WISE Financial Literacy Certification
Term Review Questions and Answers
100% Pass
sources of income - CORRECT ANSWER-wages
gifts
government benefits
capital gains
tax exemption - CORRECT ANSWER-a deduction allowed by law to reduce the
amount of income that would otherwise be taxed
liquidity - CORRECT ANSWER-the ease in which an asset can be bought or sold
ex. cash, stocks/bonds, checks, gold/precious metals, checking and savings
acounts
discretionary income/budget surplus - CORRECT ANSWER-the amount of
income left for spending after taxes
money orders - CORRECT ANSWER-exchangeable for cash
works like a check
, bought if you don't have a bank account
opportunity cost - CORRECT ANSWER-the value of the best alternative given up
US treasury department - CORRECT ANSWER-manages government revenue
they issue bonds, notes, and bills
pay yourself first - CORRECT ANSWER-put money into savings and retirement
accounts to avoid spending it
certificate of deposit (CD) - CORRECT ANSWER-a certificate issued by a bank
to a person depositing money for a specified length of time (at a set interest rate)
avoids holders from withdrawing funds on demand (before it matures)
maturity- when the term ends
if redeemed before matured, you may have to pay a fine or forfeit a portion of the
interest you earned on it
institutions that give loans - CORRECT ANSWER-banks, credit unions (low
interest)
pawnshops, finance companies, payday lenders, tax preparers (high interest)
credit union - CORRECT ANSWER-a non profit-making money cooperative
whose members can benefit from lower interest rates on loan and higher interest
rates on investments
Term Review Questions and Answers
100% Pass
sources of income - CORRECT ANSWER-wages
gifts
government benefits
capital gains
tax exemption - CORRECT ANSWER-a deduction allowed by law to reduce the
amount of income that would otherwise be taxed
liquidity - CORRECT ANSWER-the ease in which an asset can be bought or sold
ex. cash, stocks/bonds, checks, gold/precious metals, checking and savings
acounts
discretionary income/budget surplus - CORRECT ANSWER-the amount of
income left for spending after taxes
money orders - CORRECT ANSWER-exchangeable for cash
works like a check
, bought if you don't have a bank account
opportunity cost - CORRECT ANSWER-the value of the best alternative given up
US treasury department - CORRECT ANSWER-manages government revenue
they issue bonds, notes, and bills
pay yourself first - CORRECT ANSWER-put money into savings and retirement
accounts to avoid spending it
certificate of deposit (CD) - CORRECT ANSWER-a certificate issued by a bank
to a person depositing money for a specified length of time (at a set interest rate)
avoids holders from withdrawing funds on demand (before it matures)
maturity- when the term ends
if redeemed before matured, you may have to pay a fine or forfeit a portion of the
interest you earned on it
institutions that give loans - CORRECT ANSWER-banks, credit unions (low
interest)
pawnshops, finance companies, payday lenders, tax preparers (high interest)
credit union - CORRECT ANSWER-a non profit-making money cooperative
whose members can benefit from lower interest rates on loan and higher interest
rates on investments
