WISE FINANCIAL LITERACY UPDATED
ACTUAL Questions and CORRECT
Answers
In order to get spending under control, a person should first
A. seek help on investing from a financial planner.
B. consult a credit counseling service.
C. create a budget of current income and expenses.
D. subscribe to financial newsletters and magazines. - CORRECT ANSWER - C. create a
budget of current income and expenses.
Comparison shopping for a car is necessary because
A. each dealer sells cars with different colors.
B. lenders want to be sure consumers get the best price.
C. the price for the car can vary a great deal.
D. it is a requirement to qualify for car insurance. - CORRECT ANSWER - C the price for
the car can vary a great deal.
Financial planners generally stress the importance of starting to save and invest early because
A. a person can stop saving at age 40.
B. of the power of compounding and appreciation.
C. there are fewer bills to pay when a person is young.
D. a person will not need insurance. - CORRECT ANSWER - B of the power of
compounding and appreciation.
An important feature of a good financial goal is that the goal
A. has a specific time frame.
B. is appropriate for the person's age.
C. can last throughout the person's life.
,D. will take at least ten years for the person to achieve. - CORRECT ANSWER - A has a
specific time frame.
Purchasing power decreases and it costs more money to buy goods when there is
A. a bear market.
B. inflation.
C. deflation.
D. a bull market. - CORRECT ANSWER - B inflation.
What strategy can help a person achieve her goal to buy a house?
A. Using credit cards to pay for expenses.
B. Paying for large purchases in cash.
C. Following a budget that allows for savings.
D. Applying for more credit cards to increase her credit score. - CORRECT ANSWER -C
Following a budget that allows for savings.
A college student has to live on a tight budget. Before making a decision to buy the newest cell
phone, which question should he ask himself first?
A. Is the new cell phone cheaper than the one being used?
B. Is the new cell phone on sale?
C. Is the new cell phone a need or a want?
D. Will my friends like the new cell phone? - CORRECT ANSWER - C Is the new cell
phone a need or a want?
Fixed expenses include
A. food.
B. vacations.
C. entertainment.
D. rent. - CORRECT ANSWER - D Rent.
, Mandatory deductions from a person's paycheck include
A. federal withholding tax and FICA.
B. school taxes and contributions to a retirement account.
C. regressive taxes and employee automatic savings.
D. property taxes and employee benefits. - CORRECT ANSWER - A Federal withholding
tax and FICA.
When should a person begin contributing to a retirement plan?
A. Before deciding to start a family.
B. As young as possible.
C. At age 50.
D. Upon collecting Social Security. - CORRECT ANSWER - B As young as possible.
Which of the following is the source of income for most people aged 20-35?
A. Dividends.
B. Wages/salary.
C. Rent.
D. Mortgage payments. - CORRECT ANSWER - B Wages/salary
The U.S. government agency responsible for the collection and enforcement of federal taxes is
known as
A. Federal Reserve System (Fed).
B. Securities and Exchange Commission (SEC).
C. U.S. Internal Revenue Service (IRS).
D. Consumer Financial Protection Bureau (CFPB). - CORRECT ANSWER - C U.S.
Internal Revenue Service (IRS).
ACTUAL Questions and CORRECT
Answers
In order to get spending under control, a person should first
A. seek help on investing from a financial planner.
B. consult a credit counseling service.
C. create a budget of current income and expenses.
D. subscribe to financial newsletters and magazines. - CORRECT ANSWER - C. create a
budget of current income and expenses.
Comparison shopping for a car is necessary because
A. each dealer sells cars with different colors.
B. lenders want to be sure consumers get the best price.
C. the price for the car can vary a great deal.
D. it is a requirement to qualify for car insurance. - CORRECT ANSWER - C the price for
the car can vary a great deal.
Financial planners generally stress the importance of starting to save and invest early because
A. a person can stop saving at age 40.
B. of the power of compounding and appreciation.
C. there are fewer bills to pay when a person is young.
D. a person will not need insurance. - CORRECT ANSWER - B of the power of
compounding and appreciation.
An important feature of a good financial goal is that the goal
A. has a specific time frame.
B. is appropriate for the person's age.
C. can last throughout the person's life.
,D. will take at least ten years for the person to achieve. - CORRECT ANSWER - A has a
specific time frame.
Purchasing power decreases and it costs more money to buy goods when there is
A. a bear market.
B. inflation.
C. deflation.
D. a bull market. - CORRECT ANSWER - B inflation.
What strategy can help a person achieve her goal to buy a house?
A. Using credit cards to pay for expenses.
B. Paying for large purchases in cash.
C. Following a budget that allows for savings.
D. Applying for more credit cards to increase her credit score. - CORRECT ANSWER -C
Following a budget that allows for savings.
A college student has to live on a tight budget. Before making a decision to buy the newest cell
phone, which question should he ask himself first?
A. Is the new cell phone cheaper than the one being used?
B. Is the new cell phone on sale?
C. Is the new cell phone a need or a want?
D. Will my friends like the new cell phone? - CORRECT ANSWER - C Is the new cell
phone a need or a want?
Fixed expenses include
A. food.
B. vacations.
C. entertainment.
D. rent. - CORRECT ANSWER - D Rent.
, Mandatory deductions from a person's paycheck include
A. federal withholding tax and FICA.
B. school taxes and contributions to a retirement account.
C. regressive taxes and employee automatic savings.
D. property taxes and employee benefits. - CORRECT ANSWER - A Federal withholding
tax and FICA.
When should a person begin contributing to a retirement plan?
A. Before deciding to start a family.
B. As young as possible.
C. At age 50.
D. Upon collecting Social Security. - CORRECT ANSWER - B As young as possible.
Which of the following is the source of income for most people aged 20-35?
A. Dividends.
B. Wages/salary.
C. Rent.
D. Mortgage payments. - CORRECT ANSWER - B Wages/salary
The U.S. government agency responsible for the collection and enforcement of federal taxes is
known as
A. Federal Reserve System (Fed).
B. Securities and Exchange Commission (SEC).
C. U.S. Internal Revenue Service (IRS).
D. Consumer Financial Protection Bureau (CFPB). - CORRECT ANSWER - C U.S.
Internal Revenue Service (IRS).
