Exam (elaborations)
WISE FINANCIAL LITERACY CERTIFICATION PRACTICE QUESTIONS AND ANSWERS
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WISE FINANCIAL LITERACY CERTIFICATION PRACTICE QUESTIONS AND ANSWERS
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Name: Score:48 Multiple choice questions
Term 1 of 48
Question : Which of the following statements is usually true about individuals who are
financially literate?
They have high debt and low savings
They understand the basics of personal finance and money management
They almost always choose stocks and bonds that increase in value
They achieve all of their financial goals
Term 2 of 48
Question :Patty is selling her car through a newspaper advertisement. When she finds a buyer,
she wants a form of payment which is guaranteed to be good. Which form of payment should
she avoid?
Cash
Certified check
Cashiers check
A check
Term 3 of 48
Interest earned on interest is known as:
Simple interest
True interest
Compounded interest
Variable interest
,Term 4 of 48
Question :
A consumer is having a dispute regarding an unfulfilled building contract. It is decided that the
case will go to mediation, which means that
a neutral third party will hear both sides and then try to resolve the conflict.
the judge and jury will decide who is right in court.
each party involved must agree ahead of time to accept the outcome of the case.
the dispute will be handled in small claims court.
Term 5 of 48
Question : Who benefits the most from inflation?
Long-term fixed rate borrowers
Lenders
Persons on fixed incomes
The government
Term 6 of 48
A type of electronic funds transfer (EFT) is:
A transaction made with a check
A deposit made with a bank teller
Not widely used by consumers
An ATM transaction
,Term 7 of 48
Which statement best describes the relationship between a person's educational level and that
person's potential earning power?
Education has no effect on a person's potential earning
power
A person with a professional degree is likely to earn at least
four times as much per year as a person who did not
complete high school
Attaining a higher educational level affects the earning
potential only for people over 40 years old
Attaining a higher educational level decreases potential
earning power
Term 8 of 48
Question : The annual percentage rate (APR) is:
The true cost of credit that must be disclosed on a loan agreement
Always expressed in dollars
Required by the Securities Exchange Commission
Required by the Comptroller of the Currency
Term 9 of 48
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?
Will I find a balance between financial rewards and personal satisfaction from work?
How many people do I know who work in this field?
Once I train for this area, how long before I will be
at the top of the field?
Are there people in this field who are dissatisfied
with their jobs?
, Term 10 of 48
Question : Before the Kiss Corporation can issue stocks or bonds, it must register the issue
with:
Its Board of Directors
The Federal Reserve
The World Bank
The Securities and Exchange Commission (SEC)
Term 11 of 48
Question :A person is convinced that a lending institution is charging too much interest for a
loan. This person should be aware that
there are state usury laws.
lending institutions all have their rates of interest set by the
SEC.
interest rates depend entirely on the borrower's ability to pay
back the loan.
the Federal Trade Commission has laws against intimidating borrowers.
Term 12 of 48
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?
To reduce the premium on the homeowner's insurance.
To protect the person who owns the television from
liability for damages.
To show the insurance company a good faith investment
has been made.
To cover the cost of replacement should the television
get damaged or stolen.
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