Financial Literacy Exam with Answers.
TRUE or FALSE: You may be charged multiple fees for using an ATM that is not associated with
your bank. - Answer True
Why is it important to you to establish credit history and become "credit-worthy"? - Answer To
get a lower interest rate when you borrow money
What should you do with your bank statements? - Answer - Keep them in a safe file for at least
a year before shredding
- Reconcile them with your records/register
-Review them to identify improvements you could make to your spending habits
- Review them to identify and budget for fees
Why would someone get a joint checking account? - Answer To share the account with
someone else
Which items can help you when you categorize your expenses? - Answer - Checkbook register
-Online checking account statement
- Store receipts
- Monthly credit card statements
Why would someone want to keep track of his or her net cash flow? - Answer - to identify
opportunities to save
-To make sure income is larger than expenses
What is the MOST IMPORTANT thing can you do now to improve your net worth 10 years from
now? - Answer - Regularly deposit money into a savings or investment account and don't take
it out
TRUE or FALSE: Investing money always involves some risk. - Answer True
When paying your bills, it is most financially beneficial to make larger payments to: - Answer
The debt with the highest interest rate
Which of the following should you include when calculating your liabilities? - Answer Money
you owe
, Which of the following contribute(s) to your credit history, and therefore to your credit score? -
Answer - Credit Cards
- Student Loans
- Mortgages
Which of the following statements is/are true of U.S. Personal Income Taxes? - Answer -
Almost all income earners must pay some tax
- Taxes are based on income level and marital status
-Taxpayers receive tax credits for some government-approved expenses
Which of the following activities will result in a banking fee? - Answer - Getting a cashiers
check
-Overdrawing your account
It is important to reconcile your checking account every month because - Answer - It helps you
find errors you may have made in your register
-You may discover fees being charged to your account that you didn't know about
- You may find your bank has made an error
-You may see opportunities to improve your budgeting
-It may alert you that your financial identity has been stolen
Which institutions may access your credit score? - Answer - Mortgage lenders
-Credit card issuers
-Landlords
- Prospective employers
-Background investigators
Which of the following is true about SALES TAX? - Answer It makes things more expensive for
you to buy
Amir wants to open a checking account that will pay interest. What is typically true of interest-
bearing checking accounts? - Answer They have higher minimum balance requirements
It is important to know the minimum and maximum amounts of each variable expense because
_________________. - Answer - Then you know the "worst case" for that expense
- Then you can plan for the variances over a year-long period
- Then an increase in the expense can still be accommodated in your spending plan
TRUE or FALSE: You may be charged multiple fees for using an ATM that is not associated with
your bank. - Answer True
Why is it important to you to establish credit history and become "credit-worthy"? - Answer To
get a lower interest rate when you borrow money
What should you do with your bank statements? - Answer - Keep them in a safe file for at least
a year before shredding
- Reconcile them with your records/register
-Review them to identify improvements you could make to your spending habits
- Review them to identify and budget for fees
Why would someone get a joint checking account? - Answer To share the account with
someone else
Which items can help you when you categorize your expenses? - Answer - Checkbook register
-Online checking account statement
- Store receipts
- Monthly credit card statements
Why would someone want to keep track of his or her net cash flow? - Answer - to identify
opportunities to save
-To make sure income is larger than expenses
What is the MOST IMPORTANT thing can you do now to improve your net worth 10 years from
now? - Answer - Regularly deposit money into a savings or investment account and don't take
it out
TRUE or FALSE: Investing money always involves some risk. - Answer True
When paying your bills, it is most financially beneficial to make larger payments to: - Answer
The debt with the highest interest rate
Which of the following should you include when calculating your liabilities? - Answer Money
you owe
, Which of the following contribute(s) to your credit history, and therefore to your credit score? -
Answer - Credit Cards
- Student Loans
- Mortgages
Which of the following statements is/are true of U.S. Personal Income Taxes? - Answer -
Almost all income earners must pay some tax
- Taxes are based on income level and marital status
-Taxpayers receive tax credits for some government-approved expenses
Which of the following activities will result in a banking fee? - Answer - Getting a cashiers
check
-Overdrawing your account
It is important to reconcile your checking account every month because - Answer - It helps you
find errors you may have made in your register
-You may discover fees being charged to your account that you didn't know about
- You may find your bank has made an error
-You may see opportunities to improve your budgeting
-It may alert you that your financial identity has been stolen
Which institutions may access your credit score? - Answer - Mortgage lenders
-Credit card issuers
-Landlords
- Prospective employers
-Background investigators
Which of the following is true about SALES TAX? - Answer It makes things more expensive for
you to buy
Amir wants to open a checking account that will pay interest. What is typically true of interest-
bearing checking accounts? - Answer They have higher minimum balance requirements
It is important to know the minimum and maximum amounts of each variable expense because
_________________. - Answer - Then you know the "worst case" for that expense
- Then you can plan for the variances over a year-long period
- Then an increase in the expense can still be accommodated in your spending plan
