WISE Financial Literacy Certification Practice Questions with
Verified Answers Graded A
Question : To qualify for a Federal Housing employee will receive
Administration (FHA) loan, a person must
generally A: one-half of the employee's last year's salary.
B: the total amount of money contributed plus
A: have at least a high school diploma. investment
B: have one-quarter of the cost of the home earnings.
for a down-payment. C: an amount of money based only on the length
C: fulfill income guidelines. of time
D: provide two individuals to co-sign the loan. - the employee worked for the company.
ANSWER -C: fulfill income guidelines. D: a specified amount of money based totally on
the profit
earned by the company while the employee
worked
A high school student has begun to investigate there. - ANSWER -B: the total amount of
the field of finance as a career choice. In money contributed plus investment earnings.
deciding about the field, the student should focus
on which question first?
A: Will I find a balance between financial The interest earned on United States Series EE
rewards and personal satisfaction from work? Savings Bonds is
B: How many people do I know who work in this
field? A: exempt from state and local taxes.
C: Once I train for this area, how long before I B: paid in a lump sum at the time the face value
will be on the bond is reached.
at the top of the field? C: equal to the money paid to purchase it. -
D: Are there people in this field who are ANSWER -A: exempt from state and local
dissatisfied taxes.
with their jobs? - ANSWER -A: Will I find a
balance between financial rewards and personal
satisfaction from work?
Buying a treasury bill (T-bill) is best for investors
who are looking for
A type of electronic funds transfer (EFT) is: A: a place to invest between $100-$500.
B: a secure, low risk investment.
A: A transaction made with a check C: a higher yield on their investment than
B: A deposit made with a bank teller corporate bonds offer.
C: Not widely used by consumers D: an investment that matures in 10-30 years. -
D: An ATM transaction - ANSWER -D: An ANSWER -B: a secure, low, risk
ATM transaction investment.
A company offers a defined-contribution pension Using a brokerage firm, a qualified investor buys
plan which means that upon retirement the 1000 shares of a common stock at $50 a share
1/9
, WISE Financial Literacy Certification Practice Questions with
Verified Answers Graded A
on 50% margin. This means that the
A: investor will pay only $5000 for the shares. Interest earned on interest is known as:
B: investor is buying 2000 shares.
C: brokerage firm is lending the investor 50% of A: Simple interest
the money. B: True interest
D: brokerage firm will own 50% of the 1000 C: Compounded interest
shares of stock that were purchased. - D: Variable interest - ANSWER -C:
ANSWER -C: brokerage firm is lending the Compounded interest
investor 50% of the money
Money received today is worth more than the
To determine the time value of depositing $100 same amount of money received sometime in the
in a savings account, a person needs to know future is:
the interest rate and
A: The Rule of 72
A: her total income. B: The time value of money
B: the rate of inflation. C: Not true
C: whether the account is FDIC protected. D: Investing - ANSWER -B: The time value
D: whether the bank offers overdraft protection. - of money
ANSWER -B: the rate of inflation.
A person buys a flat screen, plasma, theater-like
The amount a lender charges to borrow money is television. The person has homeowner's
called the: insurance. Why would it be appropriate to add a
personal property floater to that insurance?
A: Principal A: To reduce the premium on the homeowner's
B: Annual Percentage Rate (APR) insurance.
C: Loan balance B: To protect the person who owns the television
D: Finance charge - ANSWER -Correct from
Answer : D: Finance charge liability for damages.
C: To show the insurance company a good faith
investment
has been made.
The cost to use someone else's money for a D: To cover the cost of replacement should the
period of time is called the: television
get damaged or stolen. - ANSWER -D: To
A: Interest rate expressed as a percentage cover the cost of replacement should the
B: Opportunity cost television get damaged or stolen.
C: Minimum payment
D: Inflation rate - ANSWER -A: Interest
rate expressed as a percentage
For the past five years, a person has had a
2/9
Verified Answers Graded A
Question : To qualify for a Federal Housing employee will receive
Administration (FHA) loan, a person must
generally A: one-half of the employee's last year's salary.
B: the total amount of money contributed plus
A: have at least a high school diploma. investment
B: have one-quarter of the cost of the home earnings.
for a down-payment. C: an amount of money based only on the length
C: fulfill income guidelines. of time
D: provide two individuals to co-sign the loan. - the employee worked for the company.
ANSWER -C: fulfill income guidelines. D: a specified amount of money based totally on
the profit
earned by the company while the employee
worked
A high school student has begun to investigate there. - ANSWER -B: the total amount of
the field of finance as a career choice. In money contributed plus investment earnings.
deciding about the field, the student should focus
on which question first?
A: Will I find a balance between financial The interest earned on United States Series EE
rewards and personal satisfaction from work? Savings Bonds is
B: How many people do I know who work in this
field? A: exempt from state and local taxes.
C: Once I train for this area, how long before I B: paid in a lump sum at the time the face value
will be on the bond is reached.
at the top of the field? C: equal to the money paid to purchase it. -
D: Are there people in this field who are ANSWER -A: exempt from state and local
dissatisfied taxes.
with their jobs? - ANSWER -A: Will I find a
balance between financial rewards and personal
satisfaction from work?
Buying a treasury bill (T-bill) is best for investors
who are looking for
A type of electronic funds transfer (EFT) is: A: a place to invest between $100-$500.
B: a secure, low risk investment.
A: A transaction made with a check C: a higher yield on their investment than
B: A deposit made with a bank teller corporate bonds offer.
C: Not widely used by consumers D: an investment that matures in 10-30 years. -
D: An ATM transaction - ANSWER -D: An ANSWER -B: a secure, low, risk
ATM transaction investment.
A company offers a defined-contribution pension Using a brokerage firm, a qualified investor buys
plan which means that upon retirement the 1000 shares of a common stock at $50 a share
1/9
, WISE Financial Literacy Certification Practice Questions with
Verified Answers Graded A
on 50% margin. This means that the
A: investor will pay only $5000 for the shares. Interest earned on interest is known as:
B: investor is buying 2000 shares.
C: brokerage firm is lending the investor 50% of A: Simple interest
the money. B: True interest
D: brokerage firm will own 50% of the 1000 C: Compounded interest
shares of stock that were purchased. - D: Variable interest - ANSWER -C:
ANSWER -C: brokerage firm is lending the Compounded interest
investor 50% of the money
Money received today is worth more than the
To determine the time value of depositing $100 same amount of money received sometime in the
in a savings account, a person needs to know future is:
the interest rate and
A: The Rule of 72
A: her total income. B: The time value of money
B: the rate of inflation. C: Not true
C: whether the account is FDIC protected. D: Investing - ANSWER -B: The time value
D: whether the bank offers overdraft protection. - of money
ANSWER -B: the rate of inflation.
A person buys a flat screen, plasma, theater-like
The amount a lender charges to borrow money is television. The person has homeowner's
called the: insurance. Why would it be appropriate to add a
personal property floater to that insurance?
A: Principal A: To reduce the premium on the homeowner's
B: Annual Percentage Rate (APR) insurance.
C: Loan balance B: To protect the person who owns the television
D: Finance charge - ANSWER -Correct from
Answer : D: Finance charge liability for damages.
C: To show the insurance company a good faith
investment
has been made.
The cost to use someone else's money for a D: To cover the cost of replacement should the
period of time is called the: television
get damaged or stolen. - ANSWER -D: To
A: Interest rate expressed as a percentage cover the cost of replacement should the
B: Opportunity cost television get damaged or stolen.
C: Minimum payment
D: Inflation rate - ANSWER -A: Interest
rate expressed as a percentage
For the past five years, a person has had a
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