Wise Financial Literacy Test Study Guide
UPDATED ACTUAL Questions and
CORRECT Answers
Sources of income - CORRECT ANSWER - Wages and tips, capital gains, savings and
investment vehicles, gifts, and real estate.
Number one source of income - CORRECT ANSWER - Salaries, Wages and tips.
Liquidity - CORRECT ANSWER - How easily assets can be converted to cash.
Highly liquid products - CORRECT ANSWER - Checking account.
Low liquidity products - CORRECT ANSWER - Real estate.
Gift cards - CORRECT ANSWER - Preloaded with money and used like cash/debit card;
inactivity fees set in after a year.
Discretionary income - CORRECT ANSWER - Money left over after all mandatory
expenses are paid.
Budget surplus - CORRECT ANSWER - When you over budget and have money left
over.
Budget variance - CORRECT ANSWER - A difference in what you budgeted and what
you actually spent (can be positive or negative).
Fixed expenses - CORRECT ANSWER - Expense that remains consistent month to month
(e.g., car payment, mortgage).
, Variable expenses - CORRECT ANSWER - Expense that changes month to month (e.g.,
utilities, groceries).
Money orders - CORRECT ANSWER - Form of payment you can get at a post office or
store that functions like a guaranteed check.
Value of US currency - CORRECT ANSWER - It is backed by the full faith and credit of
the US government.
Who is most hurt by inflation? - CORRECT ANSWER - People on fixed incomes.
Pay yourself first - CORRECT ANSWER - After paying for necessary expenses, put
money away in savings.
Deposit notification requirement - CORRECT ANSWER - If a person makes a deposit of
$10,000 or more into a bank account, the bank must notify the US Treasury Dept.
CD (Certificate of Deposit) - CORRECT ANSWER - A low risk investment vehicle; if
you cash it before maturity, you will have to pay a penalty fee.
Pawn Shops - CORRECT ANSWER - Charge high interest, with a short amount of time to
pay back.
Payday lenders - CORRECT ANSWER - Charge high interest and risk a cycle of debt;
should be avoided.
Credit union advantage - CORRECT ANSWER - Lower interest rates.
UPDATED ACTUAL Questions and
CORRECT Answers
Sources of income - CORRECT ANSWER - Wages and tips, capital gains, savings and
investment vehicles, gifts, and real estate.
Number one source of income - CORRECT ANSWER - Salaries, Wages and tips.
Liquidity - CORRECT ANSWER - How easily assets can be converted to cash.
Highly liquid products - CORRECT ANSWER - Checking account.
Low liquidity products - CORRECT ANSWER - Real estate.
Gift cards - CORRECT ANSWER - Preloaded with money and used like cash/debit card;
inactivity fees set in after a year.
Discretionary income - CORRECT ANSWER - Money left over after all mandatory
expenses are paid.
Budget surplus - CORRECT ANSWER - When you over budget and have money left
over.
Budget variance - CORRECT ANSWER - A difference in what you budgeted and what
you actually spent (can be positive or negative).
Fixed expenses - CORRECT ANSWER - Expense that remains consistent month to month
(e.g., car payment, mortgage).
, Variable expenses - CORRECT ANSWER - Expense that changes month to month (e.g.,
utilities, groceries).
Money orders - CORRECT ANSWER - Form of payment you can get at a post office or
store that functions like a guaranteed check.
Value of US currency - CORRECT ANSWER - It is backed by the full faith and credit of
the US government.
Who is most hurt by inflation? - CORRECT ANSWER - People on fixed incomes.
Pay yourself first - CORRECT ANSWER - After paying for necessary expenses, put
money away in savings.
Deposit notification requirement - CORRECT ANSWER - If a person makes a deposit of
$10,000 or more into a bank account, the bank must notify the US Treasury Dept.
CD (Certificate of Deposit) - CORRECT ANSWER - A low risk investment vehicle; if
you cash it before maturity, you will have to pay a penalty fee.
Pawn Shops - CORRECT ANSWER - Charge high interest, with a short amount of time to
pay back.
Payday lenders - CORRECT ANSWER - Charge high interest and risk a cycle of debt;
should be avoided.
Credit union advantage - CORRECT ANSWER - Lower interest rates.
