unsecured loans

c. Are also known as signature loans

d. Do not impact your creditworthiness

177. Shares of stock represent:

a. Ownership in a corporation's assets and earnings

b. Ownership in a corporation's earnings only

c. Ownership in a corporation's long-term assets only

d. The assets held by a corporation's board of directors

178. Signing the back of a check is called:

a. Validating

b. Endorsing

c. Clearing

d. Canceling

179. Simple annual interest is:

a. Interest paid annually on only the original principal amount

b. Interest paid on investment earnings

c. Interest paid on a simple annual account

d. Interest paid on a stock investment portfolio

180. The "power of compounding" refers to:

a. The difference between annual and quarterly dividends

b. Reinvested earnings that grow over time

c. a combined checking and savings account


181. The "prime" lending rate is:

a. A rate that fluctuates on a daily basis

b. A rate offered to a bank's most creditworthy customers

c. The average yield on prime securities

d. The interest rate charged on government loans

182. The agreement between a renter and a landlord is a:

a. Security deposit

b. Mortgage

c. Lease

d. Deed

183. The amount that a person or company can borrow and be expected to repay is:

a. Cash on hand

b. Capital

c. Collateral

d. Capacity

184. The charges for settling a real estate transaction are also called _______ costs:

a. Mortgage

b. Possession

c. Closing

d. Selling

185. The difference between a student loan and an educational grant is:

a. Loans pay higher dividends

b. Loans do not need a co-signer

c. Loans must be repaid

d. Grants are from schools and loans are from the government

186. The documents you should shred to protect your personal information include:

a. Credit card bills

b. Marketing mailers

c. Magazines

d. Newspapers

187. To minimize interest expense while paying down multiple debts:

a. Pay the debt with the highest balance first

b. Pay the oldest debt first

c. Pay the debt with the highest interest rate first

d. Any of the above

188. The foreign exchange market exists:

a. Wherever foreigners are allowed to trade

b. Wherever one currency is traded for another

c. Wherever foreign stocks are available for purchase and sale

d. Wherever local currency is accepted

189. The function of a collection agency is to:

a. Pursue delinquent accounts for payment

b. Collect fraudulent charges so you can dispute them

c. Collect taxes from your paycheck


190. The future value formula helps you calculate:

a. The future value of stock investments

b. The future interest rate of money market accounts

c. The amount of interest you can earn on your principal

d. The future amount you can save on your taxes

191. The gold standard refers to:

a. The gold seal embossed on corporate stock shares

b. A set of business practices for banks

c. A system where currency is measured in weights of gold

d. The highest selling stock on a given day

192. The last reported price at which a security was traded on an exchange is called:

a. Market return

b. Market price

c. Perceived value

d. Actual value

193. The minimum monthly credit card payment is:

a. The amount you can afford to pay

b. The minimum payment stated on your bill

c. The minimum amount due on your debit card

d. 20 percent of the outstanding balance

194. The number of hours worked times the hourly wage is called:

a. Take-home pay

b. Net pay

c. Gross pay

d. Overtime pay

195. The purpose of a consolidation loan is to:

a. Deduct amounts you owe from your paycheck

b. Pay off one credit card before the others are paid

c. Combine several debts into one payment

d. Reduce the amount owed on income tax

196. The stock market can rise and fall in:

a. A day

b. A week

c. An hour

d. All of the above

197. The interest earned on $1,000 over 2 years at 10% compounded annually is:

a. $20

b. $200

c. $210

d. $100

198. The World Bank focuses on:

a. Supplementing foreign currencies

b. Lending to developing countries

c. Promoting world peace

d. Borrowing money from wealthy nations

199. To demonstrate creditworthiness a person should:

a. Pay their bills on time

b. File their income taxes

c. Use an ATM several times a month

d. Close old, unused credit accounts

200. To double your money in ten years would require earning a ___ compound interest rate:

a. 7.2%

b. 0.172%

c. 0.72%

d. 0.1%

201. To estimate how long it will take your savings to double, divide 72 by ___________.

a. The principal amount

b. The dividend amount

c. The interest rate

d. The savings account balance

202. To figure out your monthly income when you know your annual salary:

a. Divide by 52

b. Multiply by 52

c. Divide by 12

d. Multiply by 12

203. To avoid identity theft while shopping online:

a. Send your credit card information by email

b. Use your driver's license to verify identity with merchants

c. Respond to all emails that ask you for account information

d. Only order from secure sites that begins with "https://"

