Transcript Document

Personal Finance
MULTIPLE CHOICE REVIEW
What is VISION, as it relates to financial literacy?
a.
b.
c.
d.
The ability to see
A thought in your mind of the future
Outline of goals leading to a desired purpose
How much money you want to have
What is VISION, as it relates to financial literacy?
c.
Outline of goals leading to a desired purpose
The following factors will impact the economy,
EXCEPT;
a.
b.
c.
d.
Gas prices
Layoffs
Public Elections
All impact the economy
The following factors will impact the economy,
EXCEPT;
d.
All impact the economy
3)
a.
b.
c.
d.
What is one of the risks to a high level of
inflation?
Consumer goods are cheaper
Buying power is decreased
Luxury items increase in price, while everyday
goods remain the same
Government will lose money
3)
What is one of the risks to a high level of
inflation?
b.
Buying power is decreased
4)
If Ferrari’s cost $5,000 what would happen
to the quantity demanded?
a.
b.
c.
d.
Demand would not exist
Demand would not change
Demand would increase
Demand would decrease
4)
If Ferrari’s cost $5,000 what would happen
to the quantity demanded?
c.
Demand would increase
If the price to produce an iPod goes up $1,000,
what would happen to quantity supplied?
a.
b.
c.
d.
Supply would not exist
Supply would not change
Supply would increase
Supply would decrease
If the price to produce an iPod goes up $1,000,
what would happen to quantity supplied?
d.
Supply would decrease
Which of the following is NOT a deduction from a
typical paycheck?
a.
b.
c.
d.
Medicaid
Social Security
Health Insurance
Electricity Tax
Which of the following is NOT a deduction from a
typical paycheck?
d.
Electricity Tax
Select the best way to describe the relationship
with education & earning potential;
a.
b.
c.
d.
Higher levels of education achieved results in
higher earning potential
No relationship between the two can be proved
Working hard is better than higher levels of
education
A Master’s degree offers the highest earning
potential
Select the best way to describe the relationship
with education & earning potential;
a.
Higher levels of education achieved results in
higher earning potential
Power in consistency; if you save a penny a day, two pennies tomorrow,
four pennies the third day & for one month this pattern continues, how
much will you have at the end of a 30-day month?
a.
b.
c.
d.
$5,368,709.12
$245.80
$107,920.20
$54,902.80
Power in consistency; if you save a penny a day, two pennies tomorrow,
four pennies the third day & for one month this pattern continues, how
much will you have at the end of a 30-day month?
a.
$5,368,709.12
Is saving more important than investing?
a.
b.
c.
d.
Depends on the price of stocks
Both are equally important to financial health
Saving is more important
Investing is more important
Is saving more important than investing?
b.
Both are equally important to financial health
Select the option that Albert Einstein refers to as
“the most powerful force in the universe”
a.
b.
c.
d.
Gravity
The NYSE (New York Stock Exchange)
Compound Interest
Educated Consumers
Select the option that Albert Einstein refers to as
“the most powerful force in the universe”
c.
Compound Interest
If you earn 6% interest, about how many years
will it take your investment to double?
a.
b.
c.
d.
20 years
16.67 years
6 years
12 years
If you earn 6% interest, about how many years
will it take your investment to double?
d.
12 years
If you invest $360 (one-time) at 12% interest, what
will the value of your investment be after 70 years?
a.
b.
c.
d.
$1,003,607.94
$3,024
$28,224
$114,908.25
If you invest $360 (one-time) at 12% interest, what
will the value of your investment be after 70 years?
a.
$1,003,607.94
Select the correct formula for calculating
compound interest for a one-time investment;
a.
b.
c.
d.
Principal * Periods * Interest
Principal (1 + Interest)# of periods
(Periods/Interest) * Principal
Principal interest * Periods interest
Select the correct formula for calculating
compound interest for a one-time investment;
b.
Principal (1 + Interest)# of periods
Which of the following is considered a high-risk
investment?
a.
b.
c.
d.
Stocks
Bonds
Money Markets
Hedge Funds
Which of the following is considered a high-risk
investment?
d.
Hedge Funds
Which retirement plan offers less risk to the
employer?
a.
b.
c.
d.
Pension Plan
Defined-Contribution Plan
Defined-Benefit Plan
401(k) Plan
Which retirement plan offers less risk to the
employer?
b.
Defined-Contribution Plan
Which company is NOT one of the three major
credit-reporting agencies?
a.
b.
c.
d.
Transunion
Credit-Track
Experian
Equifax
Which company is NOT one of the three major
credit-reporting agencies?
b.
Credit-Track
How is your insurance premium calculated?
a.
b.
c.
d.
Complex formulas estimating your level of risk
for incurring a loss
Premiums are standard by age group
Depends on how much the agent makes on
commission
None of the above
How is your insurance premium calculated?
a.
Complex formulas estimating your level of risk
for incurring a loss
What is a reason someone would lease a car
versus purchase a car?
a.
b.
c.
d.
They still want ownership for less monthly
payment
They want to protect themselves from paying for
repairs
The use of the car will be limited to certain
mileage restrictions
Leasing a car offers tax benefits
What is a reason someone would lease a car
versus purchase a car?
c.
The use of the car will be limited to certain
mileage restrictions
Identify why someone would purchase a home
versus renting a home;
a.
b.
c.
d.
There is no benefit between purchasing &
renting a home
They are afraid of continual maintenance
Renting is better, purchasing a home cost more
money
They want to build equity
Identify why someone would purchase a home
versus renting a home;
d.
They want to build equity
Which is NOT a factor used to calculate Time
Value of Money (TVM)?
a.
b.
c.
d.
Number of Periods
Interest Rate
Future Exchange Rates
Principal