The Road to Financial Freedom Pretest

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15 Questions - Developed by: Isles, Inc. - Developed on: - 5.068 taken

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  • 1
    A “budget” is:
    A borrowing plan
    A saving and spending plan
    A list
    A saving plan
  • 2
    Which of the following is NOT a consideration in decision making?
    Define the problem
    Decide how much you really want it
    Evaluate alternatives
    List alternatives
  • 3
    Overspending on food one month and having to use the gas allowance to pay the other bills is considered….
    “Sticking to the budget”
    Using the “Rain Day” fund
    “Taking from Peter to Pay Paul”
    The “School of Hard-Knocks”
  • 4
    What is a consumer?
    All of the above
    A person who buys goods and services to satisfy wants and needs
    A person who sticks to a budget
    A person who works for a business
  • 5
    Which of the following is considered a need?
    A new car
    Business clothes
    A place to sleep
    A steak dinner
  • 6
    What is the first step in the financial planning process?
    Find out what others would do
    Set goals
    Create a plan
    Make a decision and take action
  • 7
    A “value” is:
    Something basic for you survival
    A belief or idea you consider important or desirable
    A willingness to give up something now in exchange for future benefit
    Something you desire to make your life more comfortable
  • 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?
    Stay home and do nothing
    Go to the movies
    Eat his stereo
    Go on a date
    Hang out with his buddies
  • 9
    Smart goals are:
    Specific, movable, achievable, reliable, and too hard
    Specific, measurable, achievable, realistic and time bound
    Silly, mark-able, already done, random, and testy
  • 10
    What is the purpose of Form W2?
    To allow the employer to withhold federal income
    To itemize how much money was earned by an employee and how much was withheld and sent to the IRS
    To document a refund or figure a balance due to the IRS each year
    To allow the employee to participate in the tax-deferred saving plan
  • 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?
    Checking account
    Invested in a down payment of the house
    Saving account
  • 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 she put away more money
    Molly, because her money has grown for a longer time at compound interest
    Ron, because he saved more each year
    They would each have the same amount because they put away exactly the same.
  • 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
    Ron, who pays at least the minimum amount and more when he has the money
    Barbara, who generally pays off her credit card in full, but occasionally will pay the minimum when she is short on cash.
  • 14
    Annual Percentage Rate (APR) is:
    A record of a person’s payment activity
    The amount you owe with an obligation to pay back
    Payment you make for the use of another’s money
    Total percentage it costs you yearly to use your credit
  • 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 the same as if the items were bought with cash
    Variable depending on the interest rate
    Is more than if the items were bought with cash
    Is less than if the items were bought with cash

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