WISE PRACTICE TEST 2 STUDY GUIDE 2026
EXAM QUESTIONS AND ANSWERS 100%
CORRECT
⩥ It's important to reconcile your checking account so you can make
sure neither you or the bank have made mistakes. It also guarantees that
you know exactly how much money you have in your checking account.
Answer: True
⩥ Which are institutions that give loans? Answer: Pawn Shop,
Commercial Bank, Credit Union, and Payday Lender
⩥ The Federal Reserve System: Answer: Is the central bank of the
United States, Was created by congress to provide a safer monetary
system, and regulates monetary policies of the United States
⩥ What is deflation? Answer: The rate at which the general level of
prices goes down
⩥ What is a cashier's check? Answer: A check guaranteed by the bank
that writes the check
⩥ What is liquidity in business? Answer: How quickly you can convert
an asset to cash
,⩥ Which savings vehicle is most liquid? Answer: Simple savings
account
⩥ Which of the following will charge the highest interest rate on a loan?
Answer: Payday Lenders
⩥ What is a credit union? Answer: A non-profit institution that is owned
by its members and often provides higher dividends and lower interest
rates on loans
⩥ If you want to have the most money possible for retirement, it is better
to start saving when you're about 15 years away from retirement instead
of when you're younger. Answer: False
⩥ What is a credit card cash advance? Answer: Getting cash from your
credit card (like from an ATM) and paying a high fee for doing so
⩥ What is compound interest? Answer: When you earn interest on your
money and keep it in the bank so you earn interest on it plus your initial
deposit (interest on interest)
⩥ Which earns you more money over time? Answer: Compound Interest
, ⩥ The ____ is the value of money figuring in a given amount of interest
earned over a given amount of time. Answer: Time Value of Money
⩥ The ____ tells you how many years it will take an investment to
double at a particular interest rate. Answer: The Rule of 72
⩥ You should reconcile your checking account _____. Answer: When
you get your monthly bank statement
⩥ The Truth In Lending act means that ____. Answer: The lender must
tell you the amount you have to pay off, including interest
⩥ If you make the MINIMUM payment due on a credit card each
month, ____. Answer: You will end up paying a lot of money in interest
fees and it will take you a long time to pay off your balance
⩥ What is a deductible? Answer: The amount you must pay before your
insurance kicks in (starts paying)
⩥ The Rule of 72 is used to determine how quickly your money will
double at different interest rates. Using this rule, how many years will it
take $10,000 to become $20,000 if you are earning a rate of return of 8%
Answer: 9 Years
EXAM QUESTIONS AND ANSWERS 100%
CORRECT
⩥ It's important to reconcile your checking account so you can make
sure neither you or the bank have made mistakes. It also guarantees that
you know exactly how much money you have in your checking account.
Answer: True
⩥ Which are institutions that give loans? Answer: Pawn Shop,
Commercial Bank, Credit Union, and Payday Lender
⩥ The Federal Reserve System: Answer: Is the central bank of the
United States, Was created by congress to provide a safer monetary
system, and regulates monetary policies of the United States
⩥ What is deflation? Answer: The rate at which the general level of
prices goes down
⩥ What is a cashier's check? Answer: A check guaranteed by the bank
that writes the check
⩥ What is liquidity in business? Answer: How quickly you can convert
an asset to cash
,⩥ Which savings vehicle is most liquid? Answer: Simple savings
account
⩥ Which of the following will charge the highest interest rate on a loan?
Answer: Payday Lenders
⩥ What is a credit union? Answer: A non-profit institution that is owned
by its members and often provides higher dividends and lower interest
rates on loans
⩥ If you want to have the most money possible for retirement, it is better
to start saving when you're about 15 years away from retirement instead
of when you're younger. Answer: False
⩥ What is a credit card cash advance? Answer: Getting cash from your
credit card (like from an ATM) and paying a high fee for doing so
⩥ What is compound interest? Answer: When you earn interest on your
money and keep it in the bank so you earn interest on it plus your initial
deposit (interest on interest)
⩥ Which earns you more money over time? Answer: Compound Interest
, ⩥ The ____ is the value of money figuring in a given amount of interest
earned over a given amount of time. Answer: Time Value of Money
⩥ The ____ tells you how many years it will take an investment to
double at a particular interest rate. Answer: The Rule of 72
⩥ You should reconcile your checking account _____. Answer: When
you get your monthly bank statement
⩥ The Truth In Lending act means that ____. Answer: The lender must
tell you the amount you have to pay off, including interest
⩥ If you make the MINIMUM payment due on a credit card each
month, ____. Answer: You will end up paying a lot of money in interest
fees and it will take you a long time to pay off your balance
⩥ What is a deductible? Answer: The amount you must pay before your
insurance kicks in (starts paying)
⩥ The Rule of 72 is used to determine how quickly your money will
double at different interest rates. Using this rule, how many years will it
take $10,000 to become $20,000 if you are earning a rate of return of 8%
Answer: 9 Years
