For the past five years, Ralph has had a $20,000 whole life insurance policy that has a cash value clause. The person decides to surrender the policy. At the time of surrender, the person will receive:

a) One-fifth of the $20,000 face value

b) $20,000 less the premiums paid

c) A calculated amount of money which includes part of the premiums paid as well as the interest on that money

d) A calculated amount of money that must be converted to a term life insurance policy

John buys 100 shares of Apple at $100 and two years later sells the shares for $200 each, which of the following is true:

a) He will have a capital loss of $10,000

b) He will have a capital gain of $10,000

c) He will have a dividend of $10,000

d) He will have ordinary income of $10,000

The stock market is performing well and its future is thought to be very positive and promising. This would be considered:

a) A bear market

b) A pig market

c) A lion market

d) A bull market

Sally's health insurance policy requires her to pay the first $500 of medical costs each year before the insurance company will pay any of her medical bills. This policy provision is the:

a) Co-insurance clause

b) Premium

c) Annual deductible

d) Major medical benefit

When Jessie needs health care, she must first go to her primary care physician who coordinates her care and decides whether Jessie should see a specialist. Jessie pays $10 as the co-pay when she sees her primary care doctor. Jessie has which type of health insurance?

a) Fee-for-service health plan

b) Managed care health plan

c) Medicaid health plan

d) Traditional health plan

The only type of life insurance that does not develop a cash value is:

a) Term life insurance

b) Whole life insurance

c) Universal life insurance

d) Variable universal life insurance

A person owns a stock that pays a $2.00 a share dividend. If the person chooses to reinvest that dividend, this means that the $2.00 will go toward buying:

a) More of the same stock.

b) Stocks that are similar to those already owned.

c) Preferred stock in the corporation.

d) Bonds in the corporation.

What is the largest equities market in the world?

a) American Stock Exchange (AMEX)

b) NASDAQ market

c) New York Stock Exchange (NYSE)

d) Over-the-counter (OTC) market

Mutual funds are:

a) An investment portfolio managed by the investor

b) An investment that holds a wide range of different investment instruments, providing diversification

c) Usually less risky than investing in a money market

d) Guaranteed to increase in value

Which of the following is true about Credit Reports?

a) They are a 3 digit number which indicates your creditworthiness and ability to pay your debts

b) You must always pay to receive a credit report

c) You are eligible to receive one free credit report per year from each of the three credit reporting companies

d) If you declare bankruptcy, it does not appear on your credit report

Which of the following is true about bonds?

a) The only way to make money on bonds is through interest payments.

b) Bonds pay interest as well as dividends.

c) The price of a bond remains the same throughout the term of the bond.

d) When interest rates in an economy increase, the price of bonds go down.

Which of the following is NOT true about credit unions?

a) They tend to charge higher interest rates on loans than traditional banks.

b) They tend to pay higher interest rates on CDs and other savings accounts than traditional banks.

c) They are owned by their members who are usually members of a union.

d) They are not-for-profit institutions.

All other things being equal, you would rather that the interest on your savings account be compounded:

a) Daily

b) Monthly

c) Quarterly

d) Annually

The Federal Reserve System (or Fed) is responsible for?

a) Regulating the money supply

b) Setting bank reserve requirements

c) Supplying paper currency

d) All of the above

The Federal Deposit Insurance Corporation (FDIC) insures commercial bank accounts for up to?

a) $100,000

b) $200,000

c) $250,000

d) $150,000

The Securities and Exchange Commission (SEC) was formed to?

a) Help people with their tax reporting

b) Prevent accounting fraud

c) Provide for the defense security of our country

d) Act as an agent for exchanging foreign currency

If you need to cash your certificate of deposit (CD) prior to its maturity date:

a) You lose the full value of your CD

b) You will not be charged a penalty if you pay it back within 30 days

c) You will lose interest and may be subject to a penalty fee

d) None of the above

Where can you go to get a loan?

a) Banks or Credit Unions

b) Finance Companies

c) Pawnshops or Payday Lenders

d) All of the above

Which institutions charge the highest interest rates on loans?

a) Pawnshops

b) Payday lenders

c) Finance companies

d) tax preparers

The new credit card regulations allow consumers to opt in for overdraft protection. This means?

a) No penalties for going over your credit limit

b) You can never go over your credit limit

c) You can go over your credit limit

d) None of the above

The time value of money means?

a) The current worth of future sums of money

b) How many times you forget to save money

c) How many years till retirement

d) How long money can be used before it needs to be replaced

Which type of investment offers more liquidity?

a) One year CD

b) One year treasury bill

c) Savings account

d) 5 year adjustable rate mortgage

According to the rule of 72 how many years will it take for a $100 investment to double assuming a 9% interest rate?

a) 10

b) 6

c) 8

d) 9

Why do you need to reconcile a checking account?

a) To prevent identity theft

b) You don’t need to reconcile a checking account

c) To match your check register to the bank statement

d) You like math

If you default on your student loan?

a) The federal and state government can withold any income tax refunds due you

b) The government can garnish your wages

c) Your credit score will decline

d) All of the above

Tax anticipation loans are?

a) Loans to help cover the cost of taxes due

b) Loans in anticipation of tax refunds

c) Loans to cover payroll taxes

d) None of the above

Which of the following best describes the primary sources of income for most people age 20-35?

a)Dividends and interest

b) Salaries, wages, tips

c)Profits from business

d)Rents

 __________ is access to funds to cover any short-term cash deficiencies.

a)cash management

b)money management

c)Credit management

d)Liquidity

 The purpose of the tax form W-4 is:

a)A form used to file annual income tax returns

b)A form that reports an employee's annual wages and the amount of taxes withheld from his or her paycheck.

c)A form used by your employer to withhold the proper amount of federal income tax from your paycheck

d)All of the above

 Regarding the federal income tax withholding tables, the amount of each employee's earnings withheld is affected by:

a)the age of the employee

b)the number of exemptions claimed

c)the number of years working for the company

d)all of these

 If you give something up as a result of making a decision, you are incurring a(n):

a)net costb)Liquidity problemc)Opportunity costd)Financing cost

Inflation can cause difficulty in many ways. Which group would have the greatest problem during periods of high inflation that last several years?

a)Older, working couples saving for retirement

b)Young working couples with children

c)Older people living on fixed retirement income

d)Young couples with no children who both work

The U.S. Treasury is responsible for:

a) Issuing all Treasury bonds, notes and bills

b) Collection of taxes and enforcement of tax laws (through the IRS)

c) Overseeing U.S. banks

d) All of the above

If your income exceeds the amount that you wish to spend, you should __________ your investments or __________ loans.

a) reduce; repay existing

b) increase; repay existing

c) increase; obtain more

d) reduce; obtain more

Which of the following "backs" the value of money in the United States?

A. The gold stored in the Federal Reserve Bank of New York

B. The acceptability of it as a medium of exchange

C. The willingness of foreign government to hold U.S. dollars

D. The size of the budget surplus in the U.S. government.

To keep high inflation from eroding the value of money, monetary authorities in the United States:

A. Create token money that is less than its intrinsic value

B. Make paper money legal tender for the payment of debt

C. Establish insurance on checkable deposit accounts

D. Control the supply of money in the economy

Which of the following is not true?

a) When a company does an IPO, it is going public

b) When a company goes public those shares are first sold in a secondary market

c) An IPO enables companies to generate money for the company

d) Once a company goes public they must report their financial results to the public

If a person has $450,000 in liabilities and $700,000 in assets, what is their net worth?

a) - $250,000

b) $250,000

c) $450,000

d) $700,000

In which of the following retirement plans would you have money taken from each paycheck as specified by you?

a) Roth Individual Retirement Account (IRA)

b) Traditional IRA

c) 401K plan

d) Social Security

In which of the following retirement plans is the money you contribute placed in a pool for the benefit of many individuals rather than in a plan specifically for you?

a) Roth Individual Retirement Account (IRA)

b) Traditional IRA

c) 401K plan

d) Social Security

If a person’s house could be sold for $500,000 and they currently owe $300,000 on their mortgage, what is the equity they have in the house?

a) Nothing

b) $200,000

c) $300,000

d) $500,000

Why do you need to reconcile a checking account?

a) To prevent identity theft

b) You don’t need to reconcile a checking account

c) To match your check register to the bank statement

d) You like math

If you default on your student loan?

a) The federal and state government can withhold any income tax refunds due you

b) The government can garnish your wages

c) Your credit score will decline

d) All of the above

To keep high inflation from eroding the value of money, monetary authorities in the United States:

A. Create token money that is less than its intrinsic value

B. Make paper money legal tender for the payment of debt

C. Establish insurance on checkable deposit accounts

D. Control the supply of money in the economy

What is a cash loan from a credit card that often has a significantly higher interest rate:

A. Bank Loan

B. Cash Advance

C. Credit Card Loan

D. Credit Advance

Which act regulates what companies can advertise and say about the benefits of their loans or services and what information must be disclosed?

A. Credit CARD Act

B. Fair Credit Reporting Act

C. Truth in Lending Act

D. Credit Repair Organizations Act

How does the degree of risk influence the interest rate charged for a credit card?

A. Higher risk, higher rate

B. Higher risk, lower rate

C. Lower risk, higher rate

D. No influence, everyone gets the same rate

Your debt-to-credit ratio compares:

A. how much you owe with the amount of credit

available to you

B. the average age of your accounts

C. the mix of different categories of credit you have

D. new credit inquiries

Who should you are a victim of identity theft, who should you contact?

A. FDIC

B. FDA

C. FTC

D. FBI

Which of the following is NOT a characteristic of predatory lending?

A. Higher rates than the borrower qualifies for

B. Excess or hidden fees in the amount financed

C. Inadequate disclosure of true costs and risks

D. Loan terms or structures that make it possible to

reduce or pay indebtedness

Which of the following is NOT an example of a loan backed by collateral?

A. Mortgage

B. Car Loan

C. Student Loan

D. Secured Credit Card

Where can you bring in something you own, and if the broker is interested, he will offer you a loan? He keeps your item until you repay the loan. The loan amount will likely be a small fraction of the item's actual value.

A. Bank

B. Pawnshop

C. Government

D. Credit Union

A basic principle of insurance is sharing the financial consequences of events that are unlikely to occur; many people pay to cover the losses of a few. This is known as:

A. Claims

B. Premiums

C. Deductibles

D. Risk Sharing

Collision Insurance will reimburse the insured for any damage sustained to their personal automobile that is due to the fault of the insured driver. When should you drop collision coverage?

A. When you buy a brand new car

B. When you lease a brand new car

C. When your vehicle depreciates in value to $2,500

D. When your vehicle depreciates in value to $25,000