Wise Practice Exam Questions and Answers
with Verified Solutions | Latest Updated 2026
Budget An estimate (usually by category) of
expected
income and expenses for a given period of
time.A
plan for making and spending money
Time value of money Refers to the fact that money received
today is
worth more than money received next year
or the
year after.
debt ratio The lower the ratio the better off financially
the
person is.
Financial planning need to be reviewed and adjusted to
accommodate changing needs and goals.
emergency fund to take care of unexpected expenses
This should be about 6 months of salary.
Net Income The amount of an individual's take-home
pay after
taxes and other deductions have been
taken out
, Deficit When there is not enough income to pay
all
expenses.
Discretionary Income Money that remains after you have paid for
regular
or needed expenses.
Credit You use__________ when you borrow
money or use a
credit card to pay for an item.
Credit Cards _____________ are
unsecured,Revolving,Open-End
Credit
Revolving credit allows for purchases to be charged
up to an
approved limit
The annual percentage rate (APR) The true cost of credit that must be
disclosed on a
loan agreement
a collateralized loan When a person brings an item to a
pawnshop to
obtain cash, the transaction is considered
Unsecured credit cards are what type of loan
with Verified Solutions | Latest Updated 2026
Budget An estimate (usually by category) of
expected
income and expenses for a given period of
time.A
plan for making and spending money
Time value of money Refers to the fact that money received
today is
worth more than money received next year
or the
year after.
debt ratio The lower the ratio the better off financially
the
person is.
Financial planning need to be reviewed and adjusted to
accommodate changing needs and goals.
emergency fund to take care of unexpected expenses
This should be about 6 months of salary.
Net Income The amount of an individual's take-home
pay after
taxes and other deductions have been
taken out
, Deficit When there is not enough income to pay
all
expenses.
Discretionary Income Money that remains after you have paid for
regular
or needed expenses.
Credit You use__________ when you borrow
money or use a
credit card to pay for an item.
Credit Cards _____________ are
unsecured,Revolving,Open-End
Credit
Revolving credit allows for purchases to be charged
up to an
approved limit
The annual percentage rate (APR) The true cost of credit that must be
disclosed on a
loan agreement
a collateralized loan When a person brings an item to a
pawnshop to
obtain cash, the transaction is considered
Unsecured credit cards are what type of loan
