Credit and Debt Basics
What is a credit score?
A) A measure of your income
B) A number that represents your creditworthiness
C) The amount of money you owe
D) A type of credit card
B) A number that represents your creditworthiness
What does ROI stand for in the context of education?
A) Rate of Interest
B) Return on Investment
C) Ratio of Income
D) Reason of Investment
B) Return on Investment
What is the primary purpose of financial aid?
A) To provide scholarships for extracurricular activities
B) To help cover the cost of tuition, books, and other educational expenses
C) To pay for student travel during school breaks
D) To cover living expenses after graduation
B) To help cover the cost of tuition, books, and other educational expenses
What is the term for a business strategy that aims to convince consumers to buy products they don't need?
A) Impulse buying
B) Planned obsolescence
C) Marketing tactics
D) Consumer manipulation
A) Impulse buying
What is the primary function of a bank?
A) To provide loans and offer savings accounts
B) To sell insurance products
C) To invest in the stock market
D) To manage your personal finances
A) To provide loans and offer savings accounts
Which of the following can negatively affect your credit score?
A) Paying your bills on time
B) Opening multiple new credit accounts in a short period of time
C) Keeping credit card balances low
D) Checking your credit report regularly
B) Opening multiple new credit accounts in a short period of time
Which of the following is considered a direct benefit when calculating the ROI of a college degree?
A) The amount of student loan debt you take on
B) The salary you earn after graduation compared to your tuition costs
C) The number of courses you take in college
D) The time you spend on extracurricular activities
B) The salary you earn after graduation compared to your tuition costs
Which of the following is a type of financial aid that does not need to be repaid?
A) Student loan
B) Work-study program
C) Scholarship
D) Credit card
C) Scholarship
What is the benefit of comparing prices before making a purchase?
A) To make sure you're spending as much money as possible
B) To ensure you're getting the best deal and saving money
C) To keep up with the latest trends
D) To avoid making any purchases
B) To ensure you're getting the best deal and saving money
What is the difference between a checking account and a savings account?
A) A checking account earns interest, while a savings account does not
B) A checking account is used for everyday transactions, while a savings account is for saving money over time
C) A savings account allows unlimited withdrawals, while a checking account has restrictions
D) There is no difference; both accounts serve the same purpose
B) A checking account is used for everyday transactions, while a savings account is for saving money over time
What is the term for borrowing money that must be paid back with interest?
A) Loan
B) Mortgage
C) Credit
D) Grant
C) Credit
How can someone maximize their education ROI?
A) By choosing a college that has the highest tuition fees
B) By selecting a degree with high earning potential and job opportunities
C) By attending college without a clear career goal
D) By avoiding internships and work experience during college
B) By selecting a degree with high earning potential and job opportunities
What is the FAFSA and why is it important?
A) A test you take to determine your eligibility for scholarships
B) The Free Application for Federal Student Aid, used to determine eligibility for federal aid
C) A loan application for private student loans
D) A budget plan to help students manage living expenses
B) The Free Application for Federal Student Aid, used to determine eligibility for federal aid
Which of the following is an example of consumer rights protection?
A) Warranty on a product
B) Advertising claims
C) Seasonal sales
D) Brand loyalty programs
A) Warranty on a product
What is an ATM used for?
A) To make deposits and withdrawals from your bank account
B) To apply for loans
C) To schedule appointments with bank representatives
D) To convert foreign currency
A) To make deposits and withdrawals from your bank account
Which of the following is a good way to build your credit score?
A) Maxing out your credit card
B) Paying your bills on time and keeping credit card balances low
C) Ignoring your credit card bills
D) Closing all your credit accounts
B) Paying your bills on time and keeping credit card balances low
Which factor is important to consider when assessing the ROI of a college education?
A) The number of parties and social events available on campus
B) The potential earnