WISE Practice Test Questions & Answers

WISE Practice Test Questions &
Answers
Question : When Mary bought a DVD player, she charged it on her credit card. Her purchase
created a(an):



A: Reserve

B: Debt

C: Savings

D: Investment Correct Ans-Correct Answer : B: Debt




Question :A government report indicated that the use of Pax's aspirin-free painkiller resulted in
100 cases of stomach poisoning. A large number of Pax's stockholders are likely to:



A: Buy shares causing the price of the stock to increase

B: Sell shares causing the price of the stock to decline

C: Not react, causing the price of the stock to remain about the same

D: Buy Pax corporate bonds Correct Ans-Correct Answer : B: Sell shares causing the price of
the stock to decline

Reason : The share price is likely to decrease because of the negative publicity and the costs
associated with potential lawsuits and expenses the company will likely incur.



Question : If a business wants to raise capital but not create debt, it can:

,A: Float a bond issue

B: Issue common stock

C: Borrow money from a commercial bank

D: Borrow money from the government Correct Ans-Correct Answer : B: Issue common
stock




Question : Gwen receives a bill from her auto insurance company, and she sends a check to the
company to make sure her policy is not cancelled. The cost of her policy is called the:




A: Co-insurance clause

B: Premium

C: Deductible

D: Exclusion Correct Ans-Correct Answer : B: Premium

Reason : The periodic payment made by a policy owner to keep the policy in force is called the
premium. People can choose to pay the premium once a year (annually), semi-annually,
quarterly, or monthly. Paying a premium annually will cost the least.




Question : When Jessie needs health care, she must first go to her primary care physician who
coordinates her care and decides whether Jessie should see a specialist. Jessie pays $10 as the
co-pay when she sees her primary care doctor. Jessie has which type of health insurance?



A: Fee-for-service health plan

,B: Managed care health plan

C: Medicaid health plan

D: Comprehensive health plan Correct Ans-Correct Answer : B: Managed care health plan




What tax form will you probably fill out the first time you file taxes? Correct Ans-1040EZ




Question : What is the largest equities market in the world?



A: American Stock Exchange (AMEX)

B: NASDAQ market

C: New York Stock Exchange (NYSE)

D: Over-the-counter (OTC) market Correct Ans-The New York Stock Exchange NYSE




RULE of 72: Correct Ans-HOW LONG IT WILL TAKE TO DOUBLE YOUR MONEY at a given
INTEREST RATE= 72/r



When an unmarried individual makes a contribution to a Roth Individual Retirement Account
(IRA) it is: Correct Ans-D: Not currently tax deductible.




A Roth IRA allows a $3000 annual contribution; $3500 if the individual is over 50 years of age.
which is not tax deductible

, Which product is considered to be an investment? Correct Ans-C. A corporate bond.




A financial investment is a choice made by a consumer in anticipation of earning interest.



Julian is a single and recent college graduate who just got his first full-time job. Which of the
following should be his first financial goal? Correct Ans-C. establishing a fund for
emergencies




Which of the following is necessary for successful budgeting? Correct Ans-C. The ability to
adjust spending to money available




An important consideration when saving money for emergencies is: Correct Ans-B. high
degree of safety and liquidity




What does a well designed, successful financial plan include? Correct Ans-C. Retirement
planning




Our values are: Correct Ans-B. The basic principles that guide our actions and beliefs




Jane saw a breakfast cereal being advertised on TV and insisted that her mother purchases this
cereal. This is an example of: Correct Ans-A: power of persuasion in creating demand