204. To participate in a credit or debit card rewards program, you may be required to:

a. Pay an annual fee

b. Have a high balance in your account

c. Make frequent purchases

d. Have high creditworthiness

205. To save money on possible ATM fees, it is best to:

a. Limit your withdrawals to ten a month

b. Withdraw money only from machines in your bank's network

c. Visit an ATM only during business hours

d. Visit the ATM only at your main branch

206. To stay in good credit standing, you should:

a. Apply for as many credit cards as possible

b. Dispute all charges that appear on your bank statement

c. Not allow your accounts to become delinquent

d. All of the above

207. To stay out of debt you should:

a. Stay away from impulse purchases

b. Buy groceries only with cash

c. Shop for a new car loan

d. Borrow money from your bank

208. Total assets minus total liabilities is called:

a. Life savings

b. Net worth

c. Gross value

d. Debt-to-income ratio

209. Unsecured loans:

a. Are a form of personal loan

b. Are riskier to lenders than secured loans

c. Are harder to qualify for than secured loans

d. All of the above

210. Using 10% interest compounded annually, how much would $1,000 be worth after 2 years?

a. $1,100

b. $1,110

c. $1,200

d. $1,210

211. Interest in a savings account:

a. Refers to the name in which the account is opened

b. Is a free gift from the bank

c. Is the money the bank pays you to borrow your money

d. Is a monthly fee charged by the bank

212. If you withdraw money from a certificate of deposit too early:

a. Interest earnings are pro-rated

b. You lose any interest earned to date

c. You may be charged a penalty

d. It is impossible to withdraw money from a CD early

213. What is a financial liability?

a. An obligation you have to pay someone back

b. An obligation someone has to pay you money

c. Your total income

d. An old automobile

214. A student loan origination fee is

a. The same amount as your tuition payment

b. What the lender charges you for processing your loan

c. Based on the loan's interest rate


215. What can be a good type of loan interest when interest rates are low?

a. Variable interest rate

b. Floating interest rate

c. Fixed interest rate

d. Default interest rate

216. What is the easiest way to fix a budget where income is less than spending?

a. Increase income

b. Reduce spending

c. Reduce taxes

d. Increase interest earned

217. What is the first step in settling a dispute with a retailer?

a. Call the police

b. Call a lawyer

c. Call your local elected representative

d. Call the retailer

218. When you first discover an unauthorized credit card charge:

a. Call the police

b. Wait to receive your credit card statement

c. Ignore it

d. Call the card issuer and report it

219. If the value of a country's currency decreases, the cost to import its goods:

a. Increases

b. Decreases

c. Increases in inverse proportion to the GDP

d. Stays the same

220. When budgeting for a new car, which costs should you consider?

a. Fuel economy

b. Loan interest rate

c. Maintenance costs

d. All of the above

221. When choosing a personal information number for your debit card you should:

a. Use your birthday

b. Write the number on the back of the card

c. Pick a random number that you can remember

d. Use 1234

222. Which strategy below would provide the most secure online banking password?

a. The last four digits of your driver's license

b. Your birthday

c. Something you can easily remember, like 1234

d. A completely random number

223. When discussing credit, "capacity" relates to:

a. How much is in your checking account

b. The size of a credit card balance

c. How much borrowers can carry compared to their income

d. The amount of taxes you have paid for the year

224. When is a good time for parents to start saving for college tuition?

a. Right after their child is born

b. When their child is a senior in high school

c. When their mortgage is paid in full


225. When logging in to your checking account online, you can view:

a. Your balance

b. Your ATM withdrawals

c. Transfers between your accounts

d. All of the above

226. When might it make sense to borrow money now and repay it with future income?

a. Your favorite jeans are marked down 50%

b. You have only reached 50% of your credit card limit

c. When buying a car will get you a much better-paying job

d. You really need a vacation

227. When ordering something online:

a. Go to another site quickly so you wont be overcharged

b. Resubmit if youre not sure the order went through

c. Print the confirmation page immediately

d. All of the above

228. When paying a bill, you should NEVER:

a. Send cash in the mail

b. Go online and pay with your debit card

c. Pay over the phone using a credit card

d. Pay with a cashiers check

229. When planning to have a baby, it is important to budget for:

a. Diapers

b. Child care, if you will need to work

c. Unplanned medical expenses

d. All of the above

230. When referring to income, what does "gross" mean?

a. Before taxes have been deducted

b. After taxes have been deducted

c. Tax-deferred


231. To save money on a car rental:

a. Rent a truck instead

