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1 Everfi Financial Literacy & W!SE Exam With Correct Answers
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1 Everfi Financial Literacy & W!SE Exam With Correct Answers
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1 Everfi Financial Literacy & W!SE ExamWith Correct Answers
1040 - Correct Answer - A tax form filled out by an individual and filed with the IRS that determines the
amount of income tax owed in a single year.
401(k) - Correct Answer - A retirement account offered through an employer, where an employee can
contribute money from his or her
paycheck before or after taxes.
403(b) - Correct Answer - A retirement account similar to a 401(k) plan, but offered by non-profit
organizations, like universities or
charitable organizations.
529 college saving plan - Correct Answer - A savings plan offering tax benefits that can be used for any
qualified educational expenses.
Asset - Correct Answer - Property owned by an individual or organization that has some value. Can refer
to physical items (like a house
or car) or to intangible items (like a stock or bond).
Associate's degree - Correct Answer - A degree granted after two years of study, often by a community
or junior college.
ATM Card - Correct Answer - A payment type similar to a debit card that allows you to make electronic
purchases but requires that you
enter a PIN (Personal Identification Number) for any transaction.
,Annual Percentage Rate (APR) - Correct Answer - Another name for the interest rate charged on the
balance of a credit card.
Auto insurance - Correct Answer - A type of insurance that protects a policyholder in the case of a car
accident. Most states require it by law.
Bachelor's degree - Correct Answer - A degree awarded by a college or university for completing four
years of undergraduate studies.
Balance - Correct Answer - The total amount of money in a banking account at any given time.
Balance Transfer - Correct Answer - A transfer of your existing credit card balance to another credit
card. Balance transfers are typically used when
a consumer wants to transfer their credit card debt onto a card with a lower interest rate.
Bonds - Correct Answer - A bond is basically a loan, except that in this case, you're the lender. When
you buy a bond, you loan an
amount of money to the organization issuing the bond at a certain interest rate for a certain period of
time.
You are paid interest from this loan at regular periods, and then, when the bond matures, you get back
your
initial investment plus any additional interest. Treasury and municipal bonds are specific types of bonds.
Budget - Correct Answer - A budget is a plan of how you will spend the money that you make or receive.
Cash Advance - Correct Answer - A loan of cash you obtain with a credit card.
,Certificate of deposit - Correct Answer - A type of savings vehicle in which you put your money away for
a certain amount of time, called a term, to
allow your principal to earn interest.
Charge Card - Correct Answer - A payment type that works just like credit cards except the balance must
be paid in full every month.
Claim - Correct Answer - A claim is the request you make to your insurance company for payment of the
benefits allowed by your
coverage. For instance, if you receive a bill for repairs made to your car, you might submit a claim to
your auto
insurance company to request they pay the bill for you.
Compound Interest - Correct Answer - Compound interest is interest that's generated not only from the
money you put into an account, but also
from the interest you make on that money. In other words, with compound interest, you earn interest
on your
interest.
Compounding frequency - Correct Answer - The number of compounding periods in one year. The
greater the compounding frequency, the more often
your interest is calculated and added back into your account. Daily is much better than annually.
Consilidation Loans - Correct Answer - These combine several student loans into one bigger loan from a
single lender, which is then used to pay off
the balances on the other loans.
Consumer Fraud - Correct Answer - When a product or service is illegally used to deceive you into
sending money or signing up with a phony
, service. Consumer fraud scams frequently start with a fake email, letter or phone call.
Co-Pay - Correct Answer - A fixed fee that an individual pays for specific medical services, like a visit to
the doctor's office.
Coverage - Correct Answer - Your coverage refers to the range of protection you are eligible to receive
from an insurance plan. Insurance
plans can have different coverage even if they're the same type of insurance
Credit Bureaus - Correct Answer - Credit bureaus, also called credit agencies or credit reporting
agencies, are companies that collect credit
information about individuals. They then calculate a credit score for each individual based on this
information.
Note that credit bureaus are private, for- profit businesses-they are not part of the government, though
they
are overseen by various government agencies. In the United States, the three major credit bureaus are
Equifax, Experian, and TransUnion.
Credit Cards - Correct Answer - A credit card is a payment type that does not automatically draw money
from your account. Instead, it
provides a short-term loan that you can use to make everyday purchases. Credit card loans are
unsecured,
which means the credit card company can't take your valuables away from you if you don't pay the loan
back.
This is why credit card companies charge a high interest rate on the money you owe them--so they can
make
money off of your loan.
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