The Road to Financial Freedom Pretest

  1. Developed by: Isles, Inc.

Ready! Set Go!

Question 1: A “budget” is:
A saving plan
A borrowing plan
A saving and spending plan
A list

Question 2: Which of the following is NOT a consideration in decision making?
List alternatives
Decide how much you really want it
Evaluate alternatives
Define the problem

Question 3: Overspending on food one month and having to use the gas allowance to pay the other bills is considered….
“Sticking to the budget”
The “School of Hard-Knocks”
Using the “Rain Day” fund
“Taking from Peter to Pay Paul”

Question 4: What is a consumer?
A person who sticks to a budget
All of the above
A person who buys goods and services to satisfy wants and needs
A person who works for a business

Question 5: Which of the following is considered a need?
A place to sleep
Business clothes
A new car
A steak dinner

Question 6: What is the first step in the financial planning process?
Find out what others would do
Make a decision and take action
Set goals
Create a plan

Question 7: A “value” is:
Something you desire to make your life more comfortable
A belief or idea you consider important or desirable
Something basic for you survival
A willingness to give up something now in exchange for future benefit

Question 8: Cody has $372.00 after combing his cash and checking account together. He does not have a saving account, and does not get paid for 2 more weeks. If he decides to spend $370.000 for a second stereo, what can he do this weekend?
Go on a date
Go to the movies
Hang out with his buddies
Stay home and do nothing
Eat his stereo

Question 9: Smart goals are:
Specific, movable, achievable, reliable, and too hard
Silly, mark-able, already done, random, and testy
Specific, measurable, achievable, realistic and time bound

Question 10: What is the purpose of Form W2?
To allow the employee to participate in the tax-deferred saving plan
To allow the employer to withhold federal income
To document a refund or figure a balance due to the IRS each year
To itemize how much money was earned by an employee and how much was withheld and sent to the IRS

Question 11: Many people put aside money to take care of unexpected expenses. If Sue and Joe have money put aside for emergencies, in which of the following forms would be of LEAST benefit to them if they needed it right away?
Invested in a down payment of the house
Checking account
Saving account
Stocks

Question 12: Ron and Molly are the same age. At age 25, Money began saving $2,000 a year while Ron saved nothing. At age 50, Ron realized that he needed money for retirement and started saving $4,000 per year while Molly kept saving her $2,000. Now they are both 75 years old. Who has the most in his or her retirement account?
Molly, because her money has grown for a longer time at compound interest
Ron, because he saved more each year
Molly, because she put away more money
They would each have the same amount because they put away exactly the same.

Question 13: Which of the following credit card users is likely to pay the GREATEST DOLLAR amount in finance charges per year if each charges the same amount per year on his or her cards?
Ellen, who always pays off her credit card bill in full shortly after she receives it
Nancy, who pays only the minimum amount each month
Barbara, who generally pays off her credit card in full, but occasionally will pay the minimum when she is short on cash.
Ron, who pays at least the minimum amount and more when he has the money

Question 14: Annual Percentage Rate (APR) is:
Payment you make for the use of another’s money
The amount you owe with an obligation to pay back
Total percentage it costs you yearly to use your credit
A record of a person’s payment activity

Question 15: Most of the time when items are bought on credit and paid for over a long period of time, the cost to the buyer:
Is more than if the items were bought with cash
Is less than if the items were bought with cash
Variable depending on the interest rate
Is the same as if the items were bought with cash

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