WISE Financial Literacy Test Latest Real
Questions and Solutions | Updated
Question Bank | A+ Verified
• identity theft . Answer: a form of fraud; thieves use another persona's personal
information in order to steal that person's money or gain access to other benefits (i.e.,
credit card fraud, phone and utility theft, and banking fraud)
• Social Security Number . Answer: Also known as your SSN; nine digit number given to
U.S. citizens, permanent U.S. residents, and temporary working residents to track
income and wages; used as the primary identification number for individuals in the
United States
• phishing scam . Answer: a scam where someone tries to deceive you into providing
personal information by impersonating someone, like a bank representative
• cash card . Answer: refers to any card that can be used by a cash card reader and
used to pay for products or services at that retailer, such as an ATM card, pre-paid
credit card, or store gift card
• cashless society . Answer: a society in which consumers pay using credit or debit
cards, electronic funds transfer, or shop online instead of paying by cash or personal
check
• gift card . Answer: also known as a gift certificate; refers to a prepaid, store-valued
money card issued by the retailer or by a bank that is used as an alternative to cash for
purchases at a particular business
• inflation . Answer: a general increase in prices and decline in purchasing power (value
of money) over a period of time
• purchasing power . Answer: the value of a currency in terms of the amount of goods or
services that one unit of money (or $1.00 in the U.S.) can buy
• store card . Answer: a charge card or credit card used to purchase goods in a
particular store and paid with interest at a later date; usually carries an incentives or
rewards program
• supply & demand . Answer: the theory explaining the interaction between the supply of
a resource and the demand for that resource, or the effect that the availability of a
particular product and the desire for the product have on price
• U.S. Treasury Department . Answer: the government department responsible for
issuing all Treasury bonds, notes and bills
,• upward mobility . Answer: the ability to move from a lower to a higher social class or
status, such as from the level of poverty to middle class, usually in terms of household
income and spending power
• windfall income . Answer: refers to a large profit that occurs unexpectedly due to
fortuitous circumstances, such as an unforeseen inheritance or winning the lottery
• balanced budget . Answer: refers to a budget in which revenues, or income, are equal
to expenditures
• budget deficit . Answer: an indicator of financial health that occurs when expenditures
exceed revenue (income) or, in other words, more money was spent than the income
available
• discretionary income . Answer: refers to the take-home income, or net pay, that
remains after mandatory deductions (i.e., taxes) and expenditures on necessary items
(i.e., food, shelter) are accounted for in the budget; also known as spending money or
fun money
• disposable income . Answer: refers to the take-home income available for spending or
saving after the deduction of taxes and other mandatory charges; also known as net
pay
• emergency fund . Answer: an account used to set aside funds needed in the event of a
personal financial dilemma, such as the loss of a job, a debilitating illness, or a major
expense; usually recommended to be at least six months expenses
• fixed expense . Answer: a budget item that will be the same total amount from month-
to-month regardless of changes in circumstance, such as rent or installment loan (i.e.,
student or car) payments
• opportunity costs . Answer: the benefit, profit, or value of something that must be given
up in order to acquire or achieve something else; the alternate that was forfeited when a
decision was made
• surplus . Answer: the amount of something left over when requirements have been
met, such as a surplus of income after expenses are paid in a personal budget
• trade off . Answer: occurs when you give up the value or added-benefit of one choice
in order to achieve the desired results of another choice; usually includes an
assessment of "pros" and "cons"
• variable expense . Answer: a budget item that fluctuates from month-to-month based
on volume or usage, such as a water bill or electricity bill
, • impulse buying . Answer: the decision to purchase goods without advance planning,
as a result of a sudden whim or desire
• assigned risk pool . Answer: refers to a group of people for whom the state requires an
insurance company to provide insurance coverage, such as for unemployment or
automotive (car)
• auto (car) insurance . Answer: a type of insurance that protects a policyholder in the
case of a car accident; most states require it by law
• beneficiary . Answer: the person, people, or entity designated to receive the death
benefits from a life insurance policy or annuity contract
• cash value . Answer: refers to the cash amount offered to the policyholder upon
cancellation of the contract; typically associated with life insurance used as an
investment (interest)
• claim . Answer: the formal request that you make to your insurance company for
payment of the benefits allowed by your coverage
• collision insurance . Answer: pays for damage to a car without regard to who caused
an accident; the company must pay for the repair or up to the actual cash value of the
vehicle, minus the deductible
• comprehensive insurance . Answer: pays for damage to or loss of your automobile
from causes other than accidents, including hail, vandalism, flood, fire, and theft
• co-pay . Answer: a fixed fee that an individual pays for specific medical services; for
example, for each visit to the doctor's office
• coverage . Answer: refers to the range of protection that you are eligible to receive
from an insurance plan; defines the risks covered & amount to be paid for losses
• death benefit . Answer: the amount paid to a beneficiary upon the death of the life
insurance policyholder
• deductible . Answer: the amount that you are required to pay "out of pocket" toward
each claim you make before your insurance coverage begins; cost in addition to your
premium
• dependents . Answer: a person who relies on another, especially a family member, for
financial support
• disability insurance . Answer: a type of insurance that helps cover lost income when an
illness or injury prevents you from working
Questions and Solutions | Updated
Question Bank | A+ Verified
• identity theft . Answer: a form of fraud; thieves use another persona's personal
information in order to steal that person's money or gain access to other benefits (i.e.,
credit card fraud, phone and utility theft, and banking fraud)
• Social Security Number . Answer: Also known as your SSN; nine digit number given to
U.S. citizens, permanent U.S. residents, and temporary working residents to track
income and wages; used as the primary identification number for individuals in the
United States
• phishing scam . Answer: a scam where someone tries to deceive you into providing
personal information by impersonating someone, like a bank representative
• cash card . Answer: refers to any card that can be used by a cash card reader and
used to pay for products or services at that retailer, such as an ATM card, pre-paid
credit card, or store gift card
• cashless society . Answer: a society in which consumers pay using credit or debit
cards, electronic funds transfer, or shop online instead of paying by cash or personal
check
• gift card . Answer: also known as a gift certificate; refers to a prepaid, store-valued
money card issued by the retailer or by a bank that is used as an alternative to cash for
purchases at a particular business
• inflation . Answer: a general increase in prices and decline in purchasing power (value
of money) over a period of time
• purchasing power . Answer: the value of a currency in terms of the amount of goods or
services that one unit of money (or $1.00 in the U.S.) can buy
• store card . Answer: a charge card or credit card used to purchase goods in a
particular store and paid with interest at a later date; usually carries an incentives or
rewards program
• supply & demand . Answer: the theory explaining the interaction between the supply of
a resource and the demand for that resource, or the effect that the availability of a
particular product and the desire for the product have on price
• U.S. Treasury Department . Answer: the government department responsible for
issuing all Treasury bonds, notes and bills
,• upward mobility . Answer: the ability to move from a lower to a higher social class or
status, such as from the level of poverty to middle class, usually in terms of household
income and spending power
• windfall income . Answer: refers to a large profit that occurs unexpectedly due to
fortuitous circumstances, such as an unforeseen inheritance or winning the lottery
• balanced budget . Answer: refers to a budget in which revenues, or income, are equal
to expenditures
• budget deficit . Answer: an indicator of financial health that occurs when expenditures
exceed revenue (income) or, in other words, more money was spent than the income
available
• discretionary income . Answer: refers to the take-home income, or net pay, that
remains after mandatory deductions (i.e., taxes) and expenditures on necessary items
(i.e., food, shelter) are accounted for in the budget; also known as spending money or
fun money
• disposable income . Answer: refers to the take-home income available for spending or
saving after the deduction of taxes and other mandatory charges; also known as net
pay
• emergency fund . Answer: an account used to set aside funds needed in the event of a
personal financial dilemma, such as the loss of a job, a debilitating illness, or a major
expense; usually recommended to be at least six months expenses
• fixed expense . Answer: a budget item that will be the same total amount from month-
to-month regardless of changes in circumstance, such as rent or installment loan (i.e.,
student or car) payments
• opportunity costs . Answer: the benefit, profit, or value of something that must be given
up in order to acquire or achieve something else; the alternate that was forfeited when a
decision was made
• surplus . Answer: the amount of something left over when requirements have been
met, such as a surplus of income after expenses are paid in a personal budget
• trade off . Answer: occurs when you give up the value or added-benefit of one choice
in order to achieve the desired results of another choice; usually includes an
assessment of "pros" and "cons"
• variable expense . Answer: a budget item that fluctuates from month-to-month based
on volume or usage, such as a water bill or electricity bill
, • impulse buying . Answer: the decision to purchase goods without advance planning,
as a result of a sudden whim or desire
• assigned risk pool . Answer: refers to a group of people for whom the state requires an
insurance company to provide insurance coverage, such as for unemployment or
automotive (car)
• auto (car) insurance . Answer: a type of insurance that protects a policyholder in the
case of a car accident; most states require it by law
• beneficiary . Answer: the person, people, or entity designated to receive the death
benefits from a life insurance policy or annuity contract
• cash value . Answer: refers to the cash amount offered to the policyholder upon
cancellation of the contract; typically associated with life insurance used as an
investment (interest)
• claim . Answer: the formal request that you make to your insurance company for
payment of the benefits allowed by your coverage
• collision insurance . Answer: pays for damage to a car without regard to who caused
an accident; the company must pay for the repair or up to the actual cash value of the
vehicle, minus the deductible
• comprehensive insurance . Answer: pays for damage to or loss of your automobile
from causes other than accidents, including hail, vandalism, flood, fire, and theft
• co-pay . Answer: a fixed fee that an individual pays for specific medical services; for
example, for each visit to the doctor's office
• coverage . Answer: refers to the range of protection that you are eligible to receive
from an insurance plan; defines the risks covered & amount to be paid for losses
• death benefit . Answer: the amount paid to a beneficiary upon the death of the life
insurance policyholder
• deductible . Answer: the amount that you are required to pay "out of pocket" toward
each claim you make before your insurance coverage begins; cost in addition to your
premium
• dependents . Answer: a person who relies on another, especially a family member, for
financial support
• disability insurance . Answer: a type of insurance that helps cover lost income when an
illness or injury prevents you from working
