TEST YOUR KNOWLEDGE
Financial literacy is the ability to understand and effectively use financial skills. A strong financial foundation of these financial skills will help achieve various life goals like retirement, education, and vacations. Please answer the questions below, and submit them before your next class, Thank you.
1. When you write a check and the check bounces, the bank will charge you a fee. What is that fee called
a. ATM fee
b. Stop payment fee
c. Minimum balance fee
d. Overdraft or non-sufficient funds fee
2. Direct deposit is a way to keep your money safe because:
a. You have the check sent directly to a check-cashing location
b. You cannot withdraw it once you
deposit the check
c. It waives the fee at a check-cashing
d. Your check goes directly to your bank account and there is no risk of misplacing it
3. Reconciling a bank account means:
a. Comparing your monthly bank
statement with your check register
to make sure they match
b. Comparing your monthly deposits with
c. Entering bank fees in your register
d. Listing outstanding checks
4: What is the Rule of 72?
a. A formula that lets you know how
long it will take for your savings
to double in value
b. A rule banks and other financial
institutions use to determine
c. A formula to figure out how much
money you can save
d. A rule you can use in order to determine the annual percentage yield (APY)
5. Select all that apply. Paying yourself first means:
Putting some of your income into a savings account before paying bills.
Buying personal items before paying bills.
Putting money in a savings account if there is any left after paying bills.
Putting tax refunds or cash gifts in a savings account before you spend the money.
6. What should you consider when establishing goals for saving money? Select all that apply.
a. The amount of money you want to save
b. Timeframe of when you need to access the money saved
c. Ways you can cut spending and save
d. The APY of different savings products
e. All of the above
7. If someone offers you a loan, what can you do to make sure it is a good deal?
a. Check to make sure the loan provider
b. Shop around and compare all terms
c. Make sure you can afford the loan
d. All of the above
8. The three main types of loans are:
a. Consumer installment loans, personal
loans, credit cards
b. Home loans, credit cards, consumer
9. An installment loan:
a. Always has changing interest rates
b. Generally, has the same payment
c.Can be used like a check
d. Is the same as rent-to-own
10. Why is credit important? Select all that apply.
It allows you to make a large purchase (e.g., a car or house) and pay for it over time
It can be useful in times of emergencies
It is more convenient and safer than carrying large amounts of cash
It is a loan you do not have to pay back
All of the above
11. What is a secured loan?
a. A loan where no collateral is needed
b. A low interest-rate loan
c. A loan in which you pledge
collateral (something of value like
a house or car) to the lender
d. A loan that can be approved quickly
12. Which of the following refers to how you have paid bills in the past? This is one of the 4-Cs lenders use to determine whether to give you a loan?
d. Credit History
13. When you apply for a lease, the landlord will usually require a
a. A request for new carpeting
b. An interest payment
c. A security deposit and rent paid up
d. Private Mortgage Insurance (PMI)
Should be Empty: