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WISE FINANCIAL LITERACY TEST REVIEW QUESTIONS AND ANSWERS
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WISE FINANCIAL LITERACY TEST REVIEW QUESTIONS AND ANSWERS
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Name: Score:21 Multiple choice questions
Term 1 of 21
Sally took out a $50,000 life insurance policy. The $50,000 amount of coverage is called the
premium or annuity value
death benefit or face value
separate value
a secure, low risk investment
Term 2 of 21
savings account
exempt from state and local taxes
purchased from the government then sold back later for higher amount
allow deposits and withdrawals within limits, limit access to funds by check, help users
earn interest on money kept in the account
short-term savings instruments
Term 3 of 21
One of the benefits of holding an investment for over a year rather than selling it in less than a
year is that the
the investment will have higher liquidity
the investment will have lower volatility
dividends from the investment will increase
capital gains on the investment will be taxed at a lower rate
,Term 4 of 21
Certificate of Deposit (CD)
holds money for a set amount of time, earns higher rate of interest than savings accounts
a type of insurance policy that covers loss of personal belongings
a loan taken out to buy a car
a document proving ownership of a company's stock
Term 5 of 21
Which financial product typically pays the highest rate of interest?
money market account
certificate of deposit
compound interest
savings account
Term 6 of 21
If a person makes a deposit of $10,000 or more into a bank account, the bank must notify the
US Treasury Department
Federal Reserve Board
Death Benefit Or Face Value
Federal Reserve System
, Term 7 of 21
money market account
holds money for a set amount of time, earns higher rate of interest than savings accounts
requires a high minimum balance, earns higher rate of interest than savings accounts,
allows a limited number of checks to be written from it
allow deposits and withdrawals within limits, limit access to funds by check, help users
earn interest on money kept in the account
transfer money to others by use of checks or electronic payments, access money
directly by use of debit card, make deposits to and withdrawals from the account
Term 8 of 21
checking account
holds money for a set amount of time, earns higher rate of interest than savings accounts
allow deposits and withdrawals within limits, limit access to funds by check, help users
earn interest on money kept in the account
requires a high minimum balance, earns higher rate of interest than savings accounts,
allows a limited number of checks to be written from it
transfer money to others by use of checks or electronic payments, access money
directly by use of debit card, make deposits to and withdrawals from the account
Term 9 of 21
When a person brings an item to a pawnshop to obtain cash, the transaction is considered
a custodial payment
an unsecured loan
a collateralized loan
a secure, low risk investment
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