Everfi Final Test

Front 1

Interest is...

Back 1

The amount owed for borrowing money.

Front 2

To earn as much interest as possible, you should open a savings account that earns _______ interest and has the ______ interest rate.

Back 2

Compound; highest

Front 3

John just opened a savings account and wants to maximize the amount of interest he earns. Which of the following actions would enable him to earn MORE interest?

Back 3

Selecting an account with a high interest rate and leaving his money in the account for long period of time

Front 4

You are opening a savings account that earns compound interest. Which compounding frequency will earn you the MOST money?

Back 4

Compounding daily

Front 5

Which of the following is a type of savings vehicle?

Back 5

Certificate of Deposit and Money Market Account

Front 6

Which of the following is generally true about savings vehicles?

Back 6

People should evaluate different forms of savings vehicles based on their needs

Front 7

Which of the following savings vehicles usually requires a high minimum balance?

Back 7

Certificate of Deposit (CD)

Front 8

Which of the following accounts will give you the LEAST access to your money?

Back 8

Certificate of Deposit (CD)

Front 9

The purpose of a budget is to:

Back 9

Help you plan how you will spend the money you earn or receive

Front 10

When it comes to saving money, what is a good rule of thumb?

Back 10

Put aside money for savings each month

Front 11

Which of the following is NOT one of the responsibilities of the Federal Reserve?

Back 11

Establishing the federal budget

Front 12

Which type of account is typically the MOST liquid?

Back 12

Checking account

Front 13

Savings accounts usually offer _________ interest rates than checking accounts. It is _________ to access your money in a savings account than in a checking account.

Back 13

Higher; harder

Front 14

The three parts of the Federal Reserve System are the Reserve Banks, the Federal Open Market Committee (FOMC), and the:

Back 14

Board of Governors

Front 15

Which of the following is a unique feature of credit unions?

Back 15

Credit unions are typically owned and run by their members and credit unions limit membership to certain people or groups

Front 16

What part of a check is the LEAST important?

Back 16

Memo line

Front 17

Which of the following represent typical account fees?

Back 17

ATM fee, service fee, and minimum balance fee

Front 18

What's the best strategy for avoiding ATM fees?

Back 18

Only use ATMs in your bank's network

Front 19

What's the purpose of balancing or monitoring your checking account?

Back 19

To help you calculate how much money you have in your account

Front 20

The best way to ensure the accuracy and safety of your accounts is to:

Back 20

Monitor your online accounts regularly

Front 21

Which of the following payment types require you to pay upfront?

Back 21

Money order, cashier's check, and pre-paid card

Front 22

Which of the following statements comparing debit cards to credit cards is TRUE?

Back 22

Debit cards allow you to draw funds directly from your checking account

Front 23

Which payment method typically charges the highest interest rates?

Back 23

Payday loans

Front 24

Which payment type can help you stick to a budget?

Back 24

Debit cards

Front 25

If you are planning to carry a large balance on your credit card, which of the following credit card features should you look for?

Back 25

Low APR

Front 26

The annual percentage rate on a credit card determines _______.

Back 26

The amount of interest you are charged on credit card purchases

Front 27

Making a credit card minimum payment:

Back 27

Means you are paying a small portion of your total credit card debt

Front 28

Which of the following can increase your credit card's APR?

Back 28

Missing a credit card payment

Front 29

What is a credit card balance?

Back 29

The amount of money you still owe to the credit card company

Front 30

Which of the following is NOT a common credit card fee?

Back 30

Minimum payment fee

Front 31

Which of the following statements about credit scores is TRUE?

Back 31

Credit scores reflect how likely individuals are to repay their debts, credit scores range from the low 300's to the mid 800's, and each person has three credit scores

Front 32

Having a good credit score is important because:

Back 32

It can impact your ability to be approved for bank loans

Front 33

All of the following make up the big three credit reporting agencies EXCEPT:

Back 33

Federal Reserve

Front 34

Which of the following actions can NEGATIVELY impact your credit score?

Back 34

You forgot to pay the cable bill

Front 35

Which of the following actions has NO impact on your credit score?

Back 35

You inquire about a credit card charge

Front 36

Which of the following MOST influences your credit score?

Back 36

Payment History

Front 37

Which of the following actions would improve your credit score?

Back 37

Paying off your credit card bill`

Front 38

Which action is LEAST important to maintaining a healthy credit score?

Back 38

Know your exact credit score

Front 39

How many free credit reports are you legally entitled to each year?

Back 39

One credit report from each credit bureau

Front 40

Having a low credit score can make it more difficult to:

Back 40

Obtain a car loan, open a new credit card, and secure an apartment lease

Front 41

The return on investment (ROI) from education is typically the highest for:

Back 41

Someone with a 4-year (Bachelor's) degree

Front 42

Your sister is starting 9th grade next year and is thinking about going to college. What step would you recommend she take first?

Back 42

Look for school clubs & organizations she's interested in

Front 43

Which of the following loans will typically offer the lowest interest rate?

Back 43

Federal Student Loan

Front 44

When referring to student loans, what is a grace period?

Back 44

The period after graduating or leaving school before you must begin paying back student loans

Front 45

Which loan type requires you to make loan payments while you're attending school?

Back 45

None of the above

Front 46

Which of the following statements about federal student loans is TRUE?

Back 46

The interest rate on your loan will be fixed over time

Front 47

Using the FAFSA form, you can apply for:

Back 47

Federal student loans and the federal work-study program

Front 48

The Federal Application for Student Aid (FAFSA) form:

Back 48

Can be submitted on online or by mail

Front 49

After you send in your FAFSA form, what will you receive back?

Back 49

Your Student Aid Report

Front 50

You are looking for ways to pay for your higher education costs. Which of the following options will require you to pay back any money you receive?

Back 50

Federal student loans

Front 51

Renting provides _________ flexibility but can lead to _________ costs in the long-term.

Back 51

Greater; higher

Front 52

Which of the following statements about renting & owning is CORRECT?

Back 52

An owner has complete responsibility and control over the property

Front 53

A _________ is generally considered an appreciating asset because it will _________ in value over time.

Back 53

House; increase

Front 54

One reason to buy a home instead of rent a home is:

Back 54

Homes have the potential to appreciate in value over time

Front 55

John would like to move from the suburbs into the city, but the rent in the city is very high. John has found an apartment he really likes, but he can only afford about 60% of the monthly rent. What is the best housing option for John?

Back 55

Rent the apartment with a roommate

Front 56

What is a mortgage?

Back 56

A type of loan used to buy property

Front 57

All of the following components are commonly found in rental housing agreements EXCEPT:

Back 57

What type of renter's insurance the renter must buy

Front 58

Someone may choose to own a car instead of leasing because:

Back 58

The car can be resold later to make some money back

Front 59

Jim is in the market for a car, but he'll probably only need it for a couple of years. After that, he plans on moving into the city and using public transportation. He has a short commute to work, so he won't be putting many miles on his vehicle. What's the best transportation option for Jim?

Back 59

Lease the car

Front 60

Which of the following is NOT a cost typically associated with owning a car?

Back 60

Wear & Tear fees

Front 61

Insurance can help you:

Back 61

Financially protect against unexpected accidents

Front 62

Jan pays $70 each month for her auto insurance policy. This regular payment is called a:

Back 62

Premium

Front 63

In which of the following scenarios will you be entitled to pay the least amount of money out-of-pocket for a medical expense?

Back 63

You have health insurance with a $500 deductible

Front 64

Your auto insurance policy has a $200 monthly premium and $700 deductible. What is the maximum amount you will have to pay out-of-pocket for a car accident before your insurance covers your costs?

Back 64

$700

Front 65

You have an insurance policy with a $300 premium and a $500 deductible. How much should you expect to pay the insurance company each month for coverage?

Back 65

$300

Front 66

Which of the following typically have the highest auto insurance premiums?

Back 66

Young, inexperienced drivers

Front 67

When you purchase an item in a store, you may be charged __________.

Back 67

Sales tax

Front 68

Which of the following statements about taxes is FALSE?

Back 68

Taxes at the local, state and federal level are all equal

Front 69

Which of the following are NOT deducted on a typical paystub:

Back 69

Sales tax

Front 70

When starting a new job, the form you complete to determine how much tax to withhold from your paycheck is called the _______.

Back 70

W-4

Front 71

Which of the following is the BEST way to protect against identity theft?

Back 71

Change online account passwords frequently

Front 72

Identity thieves can use your personal information to:

Back 72

Open a credit card, Sign up for electricity service, and Get a cell phone contract

Front 73

What is the safest way to dispose of old bank account statements?

Back 73

Shred them in a paper shredder

Front 74

The safest action to take if someone claiming to be from your bank calls you to ask for account information is to:

Back 74

Hang up and call back using the bank's official phone number

Front 75

The best way to investigate fraudulent transactions on your credit card is to:

Back 75

Review your recent credit card statements

Front 76

Which document puts you at the LEAST risk of identity theft?

Back 76

Cash receipts

Front 77

It is generally safe to provide your Social Security Number to:

Back 77

Verified trusted sources that need it

Front 78

Which action will be least helpful if you've been the victim of identity theft?

Back 78

Withdraw your money from all accounts

Front 79

What is the FIRST action you should take if you suspect there has been a fraudulent charge on your credit card?

Back 79

Contact the credit card company to report the fraudulent charge

Front 80

Consumer protection laws are meant to:

Back 80

Prevent unfair or deceptive business practices

Front 81

How can investors receive compounding returns?

Back 81

By investing their earnings back into their original investment

Front 82

When you buy a ____ , you are loaning money to an organization.

Back 82

Bond

Front 83

Which best describes the difference between stocks and bonds?

Back 83

Stocks allow investors to own a portion of the company; bonds are loans to the company

Front 84

What is the primary reason to issue stock?

Back 84

To raise money to grow the company

Front 85

When it comes to investing, what is the typical relationship between risk and return?

Back 85

The greater the potential risk, the greater the potential return

Front 86

Which of the following correctly orders the investments from LOWER risk to HIGHER risk?

Back 86

Treasury bond − Diversified mutual fund - Stock

Front 87

If an investment is considered "volatile", it means...

Back 87

The value of the investment may be hard to predict

Front 88

Diversification is important in investing because...

Back 88

It helps you to balance your risk across different types of investments

Front 89

Which of the following would be considered the highest risk portfolio?

Back 89

A portfolio made up of 60% stocks, 30% mutual funds, and 10% Treasury bonds

Front 90

Which of the following is generally true about 401(k) and 403(b) retirement plans?

Back 90

They are plans offered through employers, they offer some tax benefits, and they restrict when you can withdraw your money