Question
Sara would like to open a bank account. What will she need to do this? Choose three answers.
A. Identification card
B. High school diploma
C. Money to start the account
D. Birth certificate
E. Proof of address
Answer:
A, C and E
Question
Which of the following is most likely to represent a fixed rate, secured debt?
A. A student loan
B. A credit card
C. A loan from a friend
D. A dealer-financed auto loan
Answer:
D. A dealer-financed auto loan
Question
Which of the following types of credits would best describes home equity loans?
A. Closed and secured
B. Closed and unsecured
C. Open and secured
D. Open and unsecured
Answer:
A. Closed and secured
Question
Which of the following is not true if you default on a student loan?
A. You will have your passport taken away.
B. You may be taken to court and have to pay all fees.
C. Your tax refund may be withheld.
D. You may not be eligible for additional financial aid for future studies.
Answer:
A. You will have your passport taken away.
Question
Many checking accounts offer multiple ways of accessing money in addition to checks. Which of these can be used to access money in a checking account?
A. Debit card
B. Credit card
C. Certificate of deposit
D. Passbook
Answer:
A. Debit card
Question
The simple interest on a loan of $200 at 10 percent interest per year is
A. $10 per year until the loan is paid off
B. $15 per year until the loan is paid off
C. $20 per year until the loan is paid off
D. $25 per year until the loan is paid off.
Answer:
C. $20 per year until the loan is paid off
Question
Which of these is an advantage of checking accounts?
A. Checking accounts prevent the customer from having overdraft fees.
B. Checking accounts allow convenient ways to deposit or withdraw funds.
C. Checking accounts are processed immediately so customer and bank records always match.
D. Checking accounts offer limited checks but offer higher rates of interest.
Answer:
B. Checking accounts allow convenient ways to deposit or withdraw funds.
Question
Compare the entries in Lupe’s records with the entries on the bank statement. What other mistake did Lupe make?
A. She recorded a transaction twice.
B. She forgot to record a transaction.
C. She wrote the wrong amount for a transaction.
D. She made a math error when calculating her balance.
Answer:
B. She forgot to record a transaction.
Question
Interest rates on credit cards
A. Can be paid annually
B. Change with the balance
C. Decrease with early payment
D. Can vary widely
Answer:
D. Can vary widely
Question
Sofia has saved $10,000. She wants to be sure that she is earning interest on her money and can add to her savings. She also wants to be able to access her money if the need should arise. Which type of account is most suitable for Sofia’s needs?
A. A money market account
B. A certificate of deposit
C. A savings bond
D. A checking account
Answer:
A. A money market account
Question
What is a closed line of credit?
A. A line of credit with a set maximum credit limit.
B. A line of credit with no interest rate.
C. A line of credit with a fixed total amount.
D. A line of credit with a legally mandated repayment schedule.
Answer:
C. A line of credit with a fixed total amount.
Question
In which situation would a savings bond be the best investment to earn interest?
A. If you need access to your cash quickly
B. If you are saving each month for a new car
C. If you are putting aside a chunk of money to purchase a house in five years
D. Saving to pay a tax bill in four months
Answer:
C. If you are putting aside a chunk of money to purchase a house in five years
Question
What is the major difference between a nationwide bank and a community bank?
A. The community bank offers more services.
B. The nationwide bank services only local customers.
C. The nationwide bank has fewer branches.
D. The community bank services only local customers.
Answer:
D. The community bank services only local customers.
Question
Taking care of your _____ first is a good budgeting strategy that includes covering your loan payments.
Answer:
Needs
Question
Which describes the difference between secured and unsecured credit?
A. Secured credit is backed by an asset equal to the value of a loan, while unsecured credit is not guaranteed by a material object.
B. Unsecured credit is backed by an asset equal to the value of a loan, while secured credit is not guaranteed by a material object.
C. Secured credit is risky because banks cannot seize assets, while unsecured credit is less risky because it is backed by material objects.
D. Unsecured credit enables lenders to seize an asset if a loan is not paid, while secured credit prohibits lenders from taking material objects.
Answer:
A. Secured credit is backed by an asset equal to the value of a loan, while unsecured credit is not guaranteed by a material object.
Question
If Emmett wants to pay off his student loan by making monthly payments for 10 years, what type of repayment plan is best for him?
Answer:
Standard repayment plan
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