What Is Our Baseline Understanding Of Personal Finance? Jumpstart Survey

1. What Is Our Baseline Understanding Of Personal Finance? Jumpstart Survey

2. Let’s test to see if your remotes are working: • First turn your remote on by holding down the Menu key • It should find the net • Now select a C response by scrolling across with the arrows at the top (or by pressing the 3 button) • Then hit the double arrow key to record your response

3. For the past five years, Ralph has had a $20,000 whole life insurance policy that has a cash value clause. The person decides to surrender the policy. At the time of surrender, the person will receive: • One-fifth of the $20,000 face value • $20,000 less the premiums paid • A calculated amount of money which includes part of the premiums paid as well as the interest on that money • A calculated amount of money that must be converted to a term life insurance policy

4. John buys 100 shares of Apple at $100 and two years later sells the shares for $200 each, which of the following is true: • He will have a capital loss of $10,000 • He will have a capital gain of $10,000 • He will have a dividend of $10,000 • He will have ordinary income of $10,000

5. The stock market is performing well and its future is thought to be very positive and promising. This would be considered: • A bear market • A pig market • A lion market • A bull market

6. Stephanie just had a baby. Which of the following would true about her taxes: • She cannot claim the child as an exemption • She should change her W2 form to claim an additional exemption • The child will decrease her number of exemptions and reduce her taxes • The child will increase her number of exemptions and reduce her taxes

7. Sally's health insurance policy requires her to pay the first $500 of medical costs each year before the insurance company will pay any of her medical bills. This policy provision is the: • Co-insurance clause • Premium • Annual deductible • Major medical benefit

8. When Jessie needs health care, she must first go to her primary care physician who coordinates her care and decides whether Jessie should see a specialist. Jessie pays $10 as the co-pay when she sees her primary care doctor. Jessie has which type of health insurance? • Fee-for-service health plan • Managed care health plan • Medicaid health plan • Traditional health plan

9. The only type of life insurance that does not develop a cash value is: • Term life insurance • Whole life insurance • Universal life insurance • Variable universal life insurance

10. A person owns a stock that pays a $2.00 a share dividend. If the person chooses to reinvest that dividend, this means that the $2.00 will go toward buying: a) More of the same stock. b) Stocks that are similar to those already owned. c) Preferred stock in the corporation. d) Bonds in the corporation.

11. What is the largest equities market in the world? a) American Stock Exchange (AMEX) b) NASDAQ market c) New York Stock Exchange (NYSE) d) Over-the-counter (OTC) market

12. Mutual funds are: a) An investment portfolio managed by the investor b) An investment that holds a wide range of different investment instruments, providing diversification c) Usually less risky than investing in a money market d) Guaranteed to increase in value

13. Which of the following is NOT true about the Dow Jones Average? a) It is an average of 30 very large companies b) It is a reasonably good representation of how the market is doing c) If the index is 10,400, you can buy one share of each company for a total of $10,400 d) All of the above are true

14. Which of the following is true about growth stocks? • They pay higher than average dividends • Their prices are likely to be less volatile than most stocks • The have lower than average potential for capital gains • They have higher than average potential for price appreciation

15. Which of the following is true about Credit Reports? • They are a 3 digit number which indicates your creditworthiness and ability to pay your debts • You must always pay to receive a credit report • You are eligible to receive one free credit report per year from each of the three credit reporting companies • If you declare bankruptcy, it does not appear on your credit report

16. Which of the following is true about bonds? • The only way to make money on bonds is through interest payments. • Bonds pay interest as well as dividends. • The price of a bond remains the same throughout the term of the bond. • When interest rates in an economy increase, the price of bonds go down.

17. Which of the following is NOT true about credit unions? • They tend to charge higher interest rates on loans than traditional banks. • They tend to pay higher interest rates on CDs and other savings accounts than traditional banks. • They are owned by their members who are usually members of a union. • They are not-for-profit institutions.

18. All other things being equal, you would rather that the interest on your savings account be compounded: • Daily • Monthly • Quarterly • Annually

19. The Federal Reserve System (or Fed) is responsible for? • Regulating the money supply • Setting bank reserve requirements • Supplying paper currency • All of the above • Answer-D

20. The Federal Deposit Insurance Corporation (FDIC) insures commercial bank accounts for up to? • $100,000 • $200,000 • $250,000 • $150,000 • Answer-C

21. The Securities and Exchange Commission (SEC) was formed to? • Help people with their tax reporting • Prevent accounting fraud • Provide for the defense security of our country • Act as an agent for exchanging foreign currency • Answer-B

22. The Consumer Financial Protection Bureau (CFPB) is responsible for overseeing consumer transactions with? • Banks • Credit Unions • Payday lenders • All of the above • Answer-D

23. If you need to cash your certificate of deposit (CD) prior to its maturity date: • You lose the full value of your CD_ • You will not be charged a penalty if you pay it back within 30 days_ • You will lose interest and may be subject to a penalty fee_ • None of the above • Answer-C

