A.False

U.S. money is NOT backed by gold

U.S. money has value based on the confidence in and strength of the U.S. Government

A. A check that cannot bounce

Correct! A cashiers check is prepaid to the bank

B. Withdrawn from your checking account

Wrong Cashier checks and money orders are prepaid

A. High interest rates

Correct Payday loans charge exceptionally high interest rates

B. They are fine

Wrong Payday loans charge exceptionally high interest rates

A. Diversifying your investment portfolio

Wrong “Don’t put all your eggs in one basket.” is the reference to keeping spreading your money out in different securities

B. Advice to develop the habit of saving and building savings into the budget

Correct step #1 when you get a paid is to invest in some savings or investment

A. Determining how much credit you are eligible for

Wrong! That’s the three C’s of Credit

CharacterCapacityCollateral/Capital

B. Putting together your budget

Correct One must be realistic, responsible and show restraint in balancing their budget

A. Surplus/Extra money left over after all expenses are paid

Correct Discretionary income is surplus money in your budget

B. Amount by which spending exceeds income

Wrong A Deficit is when your spend more than your income

A. Monetary Policy

Correct The FED regulates the money supply and interest rates

B. Fiscal Policy

Wrong Fiscal Policy relates to how Congress and the President spend government money and what taxes

A. The yearly cost of a loan

Correct APR is how much you pay on any loan per year

B. The rate of return on an investment for one year

Wrong APY (Annual Percentage Yield) is how much you earn on an investment over one year

A. FDICCorrect Federal

Deposit Insurance Corp. protects your $

in banks

C. SEC Wrong Securities

and Exchange Commission regulates the stock market

B. Federal ReserveWrong The FED

regulates banks, monetary policy

D. IRSWrong Internal

Revenue Service collects taxes

ABA Routing Number

Checking AccountNumber

Check Number Endorsement/Signature

A. Type of bank that is for profit and is owned by many individuals

Wrong Commercial Banks are for profit and are owned by many individuals through stocks

B. Type of bank that is non-profit and owned by its members

Correct Credit Unions provide banking services to its members and is not for profit

Gross Pay

Mandatory Deductions

NET PAY

Optional Deductions

A. Federal Reserve Bank

Wrong Fed does monetary policy

C. Comptroller of the Currency ( OCC )

Correct the OCC regulates Credit Cards

B. IRS

Wrong Internal Revenue Service collects taxes

D. FDIC

Wrong FDIC insures your bank deposits

A. FICA

Wrong Federal Insurance Contributions Act is your Social Security tax

B. Excise tax

Correct excise taxes, also known as “sin” taxes, are placed on consumer goods.

A. A loan repaid with a fixed number of equal sized payments

Correct examples are car loan and mortgage

B. a consumer credit line that can be used up to a certain limit or paid down at any time

Wrong This is open end credit. Example: credit cards 

A. Annualcreditreport.com

Correct Site created by the big three credit reporting agency to comply with the Fair and Accurate Credit Transactions Act, part of the Fair Credit Reporting Act (FCRA)

B. Freecreditreport.com

Wrong! They have a catchy song, but not a free service. This is not attached to federal law in which you are allowed to see your credit report once a year. Been sued repeatedly for fraud.

A. Credit Cards can charge you whatever the market will bear

Wrong but, there IS now a limit to interest rate hikes

B. Being late on ANY bill can trigger an increase in your credit card interest rate

Correct **New rule however, NO LONGER Permitted.

A. The higher your APR

Wrong if your credit score is low, you pay more for loans

B. The lower your APR

Correct The better your credit score the less you pay for loans

A. Contacting the Consumer Credit Counseling Services (CCCS)

Correct There is always a way out, the CCCS is a govt. agency that can help you create a plan

B. Declaring bankruptcy

Wrong This is a worst case scenario after exercising all other avenues

A. The amount you pay when a claim is filed

Correct the deductible is the amount you pick up when filing a claim. The more you are willing to pay the less your insurance will cost

B. The regular payment made to have insurance coverage

Wrong This is called the premium.

A. Is less expensive

Wrong Term Life insurance is cheaper

C. Is for a set amount of time

Wrong that is Term

B. Has cash value

Correct!

D. Has no cash value

Wrong Term Insurance has no cash value( its like renting)

A. Coverage to the policyholder if they are unable to work

Correct If unable to work you are covered

B. Coverage for people who you injure

Wrong This is Liability insurance

A. Governs the process of reorganization of a debtor

Wrong This is Chapter 11 and 13 bankruptcy. The govt. puts you on a plan to pay down your debts.

B. Governs the process of liquidation of a debtor’s assets

Correct Everything you own will be turned into cash to pay your creditors.

A. You lose the money you have accumulated

Wrong the accumulated money does not get wiped

B. You must roll it over into your new jobs 401K

Correct Just move the old 401K or IRA into the new one

A. Never

Wrong you pretty much have to pay a tax for everything at some point

C. Not until 65 Correct

B. Always

Wrong

A. Gender

Wrong Nope, Females pay less, they get in less accidents

B. Driving record

Wrong If you have had accidents/tickets you will pay more

C. Where you live

Wrong you pay more if you live in the city

D. Race/Ethnicity

Correct You cannot be discriminated against for anything based on race/ethnicity

A. US Treasury Bills ( T-Bills)

Wrong These are issued by the federal govt.

B. Corporate Bonds

Wrong These are issued by companies

C. Series EE US Savings Bond

Wrong Issued by Federal Govt.

D. Municipal Bonds

Correct If Mayor Daley needs some money he will issue these types of bonds

A. Blue Chips Maybe:} Blue

chips are stocks that consistently do well over time

B. Speculative Stocks

Maybe:} to speculate is to guess, these carry the most risk

C. Growth Stocks

Maybe:{ Stocks expected to experience large growth

D. Income Stocks

MOST CORRECT! ALL Income Stocks have a dividend ( you get a check in the mail!! Or you can roll it over into buying more stock

A. S+P 500

Wrong Measures top 500 companies

B. NASDAQ Composite

Correct

C. Russell 2000

Wrong this measures top 2000 companies

D. Dow Jones

Wrong measures top 30 companies