WISE TEST – WALL STREET JOURNAL STUDENT EXAM |
FINANCIAL LITERACY & INVESTMENT 120 PRACTICE
QUESTIONS WITH ANSWERS COVERING MST TESTED
QUESTIONS
THE WISE TEST MEASURES STUDENTS’ UNDERSTANDING OF PERSONAL
FINANCE, INCLUDING BUDGETING, BANKING, CREDIT MANAGEMENT, TAXES,
SAVINGS, INSURANCE, AND INVESTMENTS. IT IS A NATIONALLY RECOGNIZED
FINANCIAL LITERACY EXAM DESIGNED TO CERTIFY STUDENTS’ READINESS TO
MANAGE MONEY RESPONSIBLY IN THE WORKPLACE AND ADULT LIFE.
It is generally a good idea to borrow money and repay the amount borrowed with future income
when
A. a person needs to buy a car to get a much better paying job.
B. a person really needs a week's vacation.
C. clothing a person likes goes on sale.
D. the interest on the loan is greater than interest being earned on savings. - CORRECT
ANSWER-A
If a person is behind on his debt payments and goes to a responsible credit counseling service,
what help is likely to be offered?
A. They can cancel and cut up his credit cards without his permission.
B. They can get the federal government to apply his income taxes to pay off his debts.
C. They can work with those who loaned him money to set up a realistic payment schedule.
D. They can force those who loaned him money to forgive his debts. - CORRECT ANSWER-C
Scott and Eric are young men with good credit reports. They work at the same company and
make approximately the same salary. Scott has borrowed $6,000 to take an overseas vacation.
Eric has borrowed $6,000 to buy a truck. Who is likely to pay the lowest finance charge?
A. Eric will pay less because the truck is collateral for the loan.
B. Scott will pay less because people who travel overseas are less risky to lenders.
C. They will both pay the same because the rate of interest on the loan is set by law.
,D. They will both pay the same because they are borrowing the same amount of money. -
CORRECT ANSWER-A
An arrangement to receive cash, goods or services now and pay for them in the future is called
A. credit.
B. liquidity.
C. collateral.
D. net income. - CORRECT ANSWER-A
The rate imposed by the lender for the borrower to pay on a loan is known as
A. money market rate (MMR).
B. effective annual rate (EAR).
C. annual percentage rate (APR).
D. debit card rate (DCR). - CORRECT ANSWER-C
The possibility that a borrower fails to repay a loan on time and will never be able to repay the
loan is known as
A. interest rate risk.
B. credit risk.
C. liquidity risk.
D. investment risk. - CORRECT ANSWER-B
When applying for a loan, borrowers will probably need to provide information regarding their
A. work experience.
B. assets.
C. health record.
D. financial plan. - CORRECT ANSWER-B
A person purchases $2,500 of furniture from XYZ Department Store. She decides to use the
store's plan where a person makes 12 equal payments over the next year to pay for the
, purchase. She signs a contract which specifies what her payments are and when they are due.
This is an example of
A. an installment plan.
B. a predatory loan.
C. a cash purchase.
D. a line of credit. - CORRECT ANSWER-A
A loan can be denied by a lender because of a person's
A. education.
B. health.
C. credit history.
D. gender. - CORRECT ANSWER-C
Which of the following individuals has financial problems?
