Financial Literacy 9 Weeks Exam
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A student loan is...
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A loan you use to assist in payment of the cost of a professional education.
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Free money given to you to pay for college.
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A loan that you use to assist in payment of the cost of professional education but you never pay it back.
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A loan that must be paid back the DAY you graduate from college.
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This 'Financial Literacy 9 Weeks Exam' assesses understanding of key financial concepts including credit management, credit scores, and the differences between credit and debit cards. It's designed to enhance financial decision-making skills, crucial for personal financial health.
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- 2.
A Co-Signer is...
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The person who agrees to take responsibility for a loan in case the person borrowing can't pay it back. They have the borrowers back.
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The person who borrows the loan
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The person who loans the money.
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The person who earns the money.
Correct Answer
A. The person who agrees to take responsibility for a loan in case the person borrowing can't pay it back. They have the borrowers back.Explanation
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.Rate this question:
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- 3.
What is one way to DETECT identity theft?
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Shred documents
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Monitor your credit score and any bank activity
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File a police report
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Do not provide your social security number.
Correct Answer
A. Monitor your credit score and any bank activityExplanation
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.Rate this question:
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- 4.
Which of the following is an accurate definition of CREDIT.
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A legal agreement to borrow money and then MAYBE pay it back later.
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A legal agreement to receive cash, goods, or services now and pay for them in the future. A legal agreement to receive cash, goods or services now and pay for them in the future.
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A plastic card that has money.
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A legal agreement to receive cash, and never have to pay it back. Ever.
Correct Answer
A. A legal agreement to receive cash, goods, or services now and pay for them in the future. A legal agreement to receive cash, goods or services now and pay for them in the future.Explanation
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.Rate this question:
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- 5.
A card deducts money directly from a persons checking or savings account to make a purchase is called a...
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Credit Card
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Gift Card
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Green Card
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Debit Card
Correct Answer
A. Debit CardExplanation
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.Rate this question:
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- 6.
Which of the following is true?
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An installment loan is a loan in which the amount of payment and the number of payment are predetermined, like a car loan.
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An installment loan is what you get when you install something and need money for it.
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An installment loan is a loan that does not have predetermined payments or amounts. You just pay it all off at once.
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An installment loan is a loan that does not need to be repaid because you just pay it off with your credit card.
Correct Answer
A. An installment loan is a loan in which the amount of payment and the number of payment are predetermined, like a car loan.Explanation
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.Rate this question:
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- 7.
Identity theft is....
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When someone uses your personal information to open accounts, file taxes, or make purchases.
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When someone steals your wallet.
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When someone steals your cell phone.
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When someone steals your purse.
Correct Answer
A. When someone uses your personal information to open accounts, file taxes, or make purchases.Explanation
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.Rate this question:
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- 8.
Sending emails that have fake links to gather a victims information is called...
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Phishing
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Fishing
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Nemo
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Faking
Correct Answer
A. PhishingExplanation
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.Rate this question:
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- 9.
The money you get back from the IRS after filing your income tax is called...
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Cash Money
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Federal Tax Return
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Bank
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Federal Student Loans
Correct Answer
A. Federal Tax ReturnExplanation
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.Rate this question:
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- 10.
What is a credit score?
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A credit score is a number that helps a lender predict how likely an individual is to repay a loan, or make credit payments on time. A credit score is a number that helps a lender predict how likely an individual is to payback a loan or make a credit payment on time.
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A credit score is a number that changes as the elements in a credit report change.
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Your birthday X your age X the year X a million / 76
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Both A & B are correct.
Correct Answer
A. Both A & B are correct.Explanation
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.Rate this question:
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- 11.
A credit card is...
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A card deducts money directly from a persons checking or savings account to make a purchase.
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A card issued by a bank or store allowing the holder to buy goods or services on credit.
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A number that determines an individuals credit worthiness.
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A card that you buy for a store that has a set amount of money.
Correct Answer
A. A card issued by a bank or store allowing the holder to buy goods or services on credit.Explanation
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.Rate this question:
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- 12.
One benefit of a debit card is...
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The money comes directly from your checking or savings account so you wont owe anyone any money.
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The money isn't YOUR money so it doesn't feel that bad to spend it.
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There are never any fees with Debit Cards.
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You can pay it back whenever you have the money.
Correct Answer
A. The money comes directly from your checking or savings account so you wont owe anyone any money.Explanation
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.Rate this question:
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- 13.
Which of the following is NOT an example of identity theft?
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Stealing someones credit card and using it to make purchases
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Using someone else's social security number to rent an apartment
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Stealing someone's account number to gain access to their money.
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Calling someone from an anonymous phone number.
Correct Answer
A. Calling someone from an anonymous phone number.Explanation
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.Rate this question:
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- 14.
Which of the following is NOT a way to improve your credit score?
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Pay any high balances.
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Use only what you need to use.
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Use your credit card for ALL purchases.
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Don't apply for too many credit cards.
Correct Answer
A. Use your credit card for ALL purchases.Explanation
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.Rate this question:
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- 15.
In January your employer sends you a form that summarizes your earnings for the year. What is this form called?
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W2
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W4
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1099
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0
Correct Answer
A. W2Explanation
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.Rate this question:
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- 16.
Choose one. You're welcome.
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This is probably not the answer.
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This could've been the answer, but isn't.
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This is the answer.
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This just isn't the answer.
Correct Answer
A. This is the answer.Explanation
The given correct answer is "This is the answer" because it directly matches the statement "This is the answer" mentioned in the options.Rate this question:
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- 17.
A creditor is...
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Someone who is unable to pay a debt.
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The person or bank to whom the debt is owed
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The person who owes money.
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The person or bank that borrows the money.
Correct Answer
A. The person or bank to whom the debt is owedExplanation
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.Rate this question:
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- 18.
What are the three D's?
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Deter, Detect, Determine
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Deter, Detect, Defend
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Dylan, Diego, Damien
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Deter, Determine, Describe
Correct Answer
A. Deter, Detect, DefendExplanation
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.Rate this question:
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- 19.
Which of the following is correct?
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Revolving credit is the type of credit that has a predetermined number of payments and amount, like a car loan.
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Revolving credit is the amount of credit you get when you apply for a student loan.
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Revolving credit is a type of credit that does NOT have a fixed payment number, like a credit card.
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Revolving credit is. It just is.
Correct Answer
A. Revolving credit is a type of credit that does NOT have a fixed payment number, like a credit card.Explanation
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.Rate this question:
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- 20.
When you are HIRED, your employer asks you to complete which of the following forms?
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W2
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1099
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W4
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1040
Correct Answer
A. W4Explanation
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.Rate this question:
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Current Version
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Sep 06, 2023Quiz Edited by
ProProfs Editorial Team -
Sep 23, 2015Quiz Created by
Mrodri616
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