1 - Commack Schools



NEW YORK STATE FBLAPERSONAL FINANCE2013PLEASE DO NOT OPEN THIS TEST UNTIL DIRECTED TO DO SOTest DirectionsComplete the information requested on the answer sheet.PRINT YOUR NAME on the “Name” line.PRINT the name of the event, PERSONAL FINANCE on the “Subject” line.PRINT the name of your CHAPTER on the “DATE” line.All answers will be recorded on the answer sheet.Please do not write on the test booklet.Scrap paper will be provided.Read each question completely before answering. With a NO. 2 pencil, blacken in your choices completely on the answer sheet. Do not make any other marks on the answer sheet, or the scoring machine will reject it.You will be given 60 minutes for the test. You will be given a starting signal and a signal after 50 minutes have elapsed.Tie will be broken using the last 10 questions of the test.1. The person who writes a check is called thea. payeec. depositorb. makerd. demander2. The due date for filing personal income taxes every year isa. December 31c. January 31b. April 15d. June 303. If Emily is paid $8.90 per hour and gets time and a half for overtime, what is her overtime rate?a. $4.45c. $13.35b. $12.35d. $17.804. Expenses that increase or decrease from month to month are calleda. fixed expensesc. prepaid expensesb. unearned expensesd. variable expenses5. A form an employer must provide employees each year for income tax purposes is called aa. W-2c. W-4b. W-3d. Form 9416. The first step in financial planning is a. to open a checking accountc. to get a jobb. to prepare a budgetd. to save7. A “good” score on a credit report is arounda. 500c. 600b. 400d. 700 8. Which of the following is a fixed expense?a. grocery billc. car loanb. entertainmentd. doctor bill9. A scam set up to look like an interest-earning investment, where there actually is no investment, and new deposits are cycled to older clients to look like returns is called a(n)a. mutual fundc. Ponzi schemeb. opportunity costd. no-fault law10. The most liquid type of account one can have due to the variety of ways to access cash is aa. checking accountc. certificate of depositb. savings accountd. money market account11. The tax system used in the United States, one that means the more income one makes, the greater the percentage of taxes one pays, is called a(n)a. aggressive tax systemc. progressive tax systemb. obsessive tax systemd. regressive tax system12. A company that tracks down delinquent debt in exchange for a commission is called aa. debt agencyc. credit unionb. lending institutiond. collection agency13. Which of the following would be considered the highest risk investment?a. commoditiesc. mutual fundsb. preferred stocksd. bonds14. A check is written to Sonya Perry. On the back of the check, Sonya writes, “For Deposit Only,”then signs her name. What kind of endorsement is this?a. special endorsementc. blank endorsementb. full endorsementd. restrictive endorsement15. I = PRT isa. the formula for simple interestc. the formula for compound interestb. the formula for an insurance rated. the formula for an interest rate16. In the formula in #15, the T representsa. Time in yearsc. Totalb. Target valued. Time value of money17. Hours Worked × Rate =a. Overtime Payc. Net Payb. Gross Payd. Incentive Pay18. All of the following information are found on a W-2 excepta. employee’s social security numberc. employee’s addressb. employer’s federal ID numberd. employee’s phone number19. Which of the following transactions would likely be difficult to make without a credit card?a. purchasing a homec. reserving tickets for a Broadway showb. purchasing a card. buying groceries20. Scholarships, work-study, grants, and student loans are examples ofa. free moneyc. Winnings from essay writing contestsb. financial dependencyd. financial aid21. Student loans that do NOT accrue interest until you finish school, provide a ten year repayment period, and provide a 9 month grace period after graduation are calleda. subsidized student loansc. unsubsidized student loansb. Perkins loansd. Stafford loans22. An interest-bearing checking account that pays a higher rate of interest than a usual account, but typically has more restrictions, is called aa. special accountc. money market accountb. share accountd. standard account 23. The date at which a bond can be redeemed is called thea. due datec. end dateb. maturity dated. call date24. The person legally charged to take care of minor children in the event something happens to the parents is called aa. beneficiaryc. legal guardianb. god-parentd. foster parent25. A plastic card directly linked to a checking account and used to make purchases is aa. debt cardc. credit cardb. rewards cardd. debit card26. A monthly report sent to an account holder by the bank, showing a transaction history and bank balances for the month is called aa. bank reconciliation reportc. bank statementb. bank history reportd. financial statement27. When the stock market is trending upward or gaining value