WISE Financial Literacy Certification
Practice Questions with Correct
Answers
Question :Pat has a savings account and a car loan from a not-for-profit financial
institution owned by its members. She is probably a member of what type of financial
institution?
A: Credit union
B: Commercial bank
C: Savings and loan association
D: Investment club - Answer- A. Credit Union
Question :When money is not used and goods and services are exchanged for other
goods and services, this system is called:
A: Credit
B: Money
C: Barter
D: Checks - Answer- C: Barter
Question : Who benefits the most from inflation?
A: Long-term fixed rate borrowers
B: Lenders
C: Persons on fixed incomes
D: The government - Answer- Answer A: Long-term fixed rate
Question : Which of the following is the federal law that requires the cost of credit be
disclosed to consumers in bold print on loan agreement?
A: Fair Credit Reporting Act
B: Equal Credit Opportunity Act
C: Truth in Lending Act
D: Fair Debt Collection Practices Act - Answer- Correct Answer C: Truth in Lending Act
Question :Troy has $50 a month transferred electronically from his checking account to
his savings account. This is an example of:
A: An installment payment
B: A savings plan
C: An ATM transaction
, D: A debit card transaction - Answer- B: A savings plan
Question :Patty is selling her car through a newspaper advertisement. When she finds a
buyer, she wants a form of payment which is guaranteed to be good. Which form of
payment should she avoid?
A: Cash
B: Certified check
C: Cashiers check
D: A check - Answer- D: A check
Question : The financial institution where Ms. Sanchez has her checking account will
continue to pay out money for the checks she writes as long as:
A: She uses checks from her checkbook
B: The financial institution has sufficient funds
C: There is enough money in Ms. Sanchez's account to cover the amount of the checks
D: She maintains a good record of deposits and handles her account responsibly -
Answer- C: There is enough money in Ms. Sanchez's account to cover the amount of
the checks
Question : A person owns a stock that pays a $2.00 a share dividend. If the person
chooses to reinvest that dividend, this means that the $2.00 will go toward buying
A: more of the same stock.
B: stocks that are similar to those already owned.
C: preferred stock in the corporation.
D: bonds in the corporation. - Answer- A: more of the same stock.
Question : A pharmacy is to drugs as the American Stock Exchange is to:
A: Interest
B: Stock advisors
C: Securities
D: Mutual funds - Answer- Correct Answer C: Securities
Question : The annual percentage rate (APR) is:
A: The true cost of credit that must be disclosed on a loan agreement
B: Always expressed in dollars
C: Required by the Securities Exchange Commission
D: Required by the Comptroller of the Currency - Answer- A: The true cost of credit that
must be disclosed on a loan agreement
Question : Debbie owns a clothing store. She is concerned that a customer who is
injured in the store will sue. Which type of insurance should Debbie purchase?
Practice Questions with Correct
Answers
Question :Pat has a savings account and a car loan from a not-for-profit financial
institution owned by its members. She is probably a member of what type of financial
institution?
A: Credit union
B: Commercial bank
C: Savings and loan association
D: Investment club - Answer- A. Credit Union
Question :When money is not used and goods and services are exchanged for other
goods and services, this system is called:
A: Credit
B: Money
C: Barter
D: Checks - Answer- C: Barter
Question : Who benefits the most from inflation?
A: Long-term fixed rate borrowers
B: Lenders
C: Persons on fixed incomes
D: The government - Answer- Answer A: Long-term fixed rate
Question : Which of the following is the federal law that requires the cost of credit be
disclosed to consumers in bold print on loan agreement?
A: Fair Credit Reporting Act
B: Equal Credit Opportunity Act
C: Truth in Lending Act
D: Fair Debt Collection Practices Act - Answer- Correct Answer C: Truth in Lending Act
Question :Troy has $50 a month transferred electronically from his checking account to
his savings account. This is an example of:
A: An installment payment
B: A savings plan
C: An ATM transaction
, D: A debit card transaction - Answer- B: A savings plan
Question :Patty is selling her car through a newspaper advertisement. When she finds a
buyer, she wants a form of payment which is guaranteed to be good. Which form of
payment should she avoid?
A: Cash
B: Certified check
C: Cashiers check
D: A check - Answer- D: A check
Question : The financial institution where Ms. Sanchez has her checking account will
continue to pay out money for the checks she writes as long as:
A: She uses checks from her checkbook
B: The financial institution has sufficient funds
C: There is enough money in Ms. Sanchez's account to cover the amount of the checks
D: She maintains a good record of deposits and handles her account responsibly -
Answer- C: There is enough money in Ms. Sanchez's account to cover the amount of
the checks
Question : A person owns a stock that pays a $2.00 a share dividend. If the person
chooses to reinvest that dividend, this means that the $2.00 will go toward buying
A: more of the same stock.
B: stocks that are similar to those already owned.
C: preferred stock in the corporation.
D: bonds in the corporation. - Answer- A: more of the same stock.
Question : A pharmacy is to drugs as the American Stock Exchange is to:
A: Interest
B: Stock advisors
C: Securities
D: Mutual funds - Answer- Correct Answer C: Securities
Question : The annual percentage rate (APR) is:
A: The true cost of credit that must be disclosed on a loan agreement
B: Always expressed in dollars
C: Required by the Securities Exchange Commission
D: Required by the Comptroller of the Currency - Answer- A: The true cost of credit that
must be disclosed on a loan agreement
Question : Debbie owns a clothing store. She is concerned that a customer who is
injured in the store will sue. Which type of insurance should Debbie purchase?