A. A person who is borrowing money to buy a house.
B. A person who has a loan for college.
C. A person who uses a credit card to make most purchases.
D. A person who is unable to pay his rent. - CORRECT ANSWER-D
A low credit score can negatively affect a person's ability to
A. rent an apartment.
B. get approved for a debit card.
C. open a savings account.
D. qualify for a driver's license. - CORRECT ANSWER-A
One difference between a debit card and a credit card is that
A. debit cards can only be used when the person makes a large transaction.
B. debit cards provide better consumer protection than credit cards.
C. debit card payments are immediately deducted from the person's bank account.
D. debit cards generate unsecured debt. - CORRECT ANSWER-C
FINANCIAL LITERACY & INVESTMENT 120 PRACTICE
QUESTIONS WITH ANSWERS COVERING MST TESTED
QUESTIONS
THE WISE TEST MEASURES STUDENTS’ UNDERSTANDING OF PERSONAL
FINANCE, INCLUDING BUDGETING, BANKING, CREDIT MANAGEMENT, TAXES,
SAVINGS, INSURANCE, AND INVESTMENTS. IT IS A NATIONALLY RECOGNIZED
FINANCIAL LITERACY EXAM DESIGNED TO CERTIFY STUDENTS’ READINESS TO
MANAGE MONEY RESPONSIBLY IN THE WORKPLACE AND ADULT LIFE.
It is generally a good idea to borrow money and repay the amount borrowed with future income
when
A. a person needs to buy a car to get a much better paying job.
B. a person really needs a week's vacation.
C. clothing a person likes goes on sale.
D. the interest on the loan is greater than interest being earned on savings. - CORRECT
ANSWER-A
If a person is behind on his debt payments and goes to a responsible credit counseling service,
what help is likely to be offered?
A. They can cancel and cut up his credit cards without his permission.
B. They can get the federal government to apply his income taxes to pay off his debts.
C. They can work with those who loaned him money to set up a realistic payment schedule.
D. They can force those who loaned him money to forgive his debts. - CORRECT ANSWER-C
Scott and Eric are young men with good credit reports. They work at the same company and
make approximately the same salary. Scott has borrowed $6,000 to take an overseas vacation.
Eric has borrowed $6,000 to buy a truck. Who is likely to pay the lowest finance charge?
A. Eric will pay less because the truck is collateral for the loan.
B. Scott will pay less because people who travel overseas are less risky to lenders.
C. They will both pay the same because the rate of interest on the loan is set by law.
,D. They will both pay the same because they are borrowing the same amount of money. -
CORRECT ANSWER-A
An arrangement to receive cash, goods or services now and pay for them in the future is called
A. credit.
B. liquidity.
C. collateral.
D. net income. - CORRECT ANSWER-A
The rate imposed by the lender for the borrower to pay on a loan is known as
A. money market rate (MMR).
B. effective annual rate (EAR).
C. annual percentage rate (APR).
D. debit card rate (DCR). - CORRECT ANSWER-C
The possibility that a borrower fails to repay a loan on time and will never be able to repay the
loan is known as
A. interest rate risk.
B. credit risk.
C. liquidity risk.
D. investment risk. - CORRECT ANSWER-B
When applying for a loan, borrowers will probably need to provide information regarding their
A. work experience.
B. assets.
C. health record.
D. financial plan. - CORRECT ANSWER-B
A person purchases $2,500 of furniture from XYZ Department Store. She decides to use the
store's plan where a person makes 12 equal payments over the next year to pay for the
, purchase. She signs a contract which specifies what her payments are and when they are due.
This is an example of
A. an installment plan.
B. a predatory loan.
C. a cash purchase.
D. a line of credit. - CORRECT ANSWER-A
A loan can be denied by a lender because of a person's
A. education.
B. health.
C. credit history.
D. gender. - CORRECT ANSWER-C
Which of the following individuals has financial problems?
A. A person who is borrowing money to buy a house.
B. A person who has a loan for college.
C. A person who uses a credit card to make most purchases.
D. A person who is unable to pay his rent. - CORRECT ANSWER-D
A low credit score can negatively affect a person's ability to
A. rent an apartment.
B. get approved for a debit card.
C. open a savings account.
D. qualify for a driver's license. - CORRECT ANSWER-A
One difference between a debit card and a credit card is that
A. debit cards can only be used when the person makes a large transaction.
B. debit cards provide better consumer protection than credit cards.
C. debit card payments are immediately deducted from the person's bank account.
D. debit cards generate unsecured debt. - CORRECT ANSWER-C
