Financial Literacy Exam questions and
answers rated A+
When is the best time to apply for a credit card? - ANS ✔✔when you have enough income to
pay your debts
How long will a chapter 7 bankruptcy usually remain on your credit report? - ANS ✔✔ten years
Which of the following is the best key component of financial literacy? - ANS ✔✔being
knowledgeable about credit and debt
Good money management is important for which of the following reasons: - ANS ✔✔learning
how to make wise financial decisions
understanding that loans cost more money than the amount actually borrowed
being able to invest in a savings account
all of the above
Which of these would contribute to going into debt? - ANS ✔✔spending more money than you
make
buying big ticket items without planning on how to pay for them
taking money from your savings to pay for your grocery items
all of the above
,Which is the main reason some people choose to file a chapter 13 bankruptcy? - ANS ✔✔It is a
more conservative approach to bankruptcy.
The best money-management strategy is which of the following? - ANS ✔✔Do not spend more
money than you can pay back each month.
Pick the scenario that best represents the most positive financial outcome. - ANS ✔✔Madeline
has one credit card with a $500 maximum limit. Using her credit card will help her establish a
good credit rating to show loan institutions that she is financially responsible. She does not pay
any financial costs because she pays the entire amount she borrowed on that card each month
so she does not incur interest. When the time comes that she desires to purchase a car, she will
be a good candidate to receive a loan.
A chapter 11 bankruptcy is filed by which of the following? - ANS ✔✔businesses
Which of the following best describes sound financial literacy? - ANS ✔✔gaining knowledge
about how to handle your finances
Who should be most responsible for your finances? - ANS ✔✔you
Excessive debt does not contribute to which of the following? - ANS ✔✔self-sufficiency
Define debt. - ANS ✔✔the state of owing money to someone or something
A chapter 7 bankruptcy involves which of the following? - ANS ✔✔You get a fresh start on your
finances.
The average American household has accumulated how much credit card debt? - ANS
✔✔between $15,000 and $16,000
, When is the best time to start learning money management principles? - ANS ✔✔throughout
your lifetime, to be ready to implement when you have money to manage
What was the average college debt of graduating seniors in 2012? - ANS ✔✔approximately
$29,000
Approximately how many American households or individuals declared chapter 13 bankruptcy
in 2009? - ANS ✔✔350,000
People in the eighteen-to-twenty-four age bracket spend nearly what percentage of their
monthly income just on debt repayment? - ANS ✔✔30%
Which of the following is not a key component of financial literacy? - ANS ✔✔paying the
minimum amount due on your credit cards each month
Which of the following is not an advantage of debit cards? - ANS ✔✔They will help you
establish credit for future big-ticket items.
Which of the following is the best definition of a need? - ANS ✔✔something you must have in
order to survive
The best definition of "compounded interest" is which of the following? - ANS ✔✔interest that
creditors add each year based on what your principal balance is
What is the proper order for making a budget? - ANS ✔✔set goals, make a plan, and follow-up
What is the number one reason why more than half of all Americans spend more money than
they make? - ANS ✔✔credit cards
answers rated A+
When is the best time to apply for a credit card? - ANS ✔✔when you have enough income to
pay your debts
How long will a chapter 7 bankruptcy usually remain on your credit report? - ANS ✔✔ten years
Which of the following is the best key component of financial literacy? - ANS ✔✔being
knowledgeable about credit and debt
Good money management is important for which of the following reasons: - ANS ✔✔learning
how to make wise financial decisions
understanding that loans cost more money than the amount actually borrowed
being able to invest in a savings account
all of the above
Which of these would contribute to going into debt? - ANS ✔✔spending more money than you
make
buying big ticket items without planning on how to pay for them
taking money from your savings to pay for your grocery items
all of the above
,Which is the main reason some people choose to file a chapter 13 bankruptcy? - ANS ✔✔It is a
more conservative approach to bankruptcy.
The best money-management strategy is which of the following? - ANS ✔✔Do not spend more
money than you can pay back each month.
Pick the scenario that best represents the most positive financial outcome. - ANS ✔✔Madeline
has one credit card with a $500 maximum limit. Using her credit card will help her establish a
good credit rating to show loan institutions that she is financially responsible. She does not pay
any financial costs because she pays the entire amount she borrowed on that card each month
so she does not incur interest. When the time comes that she desires to purchase a car, she will
be a good candidate to receive a loan.
A chapter 11 bankruptcy is filed by which of the following? - ANS ✔✔businesses
Which of the following best describes sound financial literacy? - ANS ✔✔gaining knowledge
about how to handle your finances
Who should be most responsible for your finances? - ANS ✔✔you
Excessive debt does not contribute to which of the following? - ANS ✔✔self-sufficiency
Define debt. - ANS ✔✔the state of owing money to someone or something
A chapter 7 bankruptcy involves which of the following? - ANS ✔✔You get a fresh start on your
finances.
The average American household has accumulated how much credit card debt? - ANS
✔✔between $15,000 and $16,000
, When is the best time to start learning money management principles? - ANS ✔✔throughout
your lifetime, to be ready to implement when you have money to manage
What was the average college debt of graduating seniors in 2012? - ANS ✔✔approximately
$29,000
Approximately how many American households or individuals declared chapter 13 bankruptcy
in 2009? - ANS ✔✔350,000
People in the eighteen-to-twenty-four age bracket spend nearly what percentage of their
monthly income just on debt repayment? - ANS ✔✔30%
Which of the following is not a key component of financial literacy? - ANS ✔✔paying the
minimum amount due on your credit cards each month
Which of the following is not an advantage of debit cards? - ANS ✔✔They will help you
establish credit for future big-ticket items.
Which of the following is the best definition of a need? - ANS ✔✔something you must have in
order to survive
The best definition of "compounded interest" is which of the following? - ANS ✔✔interest that
creditors add each year based on what your principal balance is
What is the proper order for making a budget? - ANS ✔✔set goals, make a plan, and follow-up
What is the number one reason why more than half of all Americans spend more money than
they make? - ANS ✔✔credit cards
