Wise Practice Test Exam Questions With 100% Correct Answers 2024/2025
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Wise Practice Test Exam Questions With 100% Correct Answers 2024/2025
Which of the following does the Federal Reserve use to regulate the nation's money supply? (Got Correct)
Correct Answer : C: Monetary policy
Reason : The Federal Reserve uses monetary policy to regulate the nation's money su...
Wise Practice Test Exam Questions With
100% Correct Answers 2024/2025
Which of the following does the Federal Reserve use to regulate the nation's money supply? (Got
Correct)
Correct Answer : C: Monetary policy
Reason : The Federal Reserve uses monetary policy to regulate the nation's money supply. Monetary
policy is directed at expanding or contracting the supply of money and credit in the U.S. economy. In
theory, if there is too little money in circulation, consumers will spend less, interest rates will be high,
and unemployment will rise. In this situation, the Fed can deliberately increase the amount of money
in circulation, leading to lower interest rates, increases in consumer spending, and higher
employment rates. If there is too much money in circulation, however, prices rise and the value of the
dollar decreases (inflation)
Purchases made with your debit card are usually: (Correct)
Correct Answer : A: Deducted immediately from your checking account
Reason : Debit card purchases are immediately deducted from your checking account balance while
credit card purchases are added to your credit card balance. You have about 20 days after receiving a
credit card bill to pay it without being charged interest. Through the use of a credit card, you get use
of goods or services before they are paid for.
The common name for U.S. currency is: (Correct)
Correct Answer : C: Green backs
Reason : The background color of all United States currency (bills) is primarily green.
Question 4 : Jami lost her debit card. She did not report it missing for 3 months. If an unauthorized
person used her debit card, her maximum liability is: (Correct)
Correct Answer : C: Unlimited liability
Reason : According to the Electronic Fund Transfer Act, if a consumer reports the theft or loss of an
ATM or debit card to the issuing financial institution within two business days, he/she is liable for not
more than $50 of unauthorized purchases. If reported within 60 days, the consumer is liable for up to
$500 of unauthorized purchases. If reported after 60 days or not reported, the consumer may be
liable for the entire amount of unauthorized purchases.
Question 5 : Identify the background color of a U.S. $5.00 bill. (Correct)
Correct Answer : C: Green
Reason : The background color of all United States paper currency (bills) is green.
Question 6 : Scott just got an ATM card to use and must choose a PIN (Personal Identification
Number). How should he select a PIN that will give him maximum protection against anyone else
being able to find out what the PIN is? (Incorrect)
Correct Answer : B: Use a random selection of letters and numbers
Reason : A PIN (personal identification number) is a secret code that protects the privacy of your
accounts and allows only you to access them. The numbers should not be composed of numbers
easily associated with the person choosing the PIN such as birth date, telephone number, or street
number address. It should be a random series of numbers and letters that would be hard for
unauthorized users to guess. Also, never write your PIN on your ATM or debit card or in your check
book because then a thief would you?re your confidential information needed to make purchases or
withdraw all the money out of your account.
, Question 7 : A type of electronic funds transfer (EFT) is: (Correct)
Correct Answer : D: An ATM transaction
Reason : According to the Electronic Funds Transfer Act, Electronic funds transfers (EFTs) are any
transfers of funds, other than a transaction originated by check, draft, or other paper instrument,
initiated through electronic terminal, telephone, or computer, to authorize a financial institution to
debit or credit an account. EFT's can be used to carry out many financial transactions, for example, to
pay utility bills, make installment loan payments, and transfer funds from a savings account to a
checking account or vice versa.
Question 8 : A high school student has begun to investigate the field of finance as a career choice. In
deciding about the field, the student should focus on which question first? (Correct)
Correct Answer : A: Will I find a balance between financial rewards and personal satisfaction from
work?
Reason : It is important to investigate a career with the idea of not only getting a sense of earning
potential, types of positions available and the training necessary to acquire these positions but what
are the chances that the individual will enjoy working in this field.
Question 9 :
Nora needed to make a long-distance call from a pay phone and did not have the cash. She was able
to make the call by using her: (Correct)
Correct Answer : C: Cash card
Reason : Consumers purchase cash cards for a specific amount of money. The amount paid is stored in
the card's memory, and the card can be used to pay for goods or services specific to a particular store
or action until the amount stored, or "loaded" on the card, has been spent. The type of cash card
Nora used is called a phone card. Some retail chain stores sell cash cards which can be used to pay for
their products. Cash cards are either disposable or re-loadable. Disposable cash cards cannot be
replenished (loaded again). With re-loadable cash cards, the consumer can return to the merchant
and pay to have the balance on the card replenished.
Question 10 : A cash card generally: (Incorrect)
Correct Answer : B: Is purchased with a specific amount of money that can be used to pay for goods
or services
Reason : Consumers purchase cash cards for a specific amount of money. The amount paid is stored in
the card's memory, and the card can be used to pay for goods or services specific to a particular store
or action until the amount stored, or "loaded" on the card, has been spent. Some retail chain stores
sell cash cards which can be used to pay for their products. Cash cards are either disposable or re-
loadable. Disposable cash cards cannot be replenished (loaded again). With re-loadable cash cards,
the consumer can return to the merchant and pay to have the balance on the card replenished.
Question 1 : Using a brokerage firm, a qualified investor buys 1000 shares of a common stock at $50 a
share on 50% margin. This means that the
Correct Answer : C: brokerage firm is lending the investor 50% of the money.
Reason : Margin is a speculative method whereby an investor borrows up to 50% of the money
needed from a brokerage firm in order to buy a wanted stock and pays a fee for the privilege.
Question 2 : As an investment, a person decides to buy a small house that has three rental
apartments. The profits from this investment may be lower then expected if the
Correct Answer : D: one of the apartments is not rented.
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