Quiz: Personal Finance Quiz Questions! Test

24 Questions | Total Attempts: 304

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Quiz: Personal Finance Quiz Questions! Test - Quiz

What do you know about personal finance? Would you like to put your knowledge to the test? Personal finance is a term that covers budgeting your money as well as savings and investing. It involves banking, insurance, mortgages, investment, retirement preparation, and tax and estate organizing. The term often refers to the all-inclusive industry that provides financial services. Try this quiz and see how much you know about personal finance.


Questions and Answers
  • 1. 
    Which statement is true of most millionaires?
    • A. 

      Most millionaires are celebrities or professional athletes.

    • B. 

      Most millionaires work over 40 hours per week.

    • C. 

      Most millionaires inherit their fortune or win the lottery.

    • D. 

      Most millionaires drive new Cadillacs instead of used Fords.

  • 2. 
    College graduates earn about 65 percent more than high school graduates earn. 
    • A. 

      True

    • B. 

      False

  • 3. 
    Because of scarcity:
    • A. 

      We can only get free lunches on Tuesdays.

    • B. 

      Only parents can get free lunches.

    • C. 

      Lunches go on sale occasionally.

    • D. 

      There is no such thing as a free lunch.

  • 4. 
    What is opportunity cost?
    • A. 

      The next best alternative that isn’t chosen.

    • B. 

      The price of a natural resource.

    • C. 

      Goods used to produce other goods and services.

    • D. 

      Funding for human capital.

  • 5. 
    Which approach to handling your money will improve your financial well-being most over a lifetime?
    • A. 

      Making impulse purchases.

    • B. 

      Dropping out of school to work and make money.

    • C. 

      Saving money early in life, and making responsible financial decisions with the money you don’t save.

    • D. 

      Using credit to buy things you can’t afford to pay for.

  • 6. 
    According to the U.S. Bureau of Labor Statistics, the fastest-growing jobs will require an associate’s degree or higher. 
    • A. 

      True

    • B. 

      False

  • 7. 
    What is net pay?
    • A. 

      Net pay is savings plus deductions.

    • B. 

      Net pay is gross pay minus deductions.

    • C. 

      Net pay is gross pay minus savings.

    • D. 

      Net pay is savings plus expenses.

  • 8. 
    Jane Smith earns $10 per hour and works 25 hours per week.  Her deductions per week, including federal income taxes, state income taxes, and Social Security taxes total $50.  What is Jane’s net pay for the week?
    • A. 

      $350

    • B. 

      $310

    • C. 

      $225

    • D. 

      $200

  • 9. 
    Which of the following items is not a mandatory deduction from your paycheck?
    • A. 

      Federal income tax

    • B. 

      State income tax

    • C. 

      FICA

    • D. 

      Charity

  • 10. 
    Why do financial experts recommend that you start saving when you’re young?
    • A. 

      Saving early allows compound interest to work to your advantage, because your interest earns more interest.

    • B. 

      People who save early earn higher interest rates on credit cards.

    • C. 

      Saving is easy when you’re young.

    • D. 

      It’s harder to save when you’re older, because you make less money.

  • 11. 
    Which of the following factors does not affect how much your savings can grow?
    • A. 

      Time

    • B. 

      Weather

    • C. 

      Rate of Return

    • D. 

      Investment Size

  • 12. 
    Which of the following statements best defines risk?
    • A. 

      Risk is the rule of determining how long it takes money to double at a particular rate of return.

    • B. 

      Risk is shares of ownership in a corporation.

    • C. 

      Risk is a reward that influences choices.

    • D. 

      Risk is the chance that you might not get your money back.

  • 13. 
    The higher the investment risk, the higher the potential reward. 
    • A. 

      True

    • B. 

      False

  • 14. 
    When considering a credit card, what is the interest rate?
    • A. 

      The amount you earn when you use your credit card.

    • B. 

      A deduction from your monthly credit card payment.

    • C. 

      The compensation the lender expects to receive for extending credit to you.

    • D. 

      The spending limit set by the lender.

  • 15. 
    How does risk influence the interest charged on a loan?
    • A. 

      Low risk loans usually carry high interest rates.

    • B. 

      Risk doesn’t influence the interest rate.

    • C. 

      High risk loans usually carry high interest rates.

    • D. 

      High risk loans usually carry low interest rates.

  • 16. 
    Why should you be selective when choosing a credit card?
    • A. 

      You shouldn’t; it’s not important.

    • B. 

      Because you could find a better annual percentage rate (APR) and pay less annual fees.

    • C. 

      Because you want an APR of 40 to 50%.

    • D. 

      Because you want a short grace period.

  • 17. 
    Collateral is an asset used to back a loan. 
    • A. 

      True

    • B. 

      False

  • 18. 
    Usually, only borrowers benefit in a credit transaction. 
    • A. 

      True

    • B. 

      False

  • 19. 
    What does it mean to “pay yourself first?”
    • A. 

      It means you pay variable expenses before you pay fixed expenses.

    • B. 

      It means you pay all of your bills before you put money into savings.

    • C. 

      It means you use a credit card to treat yourself before you pay your bills.

    • D. 

      It means you set aside money for savings before you spend money.

  • 20. 
    Some credit cards offer a low APR for the first few months and then increase the APR significantly. 
    • A. 

      True

    • B. 

      False

  • 21. 
    When evaluating your creditworthiness, potential lenders consider your character, collateral, and capacity. 
    • A. 

      True

    • B. 

      False

  • 22. 
    Gross pay is money left for spending or saving after deductions are taken out of your paycheck. 
    • A. 

      True

    • B. 

      False

  • 23. 
    What does it mean to have a positive net worth?
    • A. 

      It means your liabilities are greater than your assets.

    • B. 

      It means your savings are less than your bills.

    • C. 

      It means your assets are greater than your liabilities.

    • D. 

      It means your assets are less than you liabilities.

  • 24. 
    Using a debit card to make a purchase is most similar to using a personal check because money is withdrawn directly from your checking account. 
    • A. 

      True

    • B. 

      False

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