b. Only rent on weekdays

c. Decline collision if it's covered by your insurance or credit card

d. Squeeze into a small car

232. An implied warranty on a used car is:

a. What the seller says but doesnt put in writing

b. A factory warranty left from the previous owner

c. A promise to fix any part of the car that breaks

d. The assumption that a car works properly when purchased

233. When someone uses their credit card for a cash advance:

a. The grace period is the same as for purchases

b. The interest rate may be higher than for purchases

c. Interest does not accrue until the end of the grace period

d. All of the above

234. Who decides whether an adults credit card application is accepted?

a. The credit card issuer

b. Their employer

c. Their parents

d. The federal government

235. When you buy a corporate bond, you are:

a. Loaning money to a corporation

b. Buying part of a corporation

c. Borrowing money from a corporation

d. Donating money to a corporation

236. When you buy an item on credit and pay it off over time, you will:

a. Pay more for it in the long run

b. Pay less for it in the long run

c. Pay exactly what the price tag says

d. Pay only the wholesale price

237. When you buy stock in a company, you buy:

a. A guaranteed profit from the company

b. A certain quantity of the company's products

c. A part of the actual company itself

d. A piece of paper with the company's logo

238. When you get an ATM receipt you should:

a. Throw it in the trash right away

b. Destroy it after reviewing your account statement

c. Send it with your credit card payment

d. Send it with your utility payment

239. Checks that haven't cleared on your bank statement should be:

a. Reconciled the following month

b. Subtracted manually to avoid overdrafts

c. Removed from your check register

d. Replaced with newly written checks

240. When your paycheck is automatically added to your bank account, it is called:

a. Cash advance

b. Direct deposit

c. Automatic banking

d. Stop-gap financing

241. Debit card purchases are deducted from your _________

a. Bank loan

b. Certificate of deposit

c. Credit card account

d. Bank account

242. Which are the two most important factors when determining someone's creditworthiness?

a. Their payment history and amounts owed

b. Their length of credit history and amounts owed

c. The types of credit they currently use and payment history

d. Number of credit inquiries made and amounts owed

243. Which loan would offer the lowest monthly payment, but the highest overall interest paid?

a. 36 month loan

b. 48 month loan

c. 60 month loan

d. 72 month loan

244. Which group would probably be affected most by high inflation?

a. Young working couples with no children

b. Young working couples who have children

c. Older working couples saving for retirement

d. Older couples living on a fixed income

245. Which is a feature of a debit card?

a. Monthly finance charges

b. No risk of identity theft

c. Transactions are deducted from bank account immediately

d. It is paid off at the end of the month

246. Which is a sign that you are in trouble with debt?

a. This month's bills arrive before you have paid last month's

b. You avoid opening bills because they upset you

c. You are receiving overdue notices

d. All of the above

247. Which is an example of a "need to have" expense versus "want to have"?

a. Shoes for school versus a new video game

b. Breakfast versus dessert

c. Money for school supplies versus money for a new toy

d. All of the above

248. Which is an example of something you "want" rather than "need"?

a. New video game

b. Cough medicine

c. School textbook

d. New shoes to replace a pair you outgrew

249. People sometimes run out of money after retirement because:

a. Health care becomes more expensive every year

b. They do not maintain a household budget

c. They underestimate the effect of inflation

d. All of the above

250. Which is NOT a common type of life insurance?

a. Term

b. Whole life

c. Annual

d. Variable

251. To save on back-to-school expenses, DO NOT

a. Buy items on sale after the school year has begun

b. Buy a full year's worth of school clothes all at once

c. Shop sales and special offers

d. Confirm with teachers which supplies are mandatory

252. Which activity will increase home energy costs?

a. Lowering the thermostat at night

b. Turning off appliances when not in use

c. Fixing leaky faucets

d. Washing all clothes in hot water

253. Which of the following is an asset?

a. Paycheck

b. Credit card balance

c. Hospital bill

d. Student loan balance

254. Which is NOT a way to decrease your debt-to-income ratio?

a. Increase your income

b. Decrease your debt

c. Take out a loan to pay off your debt

d. All of the above

255. Which of the following is a liability?

a. Checking account balance

b. Savings account balance

c. Credit card debt

d. A motorcycle

256. To help keep your debit card secure, DO NOT:

a. Sign the back of the card

b. Use the card in public places

c. Keep your PIN on a note in your wallet

d. Monitor your bank statement regularly

257. Which is NOT true about savings accounts?

a. Their interest rates tend to fluctuate gradually.

b. They pay the highest interest rates of any account

c. They allow you to deposit and withdraw funds

d. Their interest earnings may be taxable

258. Which is the more liquid asset?

a. A car


c. A house

d. A boat

259. Which is true about interest earned on a savings account?

a. The interest rate is guaranteed for one year

b. You cannot earn interest until after age 18

c. Savings account interest may be taxed

d. Savings account interest is tax-deductible

260. Which of the following can lower your creditworthiness?

a. Making late payments

b. Owning too many credit card accounts

c. Charging over your credit limit

d. All of the above

261. Which factor below does NOT affect creditworthiness?

a. Gender

b. Payment history

c. Credit card balances

d. Student loan balances

262. Which of the following does NOT help prevent identity theft?

a. Downloading current anti-virus software

b. Shredding documents that contain personal information

c. Shielding the ATM keypad when withdrawing money

d. Sharing your passwords with a trusted friend

263. Which of the following does not take money directly from your bank account?

a. Credit card

b. Debit card

c. Personal check

d. Overdraft fee

264. What number would be best to use as a debit card PIN?

a. Your mother's phone number

b. Your old address

c. A random number

d. Your birth date

265. Which of the following is a non-discretionary expense?

a. New computer game

b. Candy

c. Food

d. All of the above

266. Which of the following is a non-discretionary expense?

a. Mobile phone

b. Weekly manicure

c. Birthday present


267. Which of the following is a responsible spending practice?

a. Spending more money than you have in your checking account

b. Buying items on sale, even if you do not need them

c. Buying an item that is included in your budget

d. Always shopping at discount retailers

268. Which of the following is a legal contract?

a. Co-signing an apartment lease with a roommate

b. Taking out a car loan

c. Clicking "yes" on a website's privacy policy

d. All of the above

269. Which of the following is NOT good advice when buying a car?

a. Treat a trade-in as a separate transaction

b. Consider fuel economy and maintenance fees when budgeting

c. Always arrange financing through the dealer

d. Consider a used car

270. Which actions might cause a checking account to become overdrawn?

a. Not subtracting non-network ATM fees from your balance

b. Forgetting to enter a check in the register

c. Not balancing your check book

d. All of the above

271. Which of the following typically is NOT covered by renter's insurance?

a. Furniture damaged by a fire

b. Luggage stolen at the airport

c. Electronic equipment not covered by a separate rider

d. Television stolen during a burglary

272. Which of the following will NOT help your household budget?

a. Reducing utility consumption

b. Resisting impulse spending

c. Only using ATMs in your bank's network

d. Decreasing insurance deductibles

273. Saving for __________ is considered a long-term savings goal.

a. A movie and snacks

b. A video game being released next month

c. An automobile down payment

d. Expensive new running shoes

274. Which of the following would NOT be considered a long-term savings goal?

a. Saving for a new winter coat

b. Saving for retirement

c. Down payment for a car

d. Down payment for a house

275. Which of these activities could potentially damage your creditworthiness?

a. Not paying a delinquent library fine

b. Making multiple trips to the grocery store in one week

c. Maintaining a low savings account balance


276. Which employment scenario is likely to improve your creditworthiness?

a. No employment history

b. Many different jobs in a short period of time

c. A long, steady employment history

d. Gaps in employment

277. Which of these is a disadvantage to using a credit card?

a. You earn higher interest in your linked bank accounts

b. You may increase impulse buying

c. There is a record kept of all transactions

d. Financial impacts of major purchases are diluted over time

278. Which of these is a variable expense?

a. Car payment

b. Electric bill

c. Mortgage

d. All of the above

279. Which statement about credit history is true?

a. Paying off an overdue loan removes it from your credit history

b. Closing old accounts always improves your creditworthiness

c. Paying your card bill on time helps your creditworthiness

d. Bankruptcy stays on your record forever

280. Which of these is NOT a factor on which a mortgage approval is based?

a. Whether the property is in a flood plain

b. The neighborhood of the new home

c. The inspection report of the property

d. How long the buyer intends to own the property

281. Which of these is NOT a good strategy to get out of debt?

a. Pay more than the minimum due on credit cards

b. Pay off the highest interest rate card first

c. Skip a payment on one card to catch up on another

d. Call your creditors and ask for a lower interest rate

282. Which of these is NOT a product credit unions typically offer:

a. Savings account

b. Money market account

c. Stock portfolio

d. Car loan

283. Which of these is NOT a sound financial habit?

a. Saving money for an unexpected emergency

b. Spending beyond your means

c. Revising your budget when your salary changes

d. Comparison shopping online for major purchases

284. Which of these is factored into your creditworthiness by lenders?

a. Your parent's mortgage amount

b. Your sibling's mortgage amount

c. Your father's annual income

d. Your past history paying back loans

285. Which of these is the most important tool for managing finances?

a. A budget

b. A credit card

c. A consolidation loan

d. A stock portfolio

286. Which of these is usually considered a safer investment?

a. Corporate bonds

b. Technology stocks

c. Mutual funds

d. Real estate

287. Which monthly expense is more of a "want" rather than a "need"?

a. Electric utility bill

b. Magazine subscription

c. Rent payment

d. College textbook

288. Which should NOT be a factor in saving for retirement:

a. How much you can borrow from friends and relatives

b. The age at which you plan to retire

c. Where you plan to retire

d. Inflation

289. Which statement is true about bankruptcy?

a. It stays on your credit record for many years

b. Bankruptcy cancels all debts

c. It lets you protect property by giving it away

d. Income taxes are waived when you file for bankruptcy

290. What should retired people consider to supplement their income?

a. Part-time work

b. A less-expensive home

c. Renting out a spare room

d. All of the above

291. Who gets paid first when a company goes bankrupt?

a. Stockholders

b. Bondholders

c. Customers

d. No one gets paid in a bankruptcy

292. Whose rights does a lease protect?

a. The tenant's

b. The landlord's

c. Both the tenant's and landlord's

d. Neither the tenant's nor landlord's

293. With credit cards, the minimum monthly payment is:

a. A percentage of an outstanding balance

b. The lowest amount due for the month

c. The least you can pay to avoid incurring a fee

d. All of the above

294. With debit cards you:

a. Can get cash back when you make a purchase

b. Can pay for items online

c. May be charged fees for insufficient funds

d. All of the above

295. With investments, "long-term" generally means:

a. 1-3 years

b. 1-5 years

c. 5-10 years

d. More than 10 years

296. With online banking, you should be able to view your checking account balance:

a. During business hours

b. When the bank is open

c. When you turn 18

d. Anytime

297. You build up debt on a debit card when:

a. You use it to pay your bills

b. You use it to pay your rent

c. You buy groceries

d. You cannot build up debt on a debit card

298. You can monitor your bank account balance by:

a. Counting your change

b. Adding up your paychecks

c. Checking it regularly online or by phone

d. Cashing a check

299. You can save money by:

a. Comparison shopping on the Internet

b. Clipping coupons

c. Waiting for sales

d. All of the above

300. You can use a credit or debit card to buy items or services:

a. Online

b. At a store

c. By phone

d. All of the above

301. You can use your _________ to purchase goods.

a. Savings account

b. Debit card

c. ATM card

d. Passport

302. You have $200 in your checking account and you spend $75. What is your new balance?

a. $175

b. $150

c. $125

d. $100

303. You keep track of checking account checks, debits, withdrawals and deposits in a:

a. Transaction register

b. Financial statement

c. Annual report

d. Credit report

304. You obtain a debit card from:

a. Your accountant

b. Your employer

c. An electronics store

d. A bank or credit union

305. You take out a mortgage to:

a. Pay for a home

b. Receive a new credit card

c. Buy a used car

d. Increase your credit rating

306. Writing a $150 check when you have only $100 in your account is called

a. Free money

b. An overdraft

c. A bank error

d. Deductability

307. Your ATM personal identification number (PIN):

a. Tells you your current balance

b. Gives the bank access to your financial records

c. Identifies you as an authorized account holder

d. Indicates your credit rating

308. Your bank may charge a fee if:

a. You withdraw money from a certificate of deposit (CD) early

b. You overdraw on your checking account

c. You overcharge on your credit card

d. All of the above

309. Your car insurance premium will likely decrease if you:

a. Avoid parking tickets

b. Lower your deductible

c. Raise your deductible

d. Buy a new car

310. Your credit card annual percentage rate may be lower if:

a. You are a new customer

b. You have a history of paying your bills on time

c. Your overall debt is low

d. All of the above

311. A credit limit:

a. Is the minimum amount due each month

b. Limits the fees a person can be charged

c. Limits the interest rate on a credit card

d. Is the maximum balance that can be carried on a credit card

312. Your creditworthiness changes based on:

a. Payment activity reported by lenders

b. What you purchase with your debit card

c. Your most recent employment application

d. All of the above

313. Your net income:

a. Can be found in your credit report

b. Is gross income minus taxes and items withheld from your pay

c. Appears on your monthly credit card statement

d. All of the above

314. Zero liability means:

a. Banks do not have to pay you interest if the market is down

b. You are not responsible for fraud on your credit card

c. You don't have to pay back your debts

d. Credit card companies can charge you a yearly fee

315. You can use an ATM anywhere in the world to get cash with no fee.

a. TRUE

b. FALSE

316. Downloading two songs a week at $1 each would cost $52 in six months.

a. TRUE

b. FALSE

317. With online banking, you can transfer money between your accounts.

a. TRUE

b. FALSE

318. An overdraft fee is what you pay when your credit card payment is late.

a. TRUE

b. FALSE

319. When creating a budget, you should weigh your "needs" versus "wants."

a. TRUE

b. FALSE

320. Identity thieves target only people who look like themselves.

a. TRUE

b. FALSE

321. Rent is a monthly fixed expense.

a. TRUE

b. FALSE

322. Common maturity dates for certificates of deposit include 3, 6 or 12 months.

a. TRUE

b. FALSE

323. "Pyramid schemes" are so-called because most originate in Egypt.

a. TRUE

b. FALSE

324. Groceries are considered discretionary spending.

a. TRUE

b. FALSE

325. A credit card's APR is important to consider if you plan to carry a balance.

a. TRUE

b. FALSE

326. It is best to choose a hard-to-guess number for your debit card PIN.

a. TRUE

b. FALSE

327. If a new video game costs $28 and you have saved $13, you need another $16 to buy it.

a. TRUE

b. FALSE

328. If your wallet is lost or stolen, you should contact your credit card issuer immediately.

a. TRUE

b. FALSE

329. Overdraft protection is available only from credit unions.

a. TRUE

b. FALSE

330. "Zero liability" protects card holders from fraudulent credit card charges.

a. TRUE

b. FALSE

331. Debit cards should never be used for online purchases.

a. TRUE

b. FALSE

332. If you reduce your $20 monthly snack budget by 10%, you will save $24 in a year.

a. TRUE

b. FALSE

333. Identity theft can occur when someone steals your mail.

a. TRUE

b. FALSE

334. Putting aside money for college is considered a long-term savings goal.

a. TRUE

b. FALSE

335. Your cell phone bill is considered to be a variable expense.

a. TRUE

b. FALSE

336. A utility bill is an example of an unexpected expense.

a. TRUE

b. FALSE

337. If you buy one 50-cent candy bar a week, in one year you would spend $25.

a. TRUE

b. FALSE

338. A car loan is considered long-term debt.

a. TRUE

b. FALSE

339. Debit cards cannot be used to pay for gas.

a. TRUE

b. FALSE

340. Savings accounts are considered low-risk savings options.

a. TRUE

b. FALSE

341. Credit cards accrue interest charges if you do not pay the balance in full.

a. TRUE

b. FALSE

342. If you withdraw $45 from a $100 savings account, your remaining balance is $65.

a. TRUE

b. FALSE

343. Overdraft protection helps prevent your checks from bouncing.

a. TRUE

b. FALSE

344. It is not necessary to get a receipt when paying a bill in cash.

a. TRUE

b. FALSE

345. You may be charged a credit card late payment fee if you are one day late.

a. TRUE

b. FALSE

346. A penalty may be charged for early withdrawal from a certificate of deposit.

a. TRUE

b. FALSE

347. It is a good idea to save money for unexpected emergencies.

a. TRUE

b. FALSE

348. Credit card purchases are deducted immediately from your checking account.

a. TRUE

b. FALSE

349. Many banks charge a fee for using ATMs outside their network.

a. TRUE

b. FALSE

350. It is safe to send your credit card number in an email.

a. TRUE

b. FALSE

351. Interest rates for credit card cash advances are often higher than for purchases.

a. TRUE

b. FALSE

352. Regular savings accounts pay the highest interest rate of any investment vehicle.

a. TRUE

b. FALSE

353. Exceeding the credit limit on your credit card will usually generate a fee.

a. TRUE

b. FALSE

354. A school uniform is considered an "expense."

a. TRUE

b. FALSE

355. To estimate your yearly income, multiply your monthly earnings by 10.

a. TRUE

b. FALSE

356. Before making an ATM withdrawal, you should always check your balance.

a. TRUE

b. FALSE

357. Using anti-virus and anti-phishing software will help prevent identity theft.

a. TRUE

b. FALSE

358. Food and clothing are two "needs" that should be included in a monthly budget.

a. TRUE

b. FALSE

359. Lowering your insurance deductible will lower your monthly premium.

a. TRUE

b. FALSE

360. Legitimate businesses often ask you to verify passwords by phone or online.

a. TRUE

b. FALSE

361. You arent responsible for late fees on your credit card during vacation.

a. TRUE

b. FALSE

362. Payment history is an important measure of your creditworthiness.

a. TRUE

b. FALSE

363. Compound interest grows more rapidly than simple interest.

a. TRUE

b. FALSE

364. Introductory credit card rates stay in effect as long as the account is open.

a. TRUE

b. FALSE

365. Secured credit card purchases are limited to the amount in your deposit account.

a. TRUE

b. FALSE

366. The interest earned by savings accounts typically outpaces inflation.

a. TRUE

b. FALSE

367. If you never carry a balance on your credit card, a low interest rate is essential.

a. TRUE

b. FALSE

368. Bankruptcy can affect your credit for many years.

a. TRUE

b. FALSE

369. Collateral is one of the characteristics that determines your creditworthiness.

a. TRUE

b. FALSE

370. Home equity is how much money you still owe on your mortgage.

a. TRUE

b. FALSE

371. Credit card issuers usually verify your income before opening an account.

a. TRUE

b. FALSE

372. Buying stock in a company is a low-risk investment option.

a. TRUE

b. FALSE

373. A certificate of deposit is a high-risk savings option.

a. TRUE

b. FALSE

374. The type of car you own affects the price you pay for auto insurance.

a. TRUE

b. FALSE

375. A video game is considered a non-discretionary expense.

a. TRUE

b. FALSE

376. An outstanding check is one that has not yet been cashed.

a. TRUE

b. FALSE

377. Liability is where someone owes you money.

a. TRUE

b. FALSE

378. "Compounding" is how often interest is calculated and added to your account.

a. TRUE

b. FALSE

379. Making a higher down payment can reduce a loan's monthly payment.

a. TRUE

b. FALSE

380. Regular savings accounts often have a penalty for early withdrawal.

a. TRUE

b. FALSE

381. Prepaid cards can be used for the same types of purchases as debit cards.

a. TRUE

b. FALSE

382. Budgeting is a good way to plan for ongoing expenses.

a. TRUE

b. FALSE

383. Net income is your take home pay after taxes and expenses have been deducted.

a. TRUE

b. FALSE

384. Credit is money that is loaned with a promise to repay later.

a. TRUE

b. FALSE

385. Some credit card issuers charge an annual fee to use their cards.

a. TRUE

b. FALSE

386. Past borrowing performance is not considered a good indicator of future behavior.

a. TRUE

b. FALSE

387. If you make 35 text messages in a month at 15 cents apiece, that would cost $5.25.

a. TRUE

b. FALSE

388. Making credit card payments on time can improve your credit standing.

a. TRUE

b. FALSE

389. A downside to credit cards is the temptation to make purchases you cant afford.

a. TRUE

b. FALSE

390. Repeatedly making late payments can trigger higher credit card interest rates.

a. TRUE

b. FALSE

391. Paying more than the minimum amount due on a credit card will shorten the payoff time.

a. TRUE

b. FALSE

392. A common first step when creating a budget is to add up income from all sources.

a. TRUE

b. FALSE

393. It is a good idea to apply for numerous credit cards to increase your creditworthiness.

a. TRUE

b. FALSE

394. Groceries are an example of a fixed expense.

a. TRUE

b. FALSE

395. Youll pay more on a 60-month car loan than a 48-month loan with the same interest rate.

a. TRUE

b. FALSE

396. A savings account is considered a liquid asset.

a. TRUE

b. FALSE

397. New cars lose 20% of their value as soon as you drive off the lot.

a. TRUE

b. FALSE

398. Using an ATM outside your own bank's network may result in fees from both banks.

a. TRUE

b. FALSE

399. You do not need to start saving for retirement until you are age 40.

a. TRUE

b. FALSE

400. If you deposit a fraudulent check, you must cover it once the fraud is proven.

a. TRUE

b. FALSE

401. The more favorable your credit record, the easier it is to get a loan.

a. TRUE

b. FALSE

402. An apartment lease is a type of contract.

a. TRUE

b. FALSE

403. Some prepaid cards incur fees that can reduce their balance over time.

a. TRUE

b. FALSE

404. Generic drugs usually cost about the same as their name-brand equivalents.

a. TRUE

b. FALSE

405. "Capital gain" is the price at which you sold an asset minus its original purchase price.

a. TRUE

b. FALSE

406. "Actual cash value" insurance costs more than "replacement value" insurance.

a. TRUE

b. FALSE

407. Loan interest rates tend to go up during periods of inflation.

a. TRUE

b. FALSE

408. "Unit pricing" refers to a method for comparing costs of grocery brands or package sizes.

a. TRUE

b. FALSE

409. Total assets minus total liabilities is called gross income.

a. TRUE

b. FALSE

410. Making frequent purchases using your debit card will improve your credit standing.

a. TRUE

b. FALSE

411. There is never a penalty to pay off a loan early.

a. TRUE

b. FALSE

412. "Clarity" is one of the characteristics that determine your creditworthiness.