24. Where can you go to get a loan? • Banks or Credit Unions • Finance Companies • Pawnshops or Payday lenders • All of the above • Answer-D

25. Which institutions charge the highest interest rates on loans? • Pawnshops • Payday lenders • Finance companies • tax preparers • Answer-B

26. The new credit card regulations allow consumers to opt in for overdraft protection. This means? • No penalties for going over your credit limit_ • You can never go over your credit limit • You can go over your credit limit • None of the above • Answer-C

27. The time value of money means? • The current worth of future sums of money_ • How many times you forget to save money_ • How many years till retirement_ • How long money can be used before it needs to be replaced • Answer-A_

28. Which type of investment offers more liquidity? • One year CD • One year treasury bill_ • Savings account_ • 5 year adjustable rate mortgage • Answer-C_

29. According to the rule of 72 how many years will it take for a $100 investment to double assuming a 9% interest rate? • 10 • 6 • 8 • 9

30. Why do you need to reconcile a checking account? • To prevent identity theft_ • You don’t need to reconcile a checking account • To match your check register to the bank statement_ • You like math • Answer-C

31. If you default on your student loan? • The federal and state government can withhold any income tax refunds due you_ • The government can garnish your wages_ • Your credit score will decline_ • All of the above • Answer-D

32. Tax anticipation loans are? • Loans to help cover the cost of taxes due_ • Loans in anticipation of tax refunds_ • Loans to cover payroll taxes_ • None of the above • Answer-B

33. Which of the following best describes the primary sources of income for most people age 20-35? • Dividends and interest. • Salaries, wages, tips. • Profits from business • Rents

34. __________ is access to funds to cover any short-term cash deficiencies. • cash management • money management • Credit management • Liquidity

35. The purpose of the tax form W-4 is: • A form used to file annual income tax returns • A form that reports an employee's annual wages and the amount of taxes withheld from his or her paycheck. • A form used by your employer to withhold the proper amount of federal income tax from your paycheck • All of the above

36. Regarding the federal income tax withholding tables, the amount of each employee's earnings withheld is affected by: • the age of the employee. • the number of exemptions claimed • the number of years working for the company. • all of these.

37. If you give something up as a result of making a decision, you are incurring a(n): • net cost • Liquidity problem • Opportunity cost • Financing cost

38. Inflation can cause difficulty in many ways. Which group would have the greatest problem during periods of high inflation that last several years? • Older, working couples saving for retirement. • Young working couples with children. • Older people living on fixed retirement income • Young couples with no children who both work

39. The U.S. Treasury is responsible for: • Issuing all Treasury bonds, notes and bills • Collection of taxes and enforcement of tax laws (through the IRS) • Overseeing U.S. banks • All of the above

40. If your income exceeds the amount that you wish to spend, you should __________ your investments or __________ loans. a) reduce; repay existing b) increase; repay existing c) increase; obtain more d) reduce; obtain more

41. Which of the following "backs" the value of money in the United States?  A. The gold stored in the Federal Reserve Bank of New York B. The acceptability of it as a medium of exchange C. The willingness of foreign government to hold U.S. dollars D. The size of the budget surplus in the U.S. government.

42. Which of the following "backs" the value of money in the United States?  A. The gold stored in the Federal Reserve Bank of New York B. The acceptability of it as a medium of exchange C. The willingness of foreign government to hold U.S. dollars D. The size of the budget surplus in the U.S. government.

43. To keep high inflation from eroding the value of money, monetary authorities in the United States:  A. Create token money that is less than its intrinsic value B. Make paper money legal tender for the payment of debt C. Establish insurance on checkable deposit accounts D. Control the supply of money in the economy

44. What is a cash loan from a credit card that often has a significantly higher interest rate: A. Bank Loan B. Cash Advance C. Credit Card Loan D. Credit Advance

45. Which act regulates what companies can advertise and say about the benefits of their loans or services and what information must be disclosed? A. Credit CARD Act B. Fair Credit Reporting Act C. Truth in Lending Act D. Credit Repair Organizations Act

46. How does the degree of risk influence the interest rate charged for a credit card? A. Higher risk, higher rate B. Higher risk, lower rate C. Lower risk, higher rate D. No influence, everyone gets the same rate

47. Your debt-to-credit ratio compares: A. how much you owe with the amount of credit available to you B. the average age of your accounts C. the mix of different categories of credit you have D. new credit inquiries

48. Who should you are a victim of identity theft, who should you contact? A. FDIC B. FDA C. FTC D. FBI

49. Which of the following is NOT a characteristic of predatory lending? A. Higher rates than the borrower qualifies for B. Excess or hidden fees in the amount financed C. Inadequate disclosure of true costs and risks D. Loan terms or structures that make it possible to reduce or pay indebtedness

50. Which of the following is NOT an example of a loan backed by collateral? A. Mortgage B. Car Loan C. Student Loan D. Secured Credit Card