W!SE Financial Literacy Practice Test Questions with Complete Answers, A+

Which of the following does the Federal Reserve use to regulate the nation's money supply? - Monetary policy The denominations of coins in the United States are: - $.01, $.05, $.10, $.25, $.50, and $1.00 The primary sources of income for most people between the ages of 20 and 35 who are not living on a pension or social security are: - Salaries, wages, and tips Which of the following provides an increase in assets or wealth? - Having capital gains Nora needed to make a long-distance call from a pay phone and did not have the cash. She was able to make the call by using her: - Cash card Scott just got an ATM card to use and must choose a PIN (Personal Identification Number). How should he select a PIN that will give him maximum protection against anyone else being able to find out what the PIN is? - Use a random selection of letters and numbers Money for saving, investing, or spending cannot be from: - Capital losses from the sale of stock Susan gives Marie her ABC Credit Union debit card and personal identification number (PIN) so Marie could get $25 from Susan's bank account. Marie withdrew $100 instead of the agreed to $25. How can Susan get the $75 back? - No bank or government agency is obligated to reimburse Susan because she authorized Marie to use her ATM card and PIN The common name for U.S. currency is - Green backs New coins and currency make their way into the general economy, consumers and businesses, through the distribution system of the - Federal Reserve System An investor bought 40 shares of ABC corporation's stock at $80 a share. Two weeks later, the investor receives notice that the corporation has approved a 2-for-1 stock split. Based on this information, the investor would own at the moment of the split - shares of the stock and the price of each share is $40 As an investment, a person decides to buy a small house that has three rental apartments. The profits from this investment may be lower then expected if the - one of the apartments is not rented. Using a brokerage firm, a qualified investor buys 1000 shares of a common stock at $50 a share on 50% margin. This means that the - brokerage firm is lending the investor 50% of the money A person owns a stock that pays a $2.00 a share dividend. If the person chooses to reinvest that dividend, this means that the $2.00 will go toward buying - more of the same stock Buying a treasury bill (T-bill) is best for investors who are looking for - a secure, low risk investment. What is the largest equities market in the world? - New York Stock Exchange (NYSE) Before the Kiss Corporation can issue stocks or bonds, it must register the issue with: - The Securities and Exchange Commission (SEC) A pharmacy is to drugs as the American Stock Exchange is to - Securities The interest earned on United States Series EE Savings Bonds is - exempt from state and local taxes. Which of the following best describes diversification? - Reducing risk by investing in different types of securities If a person makes a deposit of $10,000 or more into a bank account, the bank must notify the - US Treasury Department Which financial product can you buy for $25, is safe, and will be worth $50 at a future date? - Series EE savings bond Which documents should be stored in a safe-deposit box? - Mortgage loan papers. Which is the best example of a way to reduce fees paid for ATM transactions? - When making supermarket purchases with a debit card, a person adds $50 in cash to the transaction instead of using an ATM machine. Which financial product may pay a dividend? - Common stock The phrase used for putting money into a savings account is - Making a deposit Which financial product typically pays the highest rate of interest? - Certificate of deposit