a. TRUE

b. FALSE

413. If your investment account drops from $2,500 to $2,000, that is a 25% decrease.

a. TRUE

b. FALSE

414. Experts recommend having three to six months' income saved in an emergency fund.

a. TRUE

b. FALSE

415. A home foreclosure will damage your creditworthiness.

a. TRUE

b. FALSE

416. You should always print or save the confirmation page when ordering something online.

a. TRUE

b. FALSE

417. Predatory lending refers to loans granted for hunting and fishing expenses.

a. TRUE

b. FALSE

418. Store-branded prepaid cards can be used with any merchant.

a. TRUE

b. FALSE

419. Decreasing expenses is a good way to reverse negative net income.

a. TRUE

b. FALSE

420. Savings accounts are considered low liquidity investments.

a. TRUE

b. FALSE

421. Paying more than the minimum due on a credit card will lower the interest you pay.

a. TRUE

b. FALSE

422. Lenders rarely look at your length of credit history when considering you as a borrower.

a. TRUE

b. FALSE

423. A car down payment is an example of an upfront cost.

a. TRUE

b. FALSE

424. One way to establish good credit is to get a small loan and pay it off fully, on time.

a. TRUE

b. FALSE

425. In finance, "capital" is another word for liability.

a. TRUE

b. FALSE

426. Credit unions are typically member-owned.

a. TRUE

b. FALSE

427. Buying something "wholesale" is more expensive than "retail."

a. TRUE

b. FALSE

428. You should use your planned retirement age to calculate the amount you need to save.

a. TRUE

b. FALSE

429. Before making a loan, lenders assess the risk that someone will not repay it.

a. TRUE

b. FALSE

430. Unsecured credit cards are typically easier to qualify for than secured cards.

a. TRUE

b. FALSE

431. The higher your ratio of debt to available credit, the better.

a. TRUE

b. FALSE

432. With a fixed rate mortgage, your interest rate does not fluctuate.

a. TRUE

b. FALSE

433. A negative net income means you spend more than you earn.

a. TRUE

b. FALSE

434. Paying off a loan will not improve your creditworthiness.

a. TRUE

b. FALSE

435. Contracts are mutually binding agreements between two or more parties.

a. TRUE

b. FALSE

436. How much debt you have will not factor in to whether you qualify for a loan.

a. TRUE

b. FALSE

437. A history of late payments will make it harder to qualify for a loan.

a. TRUE

b. FALSE

438. "Appreciation" is when something loses value.

a. TRUE

b. FALSE

439. Discretionary expenses are non-essential items you can live without.

a. TRUE

b. FALSE

440. Car insurance is an example of a fixed expense.

a. TRUE

b. FALSE

441. A lease protects the rights of both the tenant and the owner of an apartment.

a. TRUE

b. FALSE

442. Rent is an example of a "want" expense versus a "need" expense.

a. TRUE

b. FALSE

443. Annual percentage rate is the interest rate on an outstanding loan balance.

a. TRUE

b. FALSE

444. Owning shares of company stock guarantees a percentage of profit.

a. TRUE

b. FALSE

445. Gross income is what you arrive at after deducting taxes.

a. TRUE

b. FALSE

446. A new baby will automatically be added to your list of insurance beneficiaries.

a. TRUE

b. FALSE

447. "Laddering" is where you purchase certificates of deposit with different maturity dates.

a. TRUE

b. FALSE

448. Deflation is a decline in prices caused by a reduction in the supply of money or credit.

a. TRUE

b. FALSE

449. "Capacity" refers to how much you can borrow relative to your income.

