Personal Finance Basics, Exams of Nursing

Download Personal Finance Basics and more Exams Nursing in PDF only on Docsity! WISE Test Questions and Answers One of Andre's seldom-used credit cards has been stolen without his knowledge. When he gets his monthly statement, he realizes that someone else has been using the card and reports it stolen. The maximum amount of unauthorized purchases he is liable for is: - Answer $50 Consumers who file for bankruptcy are still responsible for: - Answer Tax claims and student loans Which of the following provides an increase in assets or wealth? - Answer Having capital gains The denominations of coins in the United States are: - Answer $.01, $.05, $.10, $.25, $.50, $1.00 Mutual funds are: - Answer An investment that holds a wide range of different investment instruments, providing diversification Michele and Claudia have a seven year old son. They won $50,000 on a TV games show and want to put it away for their son's education. Which of the following has the highest potential growth and the highest risk? - Answer Common Stock Banks use savings account deposits to: - Answer Give loans to consumers and businesses You have a checking account balance of $100 and you deposit a personal $200 check from your brother in you checking account. When will you be able to withdraw $150 in cash? - Answer 3 to 7 days later, depending on your bank's check clearance policy Why is term life insurance usually the least expensive type of life insurance? - Answer The policy only pays a death benefit Neil will be traveling by air in Southeast Asia for six-week vacation. Which step will not provide protection during the trip? - Answer Take his passport Victims of predatory lending practices are typically: - Answer The elderly and people with a poor credit history How can you avoid becoming a victim of identity theft? - Answer Avoid giving your Social Security number on a phone call you did not initate Which of the following statements is usually true about indivuals who are financially literate? - Answer They understand the basics of personal finance and money management Which of the following is a disadvantage of using phone cards, debit cards, electronic transfers, and ATM cards? - Answer They expose consumers to greater likelihood of identity theft The price of the Candy Corporation Stock will generally increase when there is: - Answer Positive news about corporate earnings The process of setting aside money and putting it to work by having it earn intrest or dividends or gain value in the equities market with the idea of having additional funds to use in the future is described as: - Answer Savings and Investing The most liquid type of investment is: - Answer A money market account Joan wants to open a checking account and wonders if checking accounts pay interest. How would you answer her question? - Answer Some types of checking accounts pay interest The purpose of Insurance is NOT to: - Answer Diversify an investment portfolio Generally, the higher the deductible on an insurance policy, the - Answer Lower the premium A credit card finance charge is: - Answer The dollar amount it cost to use credit Approximately, what is the annual finance charge for each $100 owed on a credit card with a 16% annual interest rate (APR)? - Answer $16.00 New coins and currency make their way into the general economy, consumers and businesses, through the distribution system of the: - Answer Federal Reserve System Which of the following provides an increase in assets or wealth? - Answer Having capital gains A factor that is likely to affect the market price of a stock is: - Answer Corporate profits An investor buys 100 shares of a common stock @ $36.00 a share. The stock is now selling at $38.00 a share. When deciding whether to hold or sell the stock, which factor is it important for the investor to consider? - Answer The commission charged for buying and selling the stock government angency is obligated to reimbure Susan because she authorized Marie to use her ATM card and PIN The primary sources of income for most people between the ages of 20 and 35 who are not living on a pension or social security are: - Answer Salaries, wages, and tips Shares of stock are also known as: - Answer Equities When James received his pay check, he planned to cash it at a check cashing store. You advise him to cash it at his own bank if possible. Why? - Answer They typically charge high fees Which documents should be stored in a safe-deposit box? - Answer Mortgage loan papers. Lucy has no insurance. The situation(s) should she consider insuring against first are: - Answer Losses resulting from an illness, accident, or disability Which factor would most likely lead to an increase the interest rate on a person's credit card? - Answer Late payments John has a college student loan that he has to repay after he graduates. He will make his monthly payments over ten years. He has the following kind of loans: - Answer Installment Jami lost her debit card. She did not report it missing for 3 months. If the unauthorized person used her debit card, her maximum libility is: - Answer Unlimited liability Lisa lost her debt card. She did not report it missing for one week. If an unauthorized person used her debit card, her maximum liability is: - Answer $500 Dalton lost her debit card. She reported it missing within two days. If an unauthorized person used her debit card, her maximum liablity is: - Answer $50 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? - Answer Will I find a balance between financial rewards and persnal satisfaction from work? If a business wants to raise capital but not create debt, it can: - Answer Issue common stock Consumer finance companies, which are often advertised on TV, are also known as: - Answer Small loan companies You have a $2,000 loss. Your insurance company pays you $1,500 on the claim for the loss. The $500 the insurance did not pay is a result of your policy having a: - Answer Deductible Jim is a college senior with $50,000 in student loans. He earned $2,000 last year. He has no savings so he charged a $5,000 vacation on his credit card. How would you characterize Jim's use of credit? - Answer It is irresponsible use of credit because his current income is low Which statement is FALSE about most ATM (Automated Teller Machine) cards? - Answer You can always get cash anywhere in the world with no fee. Which statment best decribes the relationship between a person's education level and that person's potential earning power? - Answer A person with a professional degree is likely to earn at least four times as much per year as a person who did not complete high school. A blue-chip stock can be described as: - Answer A stock with a good reputation for quality management, products and services Which financial product can you buy for $25, is safe,and will be worth $50 at a future date? - Answer Series