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WISE PERSONAL FINANCE TEST STUDY GUIDE QUESTIONS AND ANSWERS
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WISE PERSONAL FINANCE TEST STUDY GUIDE QUESTIONS AND ANSWERS
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Name: Score:96 Multiple choice questions
Term 1 of 96
To determine the time value of depositing in a savings account, a person needs to know the
interest rate and ______
the amount of money saved
the duration of the deposit
the rate of inflation
the bank's fees for maintaining the account
Term 2 of 96
Which types of financial institution pays the highest rate of interest on savings account
balances?
commercial banks
savings and loans
monetary policy
credit unions
Term 3 of 96
When a person is reconciling a checking account and notices that the balance in the
checkbook does not match the balance on the bank statement, which action is it appropriate
for the person to take first?
ignore the discrepancy and continue using the account
immediately deposit more money into the account
close the checking account and open a new one
determine that checks already written have cleared
,Term 4 of 96
What is the advantage to investing in stocks over a 20-year period?
Investing in stocks is risk-free compared to other investments
Savings accounts always yield higher returns than stocks
Stocks are guaranteed to increase in value over time
When stocks are held for a long time, the money invested generally make more than
money in a savings account earning interest
Term 5 of 96
What might cause the price of stock to change on a particular day?
the company changes its ceo to a more popular figure
the company decides to increase its dividend payout
the company announces that it will release a new product
the company reports a loss in quarterly earnings
Term 6 of 96
A person has three credit cards with very large outstanding balances and is unable to make
payments on any of them. Which action should the person take?
Notify the credit card companies and negotiate new terms
Transfer the balances to a new card without payments
File for personal bankruptcy immediately
Ignore the debts and hope they go away
,Term 7 of 96
Carmen sold her stock in ABC company for a higher price per share than she bought it for. She
realized a:
capital gain
leverage
dividend
more of the same stock
Term 8 of 96
A company offers a defined contribution pension to their employees. Upon retirement the
employees receives _______
The total amount of money contributed plus investment earnings
A lump sum payment at retirement
Only the contributions made by the employee
A fixed monthly payment from the company
Term 9 of 96
A person buys a flat screen plasma, theater-like television. The person has homeowner's
insurance. Why would it be appropriate to add a personal property floater to the insurance?
To reduce the monthly premium of the homeowner's insurance
To increase the overall value of the home insurance policy
To ensure the television is covered under warranty
To cover the cost of replacement should the television get damaged or stolen
, Term 10 of 96
A high school student has begun to investigate the field of finance as a career choice. In
deciding about the field, what question does the student focus on first?
How much money can i make in my first year?
Which company pays the highest salary?
Will I find a balance between financial rewards and personal satisfaction?
What is the easiest job in finance?
Term 11 of 96
Victims of predatory lending practices are typically:
individuals with excellent credit scores
the elderly and people with a poor credit history
people who have recently inherited wealth
young professionals with high incomes
Term 12 of 96
Which investment would you choose today if you believe interest rate will go up in the future?
variable rate loans
certificates of deposit
short term savings instruments
the rate of inflation
Term 13 of 96
Shares of stock are also known as:
capital
mutual fund
liabilities
equities
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