Financial Literacy 9 Weeks Exam

A co-signer is a person who agrees to take responsibility for a loan in case the person borrowing the loan is unable to repay it. This means that if the borrower defaults on the loan, the co-signer becomes legally obligated to repay the loan on their behalf. The co-signer essentially acts as a guarantor for the loan, providing additional security for the lender.

A student loan is a loan that is used to assist in payment of the cost of a professional education. Unlike free money given to pay for college, a student loan is a financial obligation that must be paid back. It is not required to be paid back the day of graduation, but rather over a specified period of time after graduation.

Monitoring your credit score and any bank activity is one way to detect identity theft. By regularly checking your credit score and reviewing your bank statements, you can identify any unauthorized transactions or suspicious activity that may indicate someone is using your identity without your knowledge or consent. This proactive approach allows you to take immediate action and report any fraudulent activity to the appropriate authorities, helping to minimize the potential damage caused by identity theft.

A card that deducts money directly from a person's checking or savings account to make a purchase is called a debit card. Unlike a credit card, which allows users to borrow money up to a certain limit and pay it back later, a debit card uses the funds available in the linked bank account. This means that the amount spent is immediately deducted from the account balance, providing a convenient and efficient way to make purchases without incurring debt. A gift card, on the other hand, is a prepaid card with a specific amount of money that can be used for purchases at specific stores or businesses. A green card refers to a United States Permanent Resident Card, which is an identification document for foreign nationals authorized to live and work in the country.

Phishing is the act of sending fraudulent emails that appear to be from a reputable source in order to deceive individuals into providing sensitive information such as passwords, credit card numbers, or social security numbers. These emails often contain fake links that direct victims to malicious websites designed to steal their personal information. Therefore, the correct answer is phishing.

The correct answer is an accurate definition of credit because it states that credit is a legal agreement to receive cash, goods, or services now and pay for them in the future. This definition aligns with the common understanding of credit as a form of borrowing or purchasing on credit, where the individual or entity receives immediate benefit but is obligated to repay the amount at a later date. The other options provided do not accurately define credit.

An installment loan is a type of loan where the borrower agrees to make regular payments of a fixed amount over a specific period of time. This type of loan is commonly used for purchases like cars or homes, where the borrower knows the exact amount they need to pay each month and the total number of payments required. This differs from other types of loans where the payment amounts or schedule may vary.

The money you receive from the IRS after filing your income tax is referred to as a federal tax return. This is the amount of money that the government owes you, typically due to overpayment of taxes throughout the year. It is not cash money or related to a bank. Federal student loans are a separate entity and not directly associated with income tax refunds.

Identity theft refers to the act of someone using another person's personal information, such as their name, Social Security number, or financial details, without their consent to commit fraudulent activities. This can include opening accounts, filing taxes, or making purchases under the victim's name. It is a serious crime that can result in financial loss and damage to the victim's reputation.

The correct answer is "Both A & B are correct." This is because both statements A and B accurately describe what a credit score is. A credit score is indeed a number that helps a lender predict how likely an individual is to repay a loan or make credit payments on time. Additionally, a credit score does change as the elements in a credit report change. Therefore, both statements A and B provide a comprehensive explanation of what a credit score is.

A credit card is a card issued by a bank or store that allows the holder to make purchases on credit. This means that the cardholder can buy goods or services without immediately paying for them, with the understanding that they will be billed later and will need to make payments to the bank or store. This is different from a debit card, which deducts money directly from a person's checking or savings account, and from a gift card, which has a set amount of money for purchases. It is also different from a credit score, which is a number that determines an individual's creditworthiness.

Calling someone from an anonymous phone number is not an example of identity theft because it does not involve stealing or using someone else's personal information for fraudulent purposes. Identity theft typically involves the unauthorized use of someone's personal information, such as credit card details, social security number, or account number, to commit fraud or gain financial benefits. However, making anonymous phone calls may be considered harassment or a privacy invasion, but it is not directly related to identity theft.

A benefit of a debit card is that the money comes directly from your checking or savings account, meaning you don't have to borrow money or owe anyone any money. This can be advantageous as it allows for easy and convenient access to your funds without incurring any debt.

The given correct answer is "This is the answer" because it directly matches the statement "This is the answer" mentioned in the options.

Using your credit card for all purchases is not a way to improve your credit score. While it is important to use your credit card responsibly and make timely payments, using it for all purchases may result in high balances and a higher credit utilization ratio, which can negatively impact your credit score. It is advisable to use only what you need, pay off high balances, and avoid applying for too many credit cards to improve your credit score.

The form that your employer sends you in January to summarize your earnings for the year is called a W2. This form is used for tax purposes and provides information about your wages, tips, and other compensation, as well as the taxes withheld from your paycheck. It is important to review your W2 form carefully and ensure that the information is accurate before filing your tax return.

A creditor is the person or bank to whom the debt is owed. This means that the creditor is the individual or financial institution that has lent money or extended credit to another party, and is now entitled to receive repayment of the debt. The creditor has provided funds or resources to the debtor, who is responsible for repaying the borrowed amount, along with any agreed-upon interest or fees.

The three D's in this context refer to strategies for cybersecurity. Deter means to discourage or prevent cyberattacks by implementing security measures. Detect involves identifying any potential threats or breaches in the system. Defend refers to taking action to protect and safeguard against cyberattacks. These three D's work together to create a comprehensive approach to cybersecurity, ensuring that potential threats are minimized and the system remains secure.

When you are hired, your employer asks you to complete a W4 form. This form is used to determine how much federal income tax should be withheld from your paycheck. It includes information such as your filing status, number of dependents, and any additional withholdings you may want to claim. By completing the W4 form, you are providing your employer with the necessary information to ensure accurate tax withholding throughout the year.

Revolving credit is a type of credit that does not have a fixed payment number, like a credit card. This means that the borrower has the flexibility to make variable payments each month, depending on their financial situation. Unlike a car loan or a student loan, where there is a predetermined number of payments and amount, revolving credit allows the borrower to make minimum payments or pay off the balance in full. Therefore, the correct answer is that revolving credit is a type of credit that does not have a fixed payment number, like a credit card.