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WISE FINANCIAL LITERACY CERTIFICATION TEST QUESTIONS AND ANSWERS
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WISE FINANCIAL LITERACY CERTIFICATION TEST QUESTIONS AND ANSWERS
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Name: Score:84 Multiple choice questions
Definition 1 of 84
short-term consumer loans, usually 24 to 48 hours, secured by a taxpayer's expected tax
refund, and designed to offer customers quicker access to funds.
How insurance works - concept of sharing risk
What are the advantages of using a credit union?
Institutions that give loans- Tax preparers
Tax anticipation loans
Definition 2 of 84
Sold by financial institutions, low-risk -- and relatively low-return — investments suitable for
cash you don't need for months or years. If you leave the money alone during the investment
period (known as the "term" or "duration"), the bank will pay you an interest rate slightly higher
than what you would have earned in a money market or checking account. All gains are
taxable as income.
Gift cards - how do they work - fees?
Credit reports
Retirement
CD
,Definition 3 of 84
*Amount of available credit you are using
*divide the aggregate outstanding balance of all your credit cards by the total credit limit
across all the cards
*One should try to keep that percentage to below 30%
Discretionary income and budget surplus
Liquid CD
Debt to credit ratio
Credit reports
Definition 4 of 84
*Giving unfair and abusive loan terms to borrowers
*Showing lower interest than actually paying, making it
seem they can afford more than they can, using collateral against default, high fees, etc.
What are the advantages of using a credit union?
Debt to credit ratio
Characteristics of predatory loans
Pay yourself first (savings)
,Definition 5 of 84
Identity theft, use of your credit
*In the event that your credit card is stolen in the United States, federal law limits the liability of
card holders to $50 regardless of the amount charged on the card by the unauthorized user.
In today's world of electronic fraud, if just the credit card account number itself is stolen,
federal law guarantees that the card holder has a zero liability to the issuer.
* As a card holder, you should notify the issuer immediately if you notice that your credit card
is missing or stolen. This early notification will give the issuer time to help you with the
following:
1. Verify if and where fraud has occurred.
2. Remove unauthorized charges from your credit.
3. Close down your account to prevent future
fraudulent charges.
4. Issue you a new card and account number.
Consequences of a lost or stolen credit card
Institutions that give loans- Pawnshops
Roles of SEC, Federal Reserve (the Fed), FDIC, CFPB worth
Health insurance - HMO insurance and co-pays
Definition 6 of 84
A tax that takes a larger percentage from the income of
high-income earners than it does from low-income
individuals. Taxpayers are broken down into categories
based on taxable income; the more one earns, the more taxes they will have to pay once they
cross the benchmark cut-off points between the different tax bracket levels.
Roles of SEC, Federal Reserve (the Fed), FDIC, CFPB worth
Taxes - graduated income taxes worth (VCEE Scope and
Sequence - Unit 14)
What is a bull market (remember U in bull - market goes UP vs. a bear market)
Collision coverage -when do consumers normally terminate this coverage
, Definition 7 of 84
Report detailing your use of credit
*Identifying information (name, address, etc.)
* Account information (date opened, balance, payment
history)
*Credit inquiries (companies who've checked your
credit)
*Important because it shows if you've been
seeking new credit
*Public record and collection information
* Such as: bankruptcies, liens, law suits, judgments
and collections
Zero-coupon CD
Debt to credit ratio
Treasury bills
Credit reports
Definition 8 of 84
*Collision Insurance will reimburse the insured for any
damage sustained to their personal automobile that is due to the fault of the insured driver.
*People typically drop this coverage when their car's value is low enough that the cost of the
insurance deductible and premiums aren't worth paying
Institutions that give loans- payday lenders
Who is hurt the most and least with inflation
Gift cards - how do they work - fees?
Collision coverage -when do consumers normally terminate this coverage
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