over a period of time, it is referred to as aa. bull marketc. stagnant marketb. bear marketd. super market28. Maria is at the doctor’s office and must pay $15 when she checks in. This is referred to as aa. pre-payc. pre-depositb. down-paymentd. co-pay29. A person who opens a personal checking account is known as thea. depositorc. makerb. payeed. debtor30. Credit cards fall into the credit category ofa. installment loans c. cash advancesb. revolving creditd. closed-end credit31. APR stands fora. Actual Percentage Ratec. Annual Production Rateb. Actual Production Rated. Annual Percentage Rate32. A credit card with an APR of 18% and using the Previous Balance Method to calculate interest, would use which interest rate to calculate a month’s interest?a. 1.5%c. 18%b. 1%d. 12%33. The unpaid portion of a loan is called a. ratec. collateralb. equityd. principal34. A bounced check is a common term used when checks are written and there is(are)a. sufficient fundsc. insufficient fundsb. uncertified checksd. certified checks35. The widest variety of banking services is provided at aa. savings bankc. credit unionb. commercial bankd. savings and loan association36. Copies of Form W-2 must be provided to employees by their employer for the previous tax year no later thana. April 15c. January 31b. December 31d. January 137. The best way for a student to begin establishing good credit is to a. open a savings accountc. apply for a credit cardb. open a checking accountd. open a store credit account38. The form you must fill out when being hired for a job that determines the amount of withholdings your employer will take from your gross pay is the a. W-4c. W-2b. W-3d. I-939. The FICA rate for 2013 has changed due to congress’ failure to discuss it while delaying or avoiding the Fiscal Cliff. The new rate, which is actually a return to a previous amount, prior to two years ago, isa. 4.2%b. 1.45%c. 2.9%d. 6.2%40. The amount of money one takes home each pay check is also known asa. total incomec. taxable incomeb. gross incomed. disposable income41. The federal minimum wage is currentlya. $8.00 per hourc. $7.50 per hourb. $7.25 per hourd. $8.25 per hour42. Nellie Olsen is paid $9 per hour on a 40 hour work week. She is paid time and a half for all hours worked over 40 in any given week. Find Nellie’s gross pay for a week in which she worked 52 hours.a. $522c. $468b. $414d. $70243. A professional who can suggest a comprehensive, individualized action plan to help you reach your financial goals is called aa. business teacherc. loan specialistb. financial advisord. collection agent44. Assets – liabilities =a. net worthc. net payb. net liquidityd. net debt45. An investment grade bonda. offers the highest possible yieldb. has no rating at allc. is considered the highest quality, lowest risk bond d. is highly speculative46. Which of the following is not considered an asset?a. housec. lap topb. card. college tuition47. Insurance that provides coverage for as long as the policyholder continues to pay the premium and build up savings over time is calleda. universal life insurancec. term life insuranceb. whole life insuranced. limited life insurance48. If for some reason one’s employment ends, the law or Act that allows you to continue your health insurance coverage for up to 18 months after your employment ends is thea. HIPPAc. COBRAb. OSHAd. ECOA49. Usually the least expensive way for a person to obtain health insurance is by a. enrolling in an employer-provided healthcare planb. purchasing insurance through a private companyc. using the services of the local hospital emergency roomd. enrolling in Medicare50. A major consumer credit law that allows you three days to change your mind about certain credit transactions that use your home as collateral is thea. Equal Credit Opportunity Actc. Fair Credit Reporting Actb. Fair Credit Billing Actd. Truth in Lending Act51. Which of the following is not a main credit bureau for rating your credit score?a. Equifaxc. Western Unionb. TransUniond. Experian52. When someone uses your personal information without your permission for personal gain; it is most commonly known asa. Identity theftc. Stealingb. Fraudd. Perjury53. The ability to quickly convert assets to cash is known asa. convertibilityc. liquidityb. stabilityd. diversity54. The only non-profit status banking/lending institutions area. commercial banksc. savings and loan associationsb. savings banksd. credit unions55. Certificates that represent pieces of ownership in a company are calleda. bondsc. certificates of depositb. stocksd. commodities56. In order to finance large public projects, states and local governments may issuea. municipal bondsc. corporate bondsb. junk bondsd. federal agency bonds57. Which of the following is not a true statement about a bond?a. In most cases, a bondholder will receive interest on a bond until the bond’s maturity dateb. A bond can be issued by a nonprofit organization as well as a corporation.c. A bond is always a safer investment than a stockd. A person can also make money on a bond by selling it before maturity if the price is higher than its purchase price.58. The right, not the obligation, to buy or sell a commodity or stock for a specified price within a specified time period is called a(n)a. annuityc. optionb. futured. discount bond59. A typical down-payment for a house is about ______ percent of the purchase price.a. 10 to 20c. 25 to 35b. 5 to 10d. 40 to 50 60. A financial plan does not includea. managing riskc. investingb. bankruptcyd. retirement planning61. A 21 year old college graduate starting her first full-time job want to buy a home by age 30. Which of the following is the best plan to reach this goal?a. She should apply for a mortgage now while she is young and rates are lowb. She should start saving and investing now in order to have a down payment needed to buy a housec. She should start buying things for her house while she is living with her parents and has limited expensesd. She should buy the house as soon as she finds the one she likes.62. A person has a house worth $100,000, a mortgage of $90,000, savings of $5,000, a car valued at $10,000, a $7,000 car loan, and $3,000 in credit card debt. This person’s net worth isa. $115,000c. $15,000b. $100,000d. $ 5,00063. The application of the old saying “Don’t put all your eggs in one basket,” is calleda. diversificationc. verificationb. litigationd. personification64. The process of determining how your wealth will be allocated on or before your death is calleda. financial planningc. retirement planningb. estate planningd. risk management65. If one dies without a will, the court will appoint an administrator who will distribute the estate according to the laws of the state. The fact of dying without a will is known as beinga. intestatec. beneficiary-lessb. illegald. heir-less66. A fund that can be established to transfer assets in a manner that avoids taxes when preparing the estate plan and is placed in custody of a third party is called aa. mutual fundc. trust fundb. transfer fundd. will fund67. Which of the following is a defined contribution plan for employees of schools, nonprofit organizations, and government unit?a. Keogh planc. 401(k) planb. SEP-IRAd. 403(b) plan68. When you have sufficient income and assets to pay your debts, you are said to bea. liquidatedc. indigentb. solventd. secure69. Social Security retirement benefits are a. non-taxable in all statesb. paid to everyone, regardless if they have ever worked or notc. insufficient to allow most seniors to retire comfortablyd. based on your taxable income during the last year you worked70. A financial tool that provides people with revolving open-end access to funds that they can draw from repeatedly up to some preset limit is known as aa. credit cardc. mortgageb. certificate of depositd. checking account71. A technique involving simply copying your credit card or debit card numbers from your cards is an identity thief’s tactic calleda. phishingc. pharmingb. skimmingd. shoulder surfing72. The following are ways to protect against identity theft except a. being cautious about giving out credit card information over the phoneb. keeping a list of all credit cards and bank accountsc. shopping online only on secure sitesd. throwing away un-shredded mail with personal information in the trash collected by waste mgt. services73. Getting the latest I-phone is an example of aa. a needc. a wantb. an expense d. a liability74. Buying a better vehicle next year is an example ofa. a middle-term goalc. a short-term goalb. a long-term goald. greed75. A high school student starts a lawn mowing business. His riding lawn mower cost $1,000; gas for the season $2,000. He spends $500 for gas driving to and from jobs, $300 for supplies and repairs, and $200 for a trimmer. Each of his 20 customers pays $40 a week for a 20-week season. What is the outcome of this business venture?a. He makes a $12,000 profitb. He makes a $4,000 profitc. He has an $8,000 total cash inflowd. He has a $4,000 total cash inflow76. Credit reports are issued bya. credit bureausc. credit unionsb. your employerd. banks and savings & loans77. Checking accounts protected by the FDIC are protected from loss for up toa. $10,000.c. $25,000b. $100,000d. $250,00078. The main differences between a PPO and an HMO health provider network is thata. PPO’s generally have a larger network of providers and typically cost more than an HMOb. HMO’s cost more than PPO’sc. HMO’s are based on negotiated agreements with specific doctors and PPO’s are not.d. PPO’s require individuals to choose a primary care physician and HMO’s do not.79. How do economists measure inflation?a. They survey consumers and ask if they are able to buy the same number of goods today as they were a year agob. They compare the cost of today’s imports from China and the Middle East to goods made in USAc. They survey employers to determine how much they are paying in salaries and for raw materials todayd. They compare costs of a standard group of goods and services bought today to how much those goods cost a year ago80. If a person earned $50,000 last year and again earns $50,000 this year, but the rate of inflation is 4%, this year’s buying power when compared to last year’s a. is $48,000c. is $52,000b. is $50,000d. cannot be determined from given information81. Getting information from a person online by asking her to complete a survey or provide certain information to win a free vacation or product is calleda. skimmingc. pre-textingb. phishingd. pharming82. Which of the following is not a type of student loan?a. Federal Stafford loansc. Federal Perkins Loansb. Pell grants d. Salliemae83. When purchasing a home, one often has the choice of an adjustable rate or a fixed APR. Which of the following situations would make more sense to get an adjustable rate mortgage (ARM) versus a fixed rate mortgage?a. One wants to be sure they will never have to pay more than the current mortgage amountb. One believes that interest rates will be going up in the near futurec. One is planning to retire in this house in 30 years with the mortgage completely paidd. One expects to trade up to a larger house in 3 or 4 years as their career advances84. A credit card offer with 0% interest for one year and then just 7.99% over the prime rate is considered a(n)a. teaser ratec. illegal rateb. awesome rated. scam85. If a person owns a home valued at $350,000 and has an outstanding mortgage of $100,000, it is said that they have a lot of equity in the home becausea. they have a lot of debtb. they will be considered to be at risk of defaulting on their mortgagec. they own a large fraction of their homec. they will not be approved for additional loans until mortgage is paid in full86. All of the following are tips on using credit cards excepta. Use a credit card only if you can cover the billb. Impose a tight credit limit on yourselfc. Never use savings to pay off credit cardsd. Pay credit card bills first87. The phrase “pay yourself first,” refers to the idea ofa. do what you want to do with your money first, then worry about what you have to do with itb. If you want it now, buy it nowc. When making your budget, include an amount for savings that acts like a “fixed expense”, then budget variable expenses and wants, carefully.d. Treat yourself. You deserve it.88. How can you determine if you have reconciled your bank account?a. when you check off all the items on the bank statement that match your check registerb. when the bank balance and your check register balance are the samec. when you close your accountd. when you write the bank statement balance in your check register and use that balance.89. The group that protects your deposits in a financial institution is thea. Federal Reserve Systemb. Federal Bureau of Investigationc. Federal Trade Commissiond. Federal Deposit Insurance Corporation90. A type of incentive pay based on the quality of work done or years of service on the job is called aa. bonusc. stock optionb. profit sharing pland. commissions91. Harold writes a check to the power company for $203.22. He should record this amount in his check register in thea. balance columnc. fee columnb. deposit/credit columnd. payment/debit column92. What type of risk is caused by the business cycle?a. industry riskc. market riskb. political riskd. interest-rate risk93. The price of stock divided by the earnings per share is known as thea. current ratioc. P/E ratiob. quick ratiod. dividend yield94. A legal document authorizing someone to act on your behalf is called aa. joint tenancy agreementc. inter vivosb. codicild. power of attorney95. a. Earnings per sharec. Interest Rateb. Return on Investmentd. Net Yield96. Going over your credit limit or being late on a payment will likely cause you to be charged a(n)a. service feec. transaction feeb. annual feed. penalty fee97. A check that has cleared the bank is called a(n)a. cancelled checkc. bounced checkb. certified checkd. outstanding check98. The Internal Revenue Service has the legal right to audit your tax return and supporting records for ____ years from the date of filing.a. 10c. 7b. 5d. 399. A request that a bank not honor a specific check is called a(n)a. overdraft orderc. stop-payment orderb. cancellation requestd. void request100. The need for credit arose in the United States with the dawn of the a. American Revolutionc. Great Depressionb. Information Aged. Industrial RevolutionANSWER KEY1.B26.C51.C76.A2.B27.A52.A77.D3.C28.D53.C78.A4.D29.A54. D79.D5.A30.B55.B80.A6.B31.D56.A81.B7.D32.A57.C 82.B8.C33.D58.C83.D9.C34. C59.A84.A10.A35. B60.B85.C11.C36.C 61.B86.C12.D37.B62.C87.C13.A38.A63.A88.B14.D39.D64.B89.D15.A40.D65.A90.A16.A41.B66.C91.D17.B42.A67.D92.C18.D43.B68.B93.C19.C44.A69.C94.D20.D45.C70.A95.B21.A46.D71.B96.D22.C47.B72.D97.D23.B48.C73.C98.A24.C49.A74.A99.C25.D50.D75.A100.D ................
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