WISE FINANCIAL LITERACY CERTIFICATION PRACTICE EXAM
QUESTIONS WITH COMPLETE SOLUTIONS GUARANTEED PASS
BRAND NEW 2025
The interest earned on United States Series EE Savings Bonds is
A: exempt from state and local taxes.
B: paid in a lump sum at the time the face value on the bond is reached.
C: equal to the money paid to purchase it. - ANSWER >>>A: exempt from state and
local taxes.
Buying a treasury bill (T-bill) is best for investors who are looking for
A: a place to invest between $100-$500.
B: a secure, low risk investment.
C: a higher yield on their investment than corporate bonds offer.
D: an investment that matures in 10-30 years. - ANSWER>>>B: a secure, low, risk
investment.
Using a brokerage firm, a qualified investor buys 1000 shares of a common stock at $50
a share on 50% margin. This means that the
A: investor will pay only $5000 for the shares.
,B: investor is buying 2000 shares.
C: brokerage firm is lending the investor 50% of the money.
D: brokerage firm will own 50% of the 1000 shares of stock that were purchased. -
ANSWER >>>C: brokerage firm is lending the investor 50% of the money
To determine the time value of depositing $100 in a savings account, a person needs to
know the interest rate and
A: her total income.
B: the rate of inflation.
C: whether the account is FDIC protected.
D: whether the bank offers overdraft protection. - ANSWER>>>B: the rate of inflation.
The amount a lender charges to borrow money is called the:
A: Principal
B: Annual Percentage Rate (APR)
C: Loan balance
D: Finance charge - ANSWER >>>Correct ANSWER : D: Finance charge
The cost to use someone else's money for a period of time is called the:
A: Interest rate expressed as a percentage
B: Opportunity cost
C: Minimum payment
D: Inflation rate - ANSWER >>>A: Interest rate expressed as a percentage
Interest earned on interest is known as:
A: Simple interest
B: True interest
C: Compounded interest
D: Variable interest - ANSWER >>>C: Compounded interest
, Money received today is worth more than the same amount of money received
sometime in the future is:
A: The Rule of 72
B: The time value of money
C: Not true
D: Investing - ANSWER >>>B: The time value of money
A person buys a flat screen, plasma, theater-like television. The person has
homeowner's insurance. Why would it be appropriate to add a personal property floater
to that insurance?
A: To reduce the premium on the homeowner's insurance.
B: To protect the person who owns the television from liability
for damages.
C: To show the insurance company a good faith investment
has been made.
D: To cover the cost of replacement should the television
get damaged or stolen. - ANSWER>>>D: To cover the cost of replacement should the
television get damaged or stolen.
For the past five years, a person has had a $20,000 whole life insurance policy that has
a cash value clause. The person decides to surrender the policy. At the time of
surrender, the person will receive
A: one-fifth of the $20,000 face value.
B: $20,000 less the premiums paid.
C: a calculated amount of money which includes the
premiums paid as well as the interest on that money. D: a
calculated amount of money that must be converted to
a term life insurance policy. - ANSWER>>>C: a calculated amount of money which
includes the premiums paid as well as the interest on that money.
QUESTIONS WITH COMPLETE SOLUTIONS GUARANTEED PASS
BRAND NEW 2025
The interest earned on United States Series EE Savings Bonds is
A: exempt from state and local taxes.
B: paid in a lump sum at the time the face value on the bond is reached.
C: equal to the money paid to purchase it. - ANSWER >>>A: exempt from state and
local taxes.
Buying a treasury bill (T-bill) is best for investors who are looking for
A: a place to invest between $100-$500.
B: a secure, low risk investment.
C: a higher yield on their investment than corporate bonds offer.
D: an investment that matures in 10-30 years. - ANSWER>>>B: a secure, low, risk
investment.
Using a brokerage firm, a qualified investor buys 1000 shares of a common stock at $50
a share on 50% margin. This means that the
A: investor will pay only $5000 for the shares.
,B: investor is buying 2000 shares.
C: brokerage firm is lending the investor 50% of the money.
D: brokerage firm will own 50% of the 1000 shares of stock that were purchased. -
ANSWER >>>C: brokerage firm is lending the investor 50% of the money
To determine the time value of depositing $100 in a savings account, a person needs to
know the interest rate and
A: her total income.
B: the rate of inflation.
C: whether the account is FDIC protected.
D: whether the bank offers overdraft protection. - ANSWER>>>B: the rate of inflation.
The amount a lender charges to borrow money is called the:
A: Principal
B: Annual Percentage Rate (APR)
C: Loan balance
D: Finance charge - ANSWER >>>Correct ANSWER : D: Finance charge
The cost to use someone else's money for a period of time is called the:
A: Interest rate expressed as a percentage
B: Opportunity cost
C: Minimum payment
D: Inflation rate - ANSWER >>>A: Interest rate expressed as a percentage
Interest earned on interest is known as:
A: Simple interest
B: True interest
C: Compounded interest
D: Variable interest - ANSWER >>>C: Compounded interest
, Money received today is worth more than the same amount of money received
sometime in the future is:
A: The Rule of 72
B: The time value of money
C: Not true
D: Investing - ANSWER >>>B: The time value of money
A person buys a flat screen, plasma, theater-like television. The person has
homeowner's insurance. Why would it be appropriate to add a personal property floater
to that insurance?
A: To reduce the premium on the homeowner's insurance.
B: To protect the person who owns the television from liability
for damages.
C: To show the insurance company a good faith investment
has been made.
D: To cover the cost of replacement should the television
get damaged or stolen. - ANSWER>>>D: To cover the cost of replacement should the
television get damaged or stolen.
For the past five years, a person has had a $20,000 whole life insurance policy that has
a cash value clause. The person decides to surrender the policy. At the time of
surrender, the person will receive
A: one-fifth of the $20,000 face value.
B: $20,000 less the premiums paid.
C: a calculated amount of money which includes the
premiums paid as well as the interest on that money. D: a
calculated amount of money that must be converted to
a term life insurance policy. - ANSWER>>>C: a calculated amount of money which
includes the premiums paid as well as the interest on that money.
