| 1. Maria has just applied for a credit card. She is an 18 year old high school graduate with few valuable possessions and no credit history. If Maria is granted a credit card, which of the following is the most likely way that the credit card company will reduce ITS risk? |
| 8.0% |
a) |
it will charge Maria twice the finance charge rate it charges older cardholders |
| 18.8% |
b) |
it will require Maria to have both parents co-sign for the card |
| 6.3% |
c) |
it will make Maria 's parents pledge their home to repay Maria's credit card debt |
| 66.9% |
d) |
it will start Maria out with a small line of credit to see how she handles the account |
| 2. Ron and Molly are the same age. At age 25 Molly began saving $2,000 a year while Ron saved nothing. At age 50, Ron realized that he needed money for retirement and started saving $4,000 per year while Molly kept saving her $2,000. Now they are both 75 years old. Who has the most money in his or her retirement account? |
| 23.4% |
a) |
they would each have the same amount because they put away exactly the same |
| 7.0% |
b) |
Ron, because he saved more each year |
| 9.8% |
c) |
Molly, because she has put away more money |
| 59.8% |
d) |
Molly, because her money has grown for a longer time at compound interest |
| 3. If your credit card is stolen and the thief runs up a total of $1,000, but you notify the issuer of the card as soon as you discover it is missing, how much will you be responsible to pay? |
| 69.3% |
a) |
none |
| 7.7% |
b) |
$50 |
| 16.9% |
c) |
$1000 |
| 6.1% |
d) |
$500 |
| 4. If you had a savings account at a bank, which of the following would be correct concerning the interest that you would earn on this account? |
| 49.9% |
a) |
earnings from savings account interest may not be taxed |
| 16.1% |
b) |
sales tax may be charged on the interest that you earn |
| 26.6% |
c) |
income tax may be charged on the interest if your income is high enough |
| 17.4% |
d) |
you cannot earn interest until you pass your 18th birthday |
| 5. Which of the following credit card users is likely to pay the GREATEST dollar amount in finance charges per year if they all charge the same amount per year on their cards? |
| 15.2% |
a) |
Ellen who always pays off her credit card bill in full shortly after she receives it |
| 10.6% |
b) |
Barbara, who generally pays off her credit card in full but occasionally will pay the minimum when she is short of cash |
| 12.3% |
c) |
Paul, who pays at least the minimum amount each month and more when he has the money |
| 61.8% |
d) |
Nancy who only pays the minimum amount each month |
| 6. Matthew and Alicia just had a baby. They received money as baby gifts and want to put it away for the baby's education. Which of the following is likely to have the highest growth over the next 18 years? |
| 37.5% |
a) |
a savings account |
| 3.6% |
b) |
a checking account |
| 40.2% |
c) |
a U.S. Govt. savings bond |
| 18.7% |
d) |
stocks |
| 7. Ed and Bob are young men. Each has a good credit history. They work at the same company and make approximately the same salary. Ed has borrowed $2,500 to buy a car. Bob has borrowed $2,500 to take a foreign vacation. Who is likely to pay the lowest finance charge? |
| 19.1% |
a) |
they will both pay the same because they have almost identical financial backgrounds |
| 13.9% |
b) |
Bob will pay less because people who travel overseas are better risks |
| 45.5% |
c) |
Ed will pay less because the car is collateral for the loan |
| 21.6% |
d) |
they will both pay the same because the rate is set by law |
| 8. Retirement income paid by a company is called: |
| 33.3% |
a) |
Social Security |
| 3.8% |
b) |
rents & profits |
| 27.7% |
c) |
401k |
| 35.1% |
d) |
pension |
| 9. Which of the following statements best describes your right to check your credit history for accuracy: |
| 7.0% |
a) |
you cannot see your credit record |
| 40.9% |
b) |
your credit record can be checked at any time for free |
| 39.8% |
c) |
if you are turned down for credit based on a credit report, the record can be checked for free |
| 12.3% |
d) |
all credit records are the property of the U.S. Government and access is only available to the FBI and Lenders |
| 10. Which of the following types of investment would best protect the purchasing power of a family's savings in the event of a sudden increase in inflation? |
| 17.8% |
a) |
a twenty five year corporate bond |
| 19.4% |
b) |
a certificate of deposit at a bank |
| 33.9% |
c) |
a U.S. Government Savings Bond |
| 28.9% |
d) |
a house financed with a fixed rate mortgage |
| 11. If you have caused an accident, which type of automobile insurance would cover damage to your own car? |
| 3.1% |
a) |
term |
| 10.5% |
b) |
comprehensive |
| 51.3% |
c) |
collision |
| 35.0% |
d) |
liability |
| 12. Many young people receive health insurance benefits through their parents. Which of the following statements is true about health insurance coverage? |
| 49.1% |
a) |
if your parents become unemployed, your insurance coverage may stop, regardless of your age |
| 32.6% |
b) |
you continue to be covered by your parents' insurance as long as you live at home, regardless of your age |
| 3.3% |
c) |
young people don't need health insurance because they are so healthy |
| 15.0% |
d) |
you are covered by your parents' insurance until you marry, regardless of your age |
