GEB 3006 Financial Literacy UPDATED
ACTUAL Exam Questions and CORRECT
Answers
Goal: Revenues > expenses - CORRECT ANSWER - run your financial life like a
business
Are you a spender or a saver? - CORRECT ANSWER - -Understand your personality type
-set a budget for each semester
-learn how to save at a young age
-spender:perhaps a debit card is best for you
Learn to save and budget your money - CORRECT ANSWER - -Keep 3 months pay for
emergencies
-target 10-15% of your income into a retiring plan
-today USA we only have 3.4% saved money
Money grows exponentially - CORRECT ANSWER - -FV=PV x (1 + interest)
-most americans dont start saving until their 40s, thats to late start early
speculation,Frauds over the centuries - CORRECT ANSWER - -day trading
-nft
-sport gambling
-digital currencies
-meme stocks
-housing bubble
, why is consumer credit important? - CORRECT ANSWER - -individuals will borrow
throughout their lifetime
-maintaining a good credit rating will allow you to borrow when you need to and lower the cost
of borrowing via a lower interest rate
Your Credit Score - CORRECT ANSWER - -insurance companies use credit scores to set
premiums
-college students will build or destroy a credit rating while attending school
-Experian, TransUnion,Equifax all allow you to get your free credit reports
-credit reporting agencies maintain a credit score and sell it to the lenders
-insurance companies use to set rates
Improving your FICO score - CORRECT ANSWER - -pay your bills on time (35%)
-manage your debt to credit limit ration (30%)
-you get your ration by dividing the Balance due/ Card Limit
-the lower the ratio the better
-protect your credit history (15%): the longer the history the better, be careful about canceling
old unused credit cards
-have the right credit mix (20%):Mortgage debt is good, installment debt (auto) good and lots of
new credit cards is bad
What to do if you do not have a FICo Score ? - CORRECT ANSWER - -credit card with
small limit, pay it off monthly
-piggyback on your parents cards
I cant pay all my credit cards this month - CORRECT ANSWER - pay on time,pay at least
the minimum with the excess going to the highest rate card
if your parents have a bad credit score what to do ? - CORRECT ANSWER - get off their
card ASAP
ACTUAL Exam Questions and CORRECT
Answers
Goal: Revenues > expenses - CORRECT ANSWER - run your financial life like a
business
Are you a spender or a saver? - CORRECT ANSWER - -Understand your personality type
-set a budget for each semester
-learn how to save at a young age
-spender:perhaps a debit card is best for you
Learn to save and budget your money - CORRECT ANSWER - -Keep 3 months pay for
emergencies
-target 10-15% of your income into a retiring plan
-today USA we only have 3.4% saved money
Money grows exponentially - CORRECT ANSWER - -FV=PV x (1 + interest)
-most americans dont start saving until their 40s, thats to late start early
speculation,Frauds over the centuries - CORRECT ANSWER - -day trading
-nft
-sport gambling
-digital currencies
-meme stocks
-housing bubble
, why is consumer credit important? - CORRECT ANSWER - -individuals will borrow
throughout their lifetime
-maintaining a good credit rating will allow you to borrow when you need to and lower the cost
of borrowing via a lower interest rate
Your Credit Score - CORRECT ANSWER - -insurance companies use credit scores to set
premiums
-college students will build or destroy a credit rating while attending school
-Experian, TransUnion,Equifax all allow you to get your free credit reports
-credit reporting agencies maintain a credit score and sell it to the lenders
-insurance companies use to set rates
Improving your FICO score - CORRECT ANSWER - -pay your bills on time (35%)
-manage your debt to credit limit ration (30%)
-you get your ration by dividing the Balance due/ Card Limit
-the lower the ratio the better
-protect your credit history (15%): the longer the history the better, be careful about canceling
old unused credit cards
-have the right credit mix (20%):Mortgage debt is good, installment debt (auto) good and lots of
new credit cards is bad
What to do if you do not have a FICo Score ? - CORRECT ANSWER - -credit card with
small limit, pay it off monthly
-piggyback on your parents cards
I cant pay all my credit cards this month - CORRECT ANSWER - pay on time,pay at least
the minimum with the excess going to the highest rate card
if your parents have a bad credit score what to do ? - CORRECT ANSWER - get off their
card ASAP
