WISE Financial Literacy Certification Practice Questions With Correct Answers

WISE Financial Literacy Certification Practice
Questions With Correct Answers

Question |: |To |qualify |for |a |Federal |Housing |Administration |(FHA) |loan, |a |person |must |generally
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| A: |have |at |least |a |high |school |diploma. |

| B: |have |one-quarter |of |the |cost |of |the |home

| for |a |down-payment. |

| C: |fulfill |income |guidelines. |

|D: |provide |two |individuals |to |co-sign |the |loan. |- |CORRECT |ANSWER✔✔-C: |fulfill |income |
guidelines.



A |high |school |student |has |begun |to |investigate |the |field |of |finance |as |a |career |choice. |In |
deciding |about |the |field, |the |student |should |focus |on |which |question |first?
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| A: |Will |I |find |a |balance |between |financial |rewards |and |personal |satisfaction |from |work? |

| B: |How |many |people |do |I |know |who |work |in |this |field? |

| C: |Once |I |train |for |this |area, |how |long |before |I |will |be

| at |the |top |of |the |field? |

| D: |Are |there |people |in |this |field |who |are |dissatisfied

|with |their |jobs? |- |CORRECT |ANSWER✔✔-A: |Will |I |find |a |balance |between |financial |rewards |
and |personal |satisfaction |from |work?



A |type |of |electronic |funds |transfer |(EFT) |is: |
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| A: |A |transaction |made |with |a |check |

,| B: |A |deposit |made |with |a |bank |teller |

| C: |Not |widely |used |by |consumers |

| D: |An |ATM |transaction |- |CORRECT |ANSWER✔✔-D: |An |ATM |transaction



A |company |offers |a |defined-contribution |pension |plan |which |means |that |upon |retirement |the |
employee |will |receive
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| A: |one-half |of |the |employee's |last |year's |salary. |

| B: |the |total |amount |of |money |contributed |plus |investment

| earnings. |

| C: |an |amount |of |money |based |only |on |the |length |of |time

| the |employee |worked |for |the |company. |

| D: |a |specified |amount |of |money |based |totally |on |the |profit

| earned |by |the |company |while |the |employee |worked

|there. |- |CORRECT |ANSWER✔✔-B: |the |total |amount |of |money |contributed |plus |investment |
earnings.



The |interest |earned |on |United |States |Series |EE |Savings |Bonds |is |
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| 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. |- |CORRECT |ANSWER✔✔-A: |exempt |from |state |and
|local |taxes.




Buying |a |treasury |bill |(T-bill) |is |best |for |investors |who |are |looking |for |
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| 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. |- |CORRECT |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 |
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| 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. |- |CORRECT |
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 |
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| A: |her |total |income. |

| B: |the |rate |of |inflation. |

| C: |whether |the |account |is |FDIC |protected. |

|D: |whether |the |bank |offers |overdraft |protection. |- |CORRECT |ANSWER✔✔-B: |the |rate |of |
inflation.



The |amount |a |lender |charges |to |borrow |money |is |called |the: |
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| A: |Principal |

| B: |Annual |Percentage |Rate |(APR) |

| C: |Loan |balance |

| D: |Finance |charge |- |CORRECT |ANSWER✔✔-Correct |Answer |: |D: |Finance |charge