a. TRUE

b. FALSE

450. A smart way to ensure you save money is:

a. Eliminating all variable expenses

b. Not paying the full amount due on bills

c. Setting money aside as soon as you get paid

d. Avoiding all discretionary spending

451. Highest to lowest, which accounts typically offer the best interest rates?

a. CD, Savings Account, Money Market Account

b. CD, Money Market Account, Savings Account

c. Savings Account, Money Market Account, CD

d. Money Market Account, CD, Savings Account

452. In the banking world, a CD is also known as:

a. Certified Debt

b. Confidential Debit

c. Compact Disc

d. Certificate of Deposit

453. A CD and money market account are two examples of:

a. Savings

b. A high risk investment

c. Credit


454. Interest is:

a. The extra money you pay on a loan

b. The extra money you earn in a savings account

c. Based on an APR

d. All of the above

455. The rule of 72:

a. Is used to measure interest over time

b. Determines how quickly a savings account can double in value

c. Is only an estimate

d. All of the above

456. When funds are liquid, they are:

a. Not earning any interest

b. Accessible with little or no penalty

c. Not insured by your financial institution

d. A risky investment

457. Good reasons to save money include:

a. Establishing an emergency fund

b. Saving for a car or apartment

c. Saving for college

d. All of the above

458. Easy ways to spend less money include:

a. Making coffee at home instead of buying at a coffee shop

b. Renting DVDs instead of going to the movies

c. Cooking meals at home instead of eating out

d. All of the above

459. Most savings accounts today accrue:

a. Simple interest

b. Compound interest

c. Negative interest

d. Bonus interest when you sign up

460. Which statement about traditional savings accounts is true?

a. They usually earn simple interest

b. They yield higher interest than CDs

c. They are riskier than CDs


461. To calculate simple interest on $1000 at 4% APR, use:

a. $1000 x .04

b. $1000 x 4

c. $1000 / .04


462. Which of the following does NOT represent an interest rate?

a. 4%

b. .08

c. 5.5%

d. $68

463. Principal that is very liquid is most likely:

a. Earning a very high interest

b. Earning a modest amount of interest

c. Earning no interest

d. Earning only simple interest

464. Cashing out a CD before its term ends:

a. Is forbidden

b. Will result in hefty fees

c. Will strip the account of all its value

d. Is okay if interest rates go up suddenly

465. A budget is considered balanced when:

a. Your expenses do not exceed your income

b. All of your money is accounted for

c. You pay your bills on time

d. You live beyond your means

466. Discretionary spending refers to money spent on:

a. Both needs and wants

b. Wants

c. Fixed expenses

d. Variable expenses

467. A weekly allowance and a monthly paycheck are both examples of:

a. Interest

b. Expenses

c. Income

d. Needs

468. Which of the following would NOT be considered an asset?

a. A 5-year CD

b. A gold watch

c. A platinum credit card

d. Land you inherited from a grandparent

469. Fixed expenses:

a. Are easier to plan for than variable expenses

b. Might include rent or a cable TV bill

c. Cost the same amount every month

d. All of the above

470. A person's net worth is:

a. The total of their assets minus their liabilities

b. The principal amount in all their savings accounts

c. A major factor in credit scoring

d. Available on the Internet

471. Discretionary spending might include:

a. A fashion magazine

b. An ice cream at the mall

c. Concert tickets

d. All of the above

472. A mortgage loan is an example of a:

a. Lien

b. Liability

c. Benefit

d. Want

473. Assessing "needs" versus "wants" is an effective way to:

a. Control excessive spending

b. Manage your budget

c. Save money

d. All of the above

474. Which of the following is typically NOT a fixed expense?

a. Rent

b. Gym membership

c. Entertainment costs

d. Insurance

475. Discretionary spending:

a. Must be eliminated to balance a budget

b. Should be monitored on a regular basis

c. Is another name for variable expenses

d. Includes purchases which are tax exempt

476. Which of the following is considered a liability?

a. The house you own

b. A financial inheritance

c. A credit card balance

d. Antique jewelry

477. Which of the following is not a variable expense?

a. School books

b. The heating bill

c. Entertainment

d. All are variable expenses

478. Groceries, utilities and rent are all:

a. Liabilities

b. Wants

c. Expenses

d. Assets

479. If a purchase is considered a "want" versus a "need":

a. You should buy it with a credit card

b. You should buy it with a debit card

c. You should evaluate this purchase carefully

d. You shouldn't buy it

480. If the net amount of your budget is negative:

a. You can probably save more money

b. You are likely living beyond your means

c. You will owe interest on the amount


481. If the net amount of your budget is positive:

a. You can probably save more money

b. You may be living beyond your means

c. You should scale back on all discretionary spending


482. Debit cards:

a. Do not accrue debt

b. Are issued by financial institutions

c. Have no credit limit assigned to them

d. All of the above

483. When you shop with a debit card:

a. You are paying in advance

b. You are paying later

c. You are paying now


484. When you shop with a credit card:





485. When you shop with a prepaid card:





486. Impulse purchases should be carefully monitored when using:

a. A debit card

b. A credit card

c. Cash

d. Any form of payment

487. Late payments on a credit card bill can:

a. Incur fees

b. Increase your interest rate

c. Impact your credit score

d. All of the above

488. Credit cards' zero liability policy:

a. Protects consumers from fraudulent charges

b. Only applies if your card is lost

c. Is offered for an additional fee

d. Is only offered for online shopping

489. Which of these can build your credit history:

a. A debit card

b. A credit card

c. A prepaid card

d. All of the above

490. A gift card is a type of:

a. Credit card

b. Debit card

c. Prepaid card


491. A credit card's annual fee:

a. Is always the same amount

b. Is paid for by the issuing bank

c. Is waived for customers with multiple credit cards


492. Which is typically NOT a feature of credit card email or cell phone alerts?

a. Notifying you when a large purchase is made

b. Alerting you when you go over your credit limit

c. Reminding you when a payment is due

d. Thanking you for recent purchases.

493. Online access to your credit and debit card accounts:

a. Lets you view all account activity

b. Helps you spot errors or fraud

c. Allows you to schedule payments

d. All of the above

494. If you plan to carry a balance on your credit card:

a. Choose a card with a low APR

b. Find a card with no annual fee

c. Pick the card with the highest credit limit

d. Spread the balance over multiple cards

495. A credit card with a low introductory interest rate:

a. Always has a high annual fee

b. Must be paid on time to avoid losing the low rate

c. Must be co-signed by a second cardholder


496. It's safest to share personal or account information:

a. With someone who calls you

b. With someone you have contacted yourself

c. On the Internet

d. It is never safe to share this information

497. Which is NOT an effective way to prevent fraud?

a. Shredding documents that contain credit account information

b. Only shopping online at secure sites that you know

c. Spreading purchases over various accounts

d. Keeping your PIN written down in a safe place

498. Banks and credit unions need your PIN to:

a. Verify your account balance

b. Confirm your identity

c. Evaluate creditworthiness

d. Encrypt financial data

499. A prepaid card is a good option if:

a. You want to avoid debt

b. You don't have access to a credit card

c. You need help tracking spending

d. All of the above

500. Debit cards are:

a. Tied directly to a checking or savings account

b. More widely accepted than credit cards

c. Assigned a unique credit limit

d. Reloadable at many retail locations

501. A credit cardholder agreement:

a. Is the unspoken promise to always pay your bill

b. Contains all the Terms and Conditions of a credit account

c. Does not hold merchants liable for fraud

d. Is also known as a credit application

502. Interest rates on credit card cash advances are:

a. Usually higher than those for regular purchases

b. Tax deductible

c. Set and fixed by the federal government

d. Linked to a certificate of deposit

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