Ch Mountain America Credit Union Quiz
- 1.If you have just started working, the first thing you should do is
- A.
Start a Savings account
- B.
Shop for office clothes
- C.
Set aside money for your dream vacation
- D.
Build up an emergency Fund account
- 2.I have to set aside an amount of monthly savings equal to
- A.
10%-15% of your monthly income
- B.
20%-30% of your yearly income
- C.
The balance after paying off your bills
- D.
A percentage based on how many departments you have
- 3.Taking up a financial plan and being committed is
- A.
A burden to my finances.
- B.
Not really important.
- C.
A necessity to my family and I.
- D.
Compulsory because the government says so
- 4.Matt and Eric are young men. Each has a good credit history. They work at the same company and make approximately the same salary. Matt has borrowed $6,000 to take a foreign vacation. Eric has borrowed $6,000 to buy a car. Who is likely to pay the lowest finance charge?
- A.
Matt will pay less because people who travel overseas are less of a risk
- B.
They will both pay the same because they have almost identical financial background
- C.
Eric will pay less because the car is collateral for the loan
- D.
They will both pay the same beacuase the rate is set by the law
- 5.If you went to college and earned a 4-year degree, how much more could you expect to earn than if you only had a high school diploma?
- A.
A little more; about 20% more.
- B.
A lot more; about 70% more.
- C.
About ten times as much.
- D.
No more, you make the same either way.
- 6.Credit Unions typically offer lower rates.
- A.
True
- B.
False
- 7.The best way to manage credit card debt is
- A.
To consistently pay part of the amount owed every month
- B.
To not pay every month but pay lump sum using my bonus at the end of the year
- C.
To pay the full amount owed for that month
- D.
To take up a personal bank loan to pay the credit card debt in full
- 8.Suppose you have $100 in a savings account earning 2% interest a year. After five years, how much would you have?
- A.
More than $102
- B.
Exactly $102
- C.
Less than $102
- D.
Option 4
- 9.The interest rate on your savings account is 1% a year and inflation is 2% a year. After one year, would the money in the account buy more than it does today, exactly the same or less than today?
- A.
More
- B.
Same
- C.
Less
- D.
Option 4
- 10.Justin just found a job with a take-home pay of $2,000 per month. He must pay $800 for rent and $200 for groceries each month. He also spends $200 per month on transportation. If he budgets $100 each month for clothing, $150 for restaurants, and $250 for everything else, how long will it take him to accumulate savings of $900?
- A.
1 month
- B.
2 months
- C.
3 months
- D.
4 months
- 11.A 15-year mortgage typically requires higher monthly payments than a 30-year mortgage but the total interest over the life of the loan will be less.
- A.
True
- B.
False
- 12.Buying a single company's stock usually provides a safer return than a stock mutual fund.
- A.
True
- B.
False
- 13.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?
- A.
Vera, who always pays off her credit card bill in full shortly after she receives it.
- B.
Jessica, who only pays the minimum amount each month.
- C.
Megan, who pays at least the minimum amount each month, and more if she has the money
- D.
Erin, who generally pays off her credit card in full but, occasionally, will pay the minimum when she is short of cash.
- 14.Which of the following statements is true?
- A.
Your bad loan payment record with one bank will not be considered if you apply to another bank for a loan.
- B.
If you missed a payment more than 2 years ago, it cannot be considered in a loan decision.
- C.
Banks and other lenders share credit history of their borrowers with each other and are likely to know of any loan payments that you have missed.
- D.
People have so many loans it is very unlikely that one bank will know your history with another bank.
- 15.Which of the following types of investments would best protect the purchasing power of a family's savings in the event of a sudden increase in inflation?
- A.
A 25-year corporate bond
- B.
A house financed with a fixed-rate mortgage
- C.
A 10-year bond issued by a corporation
- D.
A certificate of deposit at a bank
- 16.Under which of the following circumstances would it be financially beneficial for you to borrow money to buy something now and repay it with future income?
- A.
When some clothes you like go on sale.
- B.
When the interest on the loan is greater than the interest you get on your savings.
- C.
When you want to go on a week vacation.
- D.
When you need to buy a car to get a much better paying job.
- 17.Lindsay has saved $12,000 for her collegee expenses by working part-time. Her plan is to start college next year, and she needs all of the money she saved. Which of the following is the safest place for her college money?
- A.
Corporate bonds
- B.
A bank savings acccount
- C.
Locked in her closet
- D.
Stocks
- 18.Doug must borrow $12,000 to complete his college education. Which of the following would NOT be likely to reduce the finance charge rate?
- A.
If his parents took out an additional mortgage on their house for the loan.
- B.
If the loan was insured by the Federal Government.
- C.
If he went to a state college rather than a private college.
- D.
If his parents cosigned the loan.
- 19.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?
- A.
Sales tax may be charged on the interest that you earn.
- B.
You cannot earn interest until you pass your 18th birthday.
- C.
Earnings from savings account interest may not be taxed.
- D.
Income tax may be charged on the interest if your income is high enough.
- 20.Which of the following is true about sales taxes?
- A.
You don't have to pay the tax if your income is very low.
- B.
It makes things more expensive for you to buy.
- C.
The national sales tax percentage rate is 6%.
- D.
The federal government will deduct it from your paycheck.
- 21.Which of the following statements best describes your right to check your credit history for accuracy?
- A.
All credit records are the property of the U.S. Government and access is only available to the FBI and Lenders.
- B.
You can only check your record for free if you are turned down for credit based on a credit report.
- C.
Your credit record can be checked once a year for free.
- D.
You cannot see your credit record.
- 22.Your take home pay from your job is less than the total amount you earn. Which of the following best describes what is taken out of your total pay?
- A.
Federal income tax, social security, and Medicare contributions
- B.
Federal income tax, sales tax, and social security contributions
- C.
Social security and Medicare contributions
- D.
Federal income tax, property tax, and Medicare / social security contributions
- 23.Many people put aside money to take care of unexpected expenses. If John and Jenny have money put aside for emergencies, in which of the following forms would it be of LEAST benefit to them if they needed it right away?
- A.
Stocks
- B.
Savings account
- C.
Invested in a down payment on the house
- D.
Checking account
- 24.Which of the following statemetns is NOT correct about most ATM cards?
- A.
You can get cash anywhere in the world with no fee.
- B.
You must have a bank account to have an ATM Card.
- C.
You can generally get cash 24 hours a day.
- D.
You can generally obtain information concerning your bank balance at an ATM machine.
- 25.Maria worked her way through college earning $20,000 per year. After graduation, her first job pays $40,000. The total dollar amount Maria will have to pay in Federal Income taxes in her new job will:
- A.
Stay the same as when she was in college.
- B.
Be lower than when she was in college.
- C.
Double, at least, from when she was in college.
- D.
Go up a little from when she was in college.
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