WISE Financial Literacy Certification
Term Review- Questions & Answers
who is and is not hurt by inflation Correct Ans-companies and borrowers (not hurt)
workers, recipients of fixed incomes, and savers (hurt)
US treasury department Correct Ans-manages government revenue
they issue bonds, notes, and bills
pay yourself first Correct Ans-put money into savings and retirement accounts to avoid
spending it
certificate of deposit (CD) Correct Ans-a certificate issued by a bank to a person depositing
money for a specified length of time (at a set interest rate)
avoids holders from withdrawing funds on demand (before it matures)
maturity- when the term ends
if redeemed before matured, you may have to pay a fine or forfeit a portion of the interest you
earned on it
institutions that give loans Correct Ans-banks, credit unions (low interest)
pawnshops, finance companies, payday lenders, tax preparers (high interest)
, credit union Correct Ans-a non profit-making money cooperative whose members can
benefit from lower interest rates on loan and higher interest rates on investments
overdraft protection Correct Ans-when you write a check for more than is in your account,
the bank covers it but you have to pay them back for the amount that they covered
compound interest Correct Ans-interest on the initial deposit + accrued interest
time value of money Correct Ans-money is less valuable over time unless invested (inflation)
it's better to have money now rather than later
rule of 72 Correct Ans-72 / interest rate (in %) = doubling time
Endorsement Correct Ans-Signing the back of a check
reconcile Correct Ans-Comparing your bank statement to you check register for differences
tax anticipation loans Correct Ans-loans to be payed back by an anticipated tax return
credit card cash advances Correct Ans-cash from an ATM charged to a credit card
high interest rates
Term Review- Questions & Answers
who is and is not hurt by inflation Correct Ans-companies and borrowers (not hurt)
workers, recipients of fixed incomes, and savers (hurt)
US treasury department Correct Ans-manages government revenue
they issue bonds, notes, and bills
pay yourself first Correct Ans-put money into savings and retirement accounts to avoid
spending it
certificate of deposit (CD) Correct Ans-a certificate issued by a bank to a person depositing
money for a specified length of time (at a set interest rate)
avoids holders from withdrawing funds on demand (before it matures)
maturity- when the term ends
if redeemed before matured, you may have to pay a fine or forfeit a portion of the interest you
earned on it
institutions that give loans Correct Ans-banks, credit unions (low interest)
pawnshops, finance companies, payday lenders, tax preparers (high interest)
, credit union Correct Ans-a non profit-making money cooperative whose members can
benefit from lower interest rates on loan and higher interest rates on investments
overdraft protection Correct Ans-when you write a check for more than is in your account,
the bank covers it but you have to pay them back for the amount that they covered
compound interest Correct Ans-interest on the initial deposit + accrued interest
time value of money Correct Ans-money is less valuable over time unless invested (inflation)
it's better to have money now rather than later
rule of 72 Correct Ans-72 / interest rate (in %) = doubling time
Endorsement Correct Ans-Signing the back of a check
reconcile Correct Ans-Comparing your bank statement to you check register for differences
tax anticipation loans Correct Ans-loans to be payed back by an anticipated tax return
credit card cash advances Correct Ans-cash from an ATM charged to a credit card
high interest rates
