Wise Financial Literacy Practice Test 2025-2026 Guide, Exams of Finance

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Wise Financial Literacy Practice Test 2025 - 2026 Guide

Ifa person makes a deposit of $10,000 or more into a bank account, the bank must notify the - ANSWER-A: US Treasury Department. In order to track large deposits, the federal government requires thal. depasils of $10,000 or more be reported to the Treasury Department. Banks use savings account deposits to: - ANSWER-C: Give loans ta consumers and busine! The basic functions of banks and credit unions are to be an intermediary between savers and borrowers. Which fnancial product may pay a dividend? - ANSWER-D: Common stock. All of these types of accounts and financial product: cept for common stock earn interest. Margaret wants to store a valuable coin collection and important papers. Generally, consumers should: deposit boxes from the bank. B: Rent a safe deposit box for their valuables. Bank customers can rent safe What action should a person take who must make a tuition payment at the end of August each ‘FLA: Decide how much money will be needed and then place 1/12th of that year? - aiounl in a separate account cach month. The best way to save in order to make a yearly purchase, in this case a tuition payment, A bank Certificate of Deposit is a- ANSWER-B: Savings instrument that requires a deposit for a od of time during which there is a penalty for withdrawals. A certificate of deposit (CD) is a savings instrument that requires a deposit for a period of time (term) during which the saver camot withdraw money from the plan without a penalty. The phrase used for putting money into a savings account is - ANSWER-C: Making a deposit. Putting money into an account is "making a deposit” and taking money out is “making a withdrawal." Which financial product has the most predictable income? - ANSWER-C: Cert! . (CDs) arc iss for the entire term of the deposit. ate of deposit. rlificales of depas: ued with an interest. od al a specilicd rate Which financial product typically pays the highest rate of interest? - ANSWER-C: Certificate of deposil. All of these types of accounts and financial products earn inter pt for common stock. Financial services and products generally offered by banks and credit unions include: - -B: Savings and loans. The basic financial functions offered by banks and credit unions are checking accounts, savings accounts, and personal and business loans. The National Credit Union Administration (NCUA) insures accounts in: - ANSWER-A: Credit unions. The National Credit Union Association (NCUA) insures each depositor's accounts up ta $100,000 in one eredil union. Money orders are - ANSWER-C: A purchased cerlificate 1o pay a specilicd amounl. to a specific payee. A money order is a purchased certificate used to pay a specified amount to a specific payee. Which financial product can you buy for $23, is safe, and will be worth $50 at a fuuure date? - ANSWER-A: Series EE savings bond. Series EE savings bonds, which are issued and backed by the U.S. Treasury, are purchased for one-half of their face value. Ifa person makes a deposit of $10,000 or more into a bank account, the bank must notify the - ANSWER-A: US Treasury Department. In order to track large deposits, the fe It is usually a good idea to borrow for - ANSWER-Something that increases in value over time A person generally pays a lower interest rate on a car loan then on a personal loan because the - ANSWERCar is collateral for the loan Who is most likely to use the service of a non-Bank consumer finance company - ANSWER Individuals who cannot. gel a loan from a bank or eredil. union Which financial advisor is recommending a long-term investment that lowers investment risk - A Advisor C invest in mutual funds Why do investors by stop that pay dividends - ANSWEF-Investors receive payments from the company during the ycar A college student has a joint ercdit card with her mother. During the first semester, the student 00 for books, movies and clothes. The credit card bill for $1500 will have to charges a total of $ be paid by the - AN; repairing any debt a The rule of 72 helps a person determine the - AN; ‘Number of years it takes to double money al a given interest rate The cost of car insurance is aflecled by the Kind of car owned Why do financial advisors warn people against taking payday loans - ANSWER-These loans often results in a pattern of need to continue borrowing Ifa person believes that he is a victim of identity theft, he must - ANSWERFile a report with the police and get a copy of the report A stock is characterized as a “growth” stock because the expectation is for the corporation to - A public corporation announced today that it lost a major lawsuit. As a result, it is most likely that the - A} ‘-Price of the stock will decrease Which method is used to determine a persons net worth- ANSWER ts minus liabilit. equal net worth JoBlo, who is financially supporting his 10-ycar-ald danghter, is able Lo reduce the amount of Lax taken out of his salary by claiming his daughter as a - ANSWER Dependent Why does a person renting an apartment by renters insurance - ANSWER-To protect her personal property in case of fire or theft person generally spends $100 a month on groceries. If this years inflation rate is 5%, the A Lh ds $100 th If th flat. t %, tk person can expect to - ANSWER Spend more for the same amount of groceries A person should consider paying her monthly bills automatically from her checking account because it - ANSWER-Makes t easier to pay the bills on time each month A person has a car loan with a 10% interest rate. The loan would cost us more money if it is paid back in- ANSWER Three years A person has $2000 to save her invest. If the person is going to believe that the interest rate will go up next year, the person should - ANS As a result of putting a “stop payment” on a check, a person will - AN, ‘R-Have to pay a fee for the service so I need to A person budgeted $150 to pay your credit card bill. When the bill arrived, it was for $200. If When the conlimuc rising, Is described as a- ANSWER-Bull market sLock market has becn rising anniversarics arc confident, expecting stack prices 1a ‘\ person checks his credit report and realizes thal. there is a mistake on iL. for her to do- ANSWER Write a letter to the credit reporting agency to explain to him A line of credit on a personal credit card has been increased from $5000-$7500. What does this increase mean - AN, The purchasing power of money may decrease as a result of - ANSWER Insulation When using a debit, a person should - AN\ checkbook register hat is the best. thing A person has for credit cards as shown below, the amount of money the credit for it will show that the person owes is - ANSWER-S65,000 For the following questions use, see. Stanley's weekly earings statements picture below. How How much was the doctor this week for Crystal Stanley’s health insurance premium - ANS $20.00 This pay period how much was deducted for Medicare from Crystal Stanley's paycheck - low credit scores The bank for clothes on a persons home with me is that the homeowner - ANSWER-Fail to make mortgage loan payments and the bank took possession of the home gers need to be financially literate because they are - When using a debit card to buy something, where does the money come from - ANSWER-A checking account. Susan cosines for Dana’s $5000 personal loan. Dana pays $2000 of the loan, loses her job and refuses to pay the rest of the loan. Because it was a Kosan loan, who will have to pay the remaining $3000 - ANSWER Susan, since she cosigned for the loan The best way to ensure a higher credit score is too - A. ‘R-Make loan payments on time Ifa person has to pay $35 a year on each $100 barrel, the cost of interest is- ANSWERLow When purchasing stock, a person should be aware thal - ANS the price of the stock will go up Why would a person pul a stop payment on a check - A. the check that was lost or stolen The US treasury department is responsible for - Tinting money $120 monthly car insurance bill A person who pays the minimum balance due on a credit card bill will - ANSWER We charge interest on the unpaid balance J2To prevent anyone from Castle When a person subtract the total dollar amount she owes from the total dollar amount of what she owns, she will know her - ANSWERNet worth A person with a job had a baby. She’s able to increase her paycheck by - ANSWER-Adding the baby to the payroll exemptions A person receives a $200 gift card. It is important for the person to - ANSWER-Read the conditions on the card or packaging about inactivity fees ‘Fixed expenses When determining the dollar value of a job offer which benefit should not be included - Al ‘FLA private office What phrases use for putting money into a savings account - ANSWER Making a deposit edarisky investment - ANSWER Finding buyers for the coins so that a profit can be made is often difficult Why are collectibles, such as old coins, conside! /\ person has two credit cards as shown below. The amount of money the credit report will show Tt is important for a person to have a legal document known as a will to - ANSWER Designate who gets what. they own after they die A person received an email from his bank requesting his Social Security number. The first action bank statement. s health insurance as an appointment benefit. The insurance has a S15 - ANSWER-Porson will be A person rece: copayment. This means that each visit Lo a participating doctor the responsible for paying $15 regardless of the cost of the visit Person who pays the minimum balance due on a credit card bill will - ANSWER-Be chargeda fixed fee for having an unpaid balance A\ Lrue stalomont aboul. student. loans is that - ‘k-The government provides college loans to qualify students Before buying stocks investor investor should - ANSWER-Do research on the corporations performance and recent activities Which financial product is guaranteed to make money - ANSWER Certificate of deposit WER-The What information does a person need to know before renting an apartment - A. amount of the required security deposit Which investment has the greatest risk - ANSWER-Speculate of stocks A person’s net worth would increase if he - ANSWER Decreases the amount of money he owes to creditors tly deposited should know that - ANSWER-On payday, the money deposited will be available for use A person who has her paycheck dir Net pay is a different dollar amount and then gross pay due to the - ANSWER-Deductions for Taxes When buying car insurance, a person should know that generally the higher the deductible, the - During a period of inflation, people can definitely expect - -Their money to buy few were goods and services and expenses The cosi. of borrowing money is commonly reforred Lo as the - ANSWER-Interest ralo good idca for employers 1a contribute Lo 401(k) retirement plans because money invested should grow overtime and provide a person with income in retirement Which activity describes a person buying insurance - Spending $1000 a year on premiums to protect the homeowner against losses due to theft or fire Consumers are generally advice to use a bank rather than a check cashing store because cashing stores t. His as 40) years old. Both accounts and at the same rate of interest. Today, the cousins are 50 years ald. A 20-year-old man started depositing $1000 a year into savings account at 3% intere cousins started saving $2000 per year in a savings account in the same bank when sh Assuming neither one of them made any with drawls from their accounts, which account has the most money - ANSWER- Astock was purchased for $100 and sold for $50. The sale of the stock resulted in a capital - A deposit of $1000 into savings account paying 4% annual interest is estimated Lo double in 18 F-The rule of 72 years. This is an example of - A When are people entitled to the free copy of their own credit report from each of the three credit reporting agencies - ANS A person can use a debit card to - ANS in her bank account A woman writes a check for $75 to the telephone company. The bank returns to check due to insufficient funds in charge of the woman checking account a Lec. In addition, it is most likely that she will have to also- ANSWER-Play the telephone company a fee for the bad check A high school graduates thinking of pursuing a career and computer technology. What should be ‘The earning potential in this field The most likely reason a $10,000 bank loan application is not approved is because the person requesting the loan - ANSWER-Does not have sufficient income to repay the loan The truth in lending act requires credit card companies to - ANSWER-State the monthly charges and the annual percentage rate on the monthly credit card statement How can a person protect themselves from identity theft - ANSWER Avoid carrying his Social Security card A persons credit score is generally lowered when the person - ANSWE}-Has too many credit card accounts with Lee payments on high unpaid balances A homeowners mortgage payments are based on the amount borrowed, the length of time for the loan and the - AN, oF Which dollar amount shown on the statement will decrease after S. Jones makes the monthly payment - ANSWER