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- 1. Multiple Choice
Which of the following is the first step in creating a budget?
Implement the budget
Create personalized expense categories
Make adjustments
Track income and expenses
- 2. Multiple Choice
How long does Chapter 7 bankruptcy stay on your credit report?
2 years
7 years
10 years
FOREVER!
- 3. Multiple Choice
Which of the following would be considered a liability?
Roth IRA
Automobile
Savings account
Mortgage
- 4. Multiple Choice
What is an employee required to complete when they begin a new job?
Form W-2
Form W-4
Social Security Form
All of the above
- 5. Multiple Choice
Which of the following is an example of a control method?
Use a spreadsheet
Use a digital app
The Envelope System
All of the above
- 6. Multiple Choice
Once a budget is established, adjustments to the budget are unnecessary.
True
False
- 7. Multiple Choice
What action corresponds to the advice “pay yourself first”?
Wait until the end of the month to determine how much to save
Directly deposit a portion of your paycheck into your savings account at the beginning of the month
Make multiple payments to your savings account each month
Spend your regular paycheck and save your bonus check
- 8. Multiple Choice
If a budget is NOT working, a possible alternative might be to
Slash all budget items in half
Increase spending and decrease savings
Forget about budgeting and spend all available money
Find additional sources of income or change the budget
- 9. Multiple Choice
What is net worth?
Income minus liabilities
Income minus expenses
Assets minus expenses
Assets minus liabilities
- 10. Multiple Choice
A financial goal will contain the following elements:
Time bound, measurable, life cycle
Specific, measurable, attainable, realistic, time bound
Realistic, needs, wants, values
Attainable, realistic, time bound, specific
- 11. Multiple Choice
Which of the following is a key feature of the debt snowball method?
Ranking your debts from largest to smallest debt balance so you can pay off the largest one first.
Ranking your debts from smallest to largest debt balance so you can pay off the smallest balance one first.
Making the minimum payment on all debts and then putting the rest of your money into investments.
Making the minimum payment on all debts and then distributing the remainder between all of the debts.
- 12. Multiple Choice
Which of the following does NOT contribute to your credit score?
Your payment history
Your debt-to-credit ratio
Which banks issued your credit card
Length of credit history
- 13. Multiple Choice
Which is most likely to represent a fixed rate, secured debt?
A dealer financed auto loan
A payday loan
A credit card
A peer-to-peer loan
- 14. Multiple Choice
I forget to pay my credit card bill one month. How long will that payment information show up on my credit report?
One year
Seven years
10 years
Never!
- 15. Multiple Choice
What are the two most important factors in calculating your credit score?
Payment history and type of account
Payment history and amounts owed
Amounts owed and length of credit history
Length of credit history and new credit inquiries
- 16. Multiple Choice
Which of these payment terms is the STANDARD student loan repayment plan?
5 years
10 years
15 years
20 years
- 17. Multiple Choice
Why does the amount of INTEREST you owe on a loan decrease over time?
The institution trusts you more, so they lower the interest
With each payment, principal increases; so interest lowers
Banks are legally required to lower interest rates over time
With each payment, principal decreases, so interest lowers
- 18. Multiple Choice
How do you avoid paying interest on a credit card (revolving debt)?
Always make the minimum payment
Always make the full payment on time
Pay interest first, then pay what you can on leftover balance
Pay principal first, then pay what you can on the interest
- 19. Multiple Choice
Which is TRUE about the sticker price and net price of college?
Net price is the published cost of going to a school
Net price is the sticker price minus scholarships & grants
Sticker Price is the published cost of going to a school
Sticker price is the net price minus scholarships & grants
- 20. Multiple Choice
In what order should you accept different types financial aid?
Work-study, scholarships, federal loans, private loans
Scholarships, work-study, federal loans, private loans
Private loans, scholarships, work-study, federal loans
Scholarships, work-study, private loans, federal loans
- 21. Multiple Choice
Which of the following types of mortgages requires a 20% down payment (and not pay PMI insurance)?
VA loan
FHA loan
Interest Only loan
Conventional loan
- 22. Multiple Choice
A security deposit is defined as:
The cost of using someone else’s property
The fee charged for performing management tasks
An advance payment for costs beyond normal housing wear and tear
The purchase price of a housing unit
- 23. Multiple Choice
A disadvantage of buying a new car is it loses value faster than a used car. This is called
Capital gain
Depreciation
Inflation
Amortization
- 24. Multiple Choice
The components that affect the amount of the mortgage payment include:
Interest rate, amount borrowed, length of loan
Federal reserve guarantee, stability of the lending institution
Income, gender, and age of the person applying for the mortgage
Collateral available
- 25. Multiple Choice
According to Michigan law, a security deposit cannot exceed how many month’s rent?
1.5
3.0
2.5
6.0
- 26. Multiple Choice
When a tenant moves out and allows someone else to move in and take over the rent payments, it is called:
Renting
Securing the lease
Subleasing
Amortization
- 27. Multiple Choice
Which of the following is NOT a mandatory payroll deduction?
Federal tax
Social Security
401(k)
All of the above
- 28. Multiple Choice
What is a risk of co-signing a loan for a family or friend?
You are likely to get a higher APR
You become the primary borrower on the loan
You have a shorter loan term
You may be held responsible for the debt
- 29. Multiple Choice
Which of the following is TRUE about a credit report?
It is a complete history of one type of credit you have
You can get a copy of your credit report for free
Credit reports are maintained by the 5 main credit bureaus
You can get a credit report only when you're 21 years old
- 30. Multiple Choice
True or False: A person may view his/her credit report once a year for free.
True
False
- 31. Multiple Choice
Which is an example of a monetary asset?
Stocks
A diamond ring
Money in a savings account
A 401(k)
- 32. Multiple Choice
Robyn has a credit card with a balance of $687.52. Her credit limit is $10,000.00. What is her current credit utilization?
6.9%
93.1%
14.5%
17.4%
- 33. Multiple Choice
How do employers figure out how much federal income tax to withhold from your paycheck?
It is set by federal regulation at 7.65%
It is based on information that you have provided on the W-4 form
Your employer reviews the federal tax tables and calculates your income tax withheld based on your salary
You can send an email to your employer letting them know how much you want withheld from your paycheck and they are required by law to comply
- 34. Multiple Choice
Which of the following is likely to INCREASE your monthly payment on a car loan?
Increasing the size of your down payment
Decreasing the number of months in your term
Qualifying for a lower APR
Applying the trade-in value of your old car toward your new car purchase
- 35. Multiple Choice
Which is NOT one of the three major credit bureaus?
Equifax
Transunion
Vanguard
Experian
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