WISE Financial Literacy Certification
Practice Questions Solved 2024
A 60-year-old makes a withdrawal from his Roth Individual Retirement Account (IRA).
The money withdrawn will be
A: tax free.
B: taxed based on the interest earned.
C: taxed at lower rate than regular earnings.
D: looked upon as Social Security income. - ANSWER-Correct Answer A: tax free
A company offers a defined-contribution pension plan which means that upon retirement
the employee will receive
A: one-half of the employee's last year's salary.
B: the total amount of money contributed plus investment
earnings.
C: an amount of money based only on the length of time
the employee worked for the company.
D: a specified amount of money based totally on the profit
earned by the company while the employee worked
there. - ANSWER-B: the total amount of money contributed plus investment earnings.
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?
A: Will I find a balance between financial rewards and personal satisfaction from work?
B: How many people do I know who work in this field?
C: Once I train for this area, how long before I will be
at the top of the field?
D: Are there people in this field who are dissatisfied
with their jobs? - ANSWER-A: Will I find a balance between financial rewards and
personal satisfaction from work?
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 that insurance?
A: To reduce the premium on the homeowner's insurance.
B: To protect the person who owns the television from
liability for damages.
C: To show the insurance company a good faith investment
has been made.
D: To cover the cost of replacement should the television
, get damaged or stolen. - ANSWER-D: To cover the cost of replacement should the
television get damaged or stolen.
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?
A: Notify a credit reporting agency in order to avoid a late
fee.
B: File for bankruptcy in order to maintain ones current
credit score.
C: Notify the credit card companies in order to negotiate
a new payment plan.
D: Contact the Internal Revenue Service in order to avoid
paying income tax this year. - ANSWER-C: Notify the credit card companies in order to
negotiate a new payment plan.
A type of electronic funds transfer (EFT) is:
A: A transaction made with a check
B: A deposit made with a bank teller
C: Not widely used by consumers
D: An ATM transaction - ANSWER-D: An ATM transaction
Buying a treasury bill (T-bill) is best for investors who are looking for
A: a place to invest between $100-$500.
B: a secure, low risk investment.
C: a higher yield on their investment than corporate bonds offer.
D: an investment that matures in 10-30 years. - ANSWER-B: a secure, low, risk
investment.
Employees prefer direct deposits because:
A: There is a small fee for the service
B: The danger of losing a paycheck is slightly reduced
C: The money is generally deposited in their checking account sooner than it would be
if they had to deposit it in person
D: Direct deposits earn a higher rate of interest - ANSWER-C: The money is generally
deposited in their checking account sooner than it would be if they had to deposit it in
person
For the past five years, a person 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.
Practice Questions Solved 2024
A 60-year-old makes a withdrawal from his Roth Individual Retirement Account (IRA).
The money withdrawn will be
A: tax free.
B: taxed based on the interest earned.
C: taxed at lower rate than regular earnings.
D: looked upon as Social Security income. - ANSWER-Correct Answer A: tax free
A company offers a defined-contribution pension plan which means that upon retirement
the employee will receive
A: one-half of the employee's last year's salary.
B: the total amount of money contributed plus investment
earnings.
C: an amount of money based only on the length of time
the employee worked for the company.
D: a specified amount of money based totally on the profit
earned by the company while the employee worked
there. - ANSWER-B: the total amount of money contributed plus investment earnings.
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?
A: Will I find a balance between financial rewards and personal satisfaction from work?
B: How many people do I know who work in this field?
C: Once I train for this area, how long before I will be
at the top of the field?
D: Are there people in this field who are dissatisfied
with their jobs? - ANSWER-A: Will I find a balance between financial rewards and
personal satisfaction from work?
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 that insurance?
A: To reduce the premium on the homeowner's insurance.
B: To protect the person who owns the television from
liability for damages.
C: To show the insurance company a good faith investment
has been made.
D: To cover the cost of replacement should the television
, get damaged or stolen. - ANSWER-D: To cover the cost of replacement should the
television get damaged or stolen.
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?
A: Notify a credit reporting agency in order to avoid a late
fee.
B: File for bankruptcy in order to maintain ones current
credit score.
C: Notify the credit card companies in order to negotiate
a new payment plan.
D: Contact the Internal Revenue Service in order to avoid
paying income tax this year. - ANSWER-C: Notify the credit card companies in order to
negotiate a new payment plan.
A type of electronic funds transfer (EFT) is:
A: A transaction made with a check
B: A deposit made with a bank teller
C: Not widely used by consumers
D: An ATM transaction - ANSWER-D: An ATM transaction
Buying a treasury bill (T-bill) is best for investors who are looking for
A: a place to invest between $100-$500.
B: a secure, low risk investment.
C: a higher yield on their investment than corporate bonds offer.
D: an investment that matures in 10-30 years. - ANSWER-B: a secure, low, risk
investment.
Employees prefer direct deposits because:
A: There is a small fee for the service
B: The danger of losing a paycheck is slightly reduced
C: The money is generally deposited in their checking account sooner than it would be
if they had to deposit it in person
D: Direct deposits earn a higher rate of interest - ANSWER-C: The money is generally
deposited in their checking account sooner than it would be if they had to deposit it in
person
For the past five years, a person 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.