EE savings bond Patty is selling her car through a newspaper advertisement. When she finds a buyer, she wants to form of payment which is guaranteed to be good. Which form of payment should she avoid? - Answer A check Debbie was behind on her stereo installment credit contract payments. As a result, the creditor seized and sold the stereo. The sale price did not cover all the loan balance, the creditor got a court to order her employer to withhold part of her wages. This court order is called: - Answer Gamishment Robyn is an investor. Which financial product makes her a shareholder in a corporation? - Answer Common stocks Employees prefer direct deposits because: - Answer The money is generally deposited in thier checking account sooner than it would be if they had to deposit it in person Traverlers checks, often use for vacations: - Answer Function as cash and are easily replaced if lost Ben's truck is crushed by a hit-and-run driver. Scott is hit by an uninsured driver. How will they receive payments? - Answer Uninsured or no-fault motorist coverage Predatory lending practices do not include which of the follwoing: - Answer A loan that you can afford with an interest rate that is the same as the interest rate being charged by at least three other financial instituions What is the chief reason corporations issue stock? - Answer To raise money for the corporation Who uses consumer credit reports in making decisions? - Answer Lenders Why is maintaining a good credit history important to your future? - Answer A good credit history can help your obtain a job, or a loan. When John bought a Microsoft bond, he was: - Answer Lending money to Microsoft A publicly held corporation announces it is planning to merge with another publicly held corporation. Based on this information, an investor should be aware that the price of the stock - Answer is unpredictble Debbie owns a clothing store. She is concerned that a consumer who is injured in the store will sue. Which type of insurance should Debbie purchase? - Answer Liability insureance The only type of life insurance that does not develop a cash value is: - Answer Term life insurance You used your credit card to buy flower at the florist. The dollar amount of the purchase was: - Answer Added to your credit card bill and you pay for it at a later date The price of a security may be affect by: - Answer Current events The best reason for depositing money in a bank or credit union savings account instead of keeping your money "under the mattress" is that: - Answer Money deposited in savings accounts are F.D.I.C. insured Which financial product typically pays the highest rate of intrest - Answer Certificate of deposit When Jessie needs health care, she must first go to her primary care physucuan who coordinates her care and decides whether Jessie should see a specialist. Jessie pays a $10 as the co-pay when she sees her primary care doctor. Jessie has which type of health insurance? - Answer Managed care health plan Maxine has an auto loan that she has to pay. She will make monthly payments over five years. She has a(an): - Answer Installement loan George received a dividend from the company in which he is a stockholder. A dividend is: - Answer Distribution of part of the company's profit The activity of the New York Stock Exchange most closely resembles: - Answer An auction house What action should a person take who must make a tuition payment at the end of August each year? - Answer Decide how much money will be needed and then place 1/12th of that amount in a separate account each month. Predatory lending practices generally include: - Answer Very high interest and fees Why does a corporation issue bonds? - Answer To raise money for expansion or other company operations The best suggestion you gave a friend who is writing a check for the first time is: - Answer Date the check because it usually proof of payment A type of electronic funds transfer (EFT) is: - Answer An ATM transaction You are behind on your debt payments and go to a responsible credit counseling service, the Consumer Credit Counseling Services. How can they help you? - Answer They can work with those who loaned you money to set up a repayment schedule you can afford to make. Dawn graduated from high school and wants to get a credit card. How can Dawn establish credit-worthiness? - Answer Opening a checking account, making regular deposits, and avoiding penalties for insufficient funds. To make sure you will always remember your automated teller machine (ATM) card person identification number (PIN), you should write the PIN and keep it: - Answer In a secure place at home The National Creedit Union Administration (NCUA) insures accounts in: - Answer Credit unions When a borrower fails to repay a loan and there is a co-signer on the loan, the most likely result will be: - Answer The co-signer will be held responsible for the repayment of the entire loan plus fees or penalties. Which of the following lenders charge the highest interest rate? - Answer Pawn shop Matthew and Aliciia just had a baby. They received money as baby gifts and want to put it away for the baby's college tuition. Which of the following has the lowest potential growth rate over the next 18 years? - Answer Savings accounts Doug wants to buy a car in two months, but does not have enough money. What is the best way for Doug to get the money he needs? - Answer Take out a cash loan "The Fed" is short for: - Answer The Federal Reserve System A person buys a homeowner's insurance policy with a $250 deductible, which means the person will: - Answer Have to pay the first $250 which will be deducted from the claim settlement paid by the insurance company. Gwen recieves a bill from her atuo insurance company, and she sends a check to the company to make sure her policy is not cancalled. The cost of her policy is called the: - Answer Premium Erika and Mark recieved an inheritance of $100,000. They plan to invest their inheritance money to buy a house in six years. Which of the following carries the greatest risk? - Answer Common Bonds Pat has a savings account and a car loan from a not-for-profit financial institution owned by its members. She is probably a member of what type of financial institution? - Answer Credit union Claire got a new credit card from American Bank and wants to cancle her USA credit card. The best method is to dispose of her USA credit card is to: - Answer Cut up the card, put parts in different garbage bags, and instruct the credit card company in writing or by phone to close the account A teenage boy has opened a checking account. He is surprised to find that though he is getting a written bank statement each month he is not getting his cancelled checks returned. The teenager should be aware that the reason cancelled checks are NOT returned is to - Answer Save to bank money associated with returning copies of these checks.