WISE FINANCIAL LITERACY TEST NEWEST 2024 ACTUAL
EXAM COMPLETE 100 QUESTIONS AND CORRECT
ANSWERS (VERIFIED ANSWERS) |ALREADY GRADED A+
Earned income - ANSWER: Income derived from active participation in a trade or
business, including wages, salary, tips, commissions and bonuses.
unearned income - ANSWER: Any income that comes from investments and other
sources unrelated to employment services. Examples: interest from a savings
account, bond interest, alimony, and dividends from stock
liquidity - ANSWER: The ability to convert an asset to cash quickly and with minimal
impact to the price
liquidity examples - ANSWER: cash, most stocks, money market instruments and
government bonds
money market accounts - ANSWER: it is the organized exchange on which
participants can lend and borrow large sums of money for a period of one year or
less
bonds - ANSWER: it is the organized exchange on which participants can lend and
borrow large sums of money for a period of one year or less
Gift cards - ANSWER: A gift card is a restricted monetary equivalent is issued by
retailers or banks to be used as an alternative to a non-monetary gift.
Discretionary income and budget surplus - ANSWER: The amount of an individual's
income that is left for spending, investing or saving after taxes and personal
necessities (such as food, shelter, and clothing) have been paid. Discretionary
income includes money spent on luxury items, vacations and non-essential goods
and services.
money orders - ANSWER: A certificate that allows the stated payee to receive cash
on-demand, usually issued by governments and banking institutions. A money order
functions much like a check, in that the person who purchased the money order may
stop payment.
why does the US currency have value - ANSWER: Its value is only based on what we
can get in exchange for it. Or put it another way, money has value as long as other
people believe the money you give them can be
exchanged for the goods and services they desire in the
future.
, opportunity cost - ANSWER: the value of the best alternative that must be given up
when scarce resources are used for one purpose instead of another
inflation - ANSWER: a general increase in prices and a corresponding decrease in
money's purchasing power
Consumer Price Index (CPI) - ANSWER: a measure of the overall cost of the goods
and services bought by a typical consumer
Inflation - ANSWER: An increase in the overall price level.
Who gets hurt the most from inflation - ANSWER: Those with fixed incomes (retired
people)
who gets hurt the least from inflation - ANSWER: borrowers and producers
Treasury department - ANSWER: responsible for issuing all treasury bonds, notes,
and bills.
Pay yourself first - ANSWER: Put money into savings each month as if it were a bill.
At least 10% of your income should go into savings. It's
recommended you have 6-8 months of expenses saved.
Certificate of Deposit - ANSWER: Low risk (and low return) investments suitable for
cash you don't need for months or years. (safest type of investment)
traditional CD (certificate of deposit) - ANSWER: you receive a fixed interest rate
over a specific period of time. When that term ends, you can withdraw your money
or roll it into another CD.
Liquid CD (certificate of deposit) - ANSWER: this kind of account allows you to
withdraw part of your deposit without paying a penalty. The interest rate on this CD
usually is a little lower than others, but the rate is still higher than the rate in a
money market account.
Zero-coupon CD (certificate of deposit) - ANSWER: This kind of CD does not pay out
annual interest, and instead re-invests the payments so you earn interest on a higher
total deposit. The interest rate offered is slightly higher than other CDs, but you'll
owe taxes on the re-invested interest.
Pawnshops - ANSWER: A short term loan in exchange for leaving a personal item,
such as jewelry, or an electric device, as a collateral.
Payday lenders - ANSWER: Allows you to borrow against your future income.
Banks vs Credit unions - ANSWER: 1-Credit Unions are nonprofit institutions while
banks are profit oriented institutions.
EXAM COMPLETE 100 QUESTIONS AND CORRECT
ANSWERS (VERIFIED ANSWERS) |ALREADY GRADED A+
Earned income - ANSWER: Income derived from active participation in a trade or
business, including wages, salary, tips, commissions and bonuses.
unearned income - ANSWER: Any income that comes from investments and other
sources unrelated to employment services. Examples: interest from a savings
account, bond interest, alimony, and dividends from stock
liquidity - ANSWER: The ability to convert an asset to cash quickly and with minimal
impact to the price
liquidity examples - ANSWER: cash, most stocks, money market instruments and
government bonds
money market accounts - ANSWER: it is the organized exchange on which
participants can lend and borrow large sums of money for a period of one year or
less
bonds - ANSWER: it is the organized exchange on which participants can lend and
borrow large sums of money for a period of one year or less
Gift cards - ANSWER: A gift card is a restricted monetary equivalent is issued by
retailers or banks to be used as an alternative to a non-monetary gift.
Discretionary income and budget surplus - ANSWER: The amount of an individual's
income that is left for spending, investing or saving after taxes and personal
necessities (such as food, shelter, and clothing) have been paid. Discretionary
income includes money spent on luxury items, vacations and non-essential goods
and services.
money orders - ANSWER: A certificate that allows the stated payee to receive cash
on-demand, usually issued by governments and banking institutions. A money order
functions much like a check, in that the person who purchased the money order may
stop payment.
why does the US currency have value - ANSWER: Its value is only based on what we
can get in exchange for it. Or put it another way, money has value as long as other
people believe the money you give them can be
exchanged for the goods and services they desire in the
future.
, opportunity cost - ANSWER: the value of the best alternative that must be given up
when scarce resources are used for one purpose instead of another
inflation - ANSWER: a general increase in prices and a corresponding decrease in
money's purchasing power
Consumer Price Index (CPI) - ANSWER: a measure of the overall cost of the goods
and services bought by a typical consumer
Inflation - ANSWER: An increase in the overall price level.
Who gets hurt the most from inflation - ANSWER: Those with fixed incomes (retired
people)
who gets hurt the least from inflation - ANSWER: borrowers and producers
Treasury department - ANSWER: responsible for issuing all treasury bonds, notes,
and bills.
Pay yourself first - ANSWER: Put money into savings each month as if it were a bill.
At least 10% of your income should go into savings. It's
recommended you have 6-8 months of expenses saved.
Certificate of Deposit - ANSWER: Low risk (and low return) investments suitable for
cash you don't need for months or years. (safest type of investment)
traditional CD (certificate of deposit) - ANSWER: you receive a fixed interest rate
over a specific period of time. When that term ends, you can withdraw your money
or roll it into another CD.
Liquid CD (certificate of deposit) - ANSWER: this kind of account allows you to
withdraw part of your deposit without paying a penalty. The interest rate on this CD
usually is a little lower than others, but the rate is still higher than the rate in a
money market account.
Zero-coupon CD (certificate of deposit) - ANSWER: This kind of CD does not pay out
annual interest, and instead re-invests the payments so you earn interest on a higher
total deposit. The interest rate offered is slightly higher than other CDs, but you'll
owe taxes on the re-invested interest.
Pawnshops - ANSWER: A short term loan in exchange for leaving a personal item,
such as jewelry, or an electric device, as a collateral.
Payday lenders - ANSWER: Allows you to borrow against your future income.
Banks vs Credit unions - ANSWER: 1-Credit Unions are nonprofit institutions while
banks are profit oriented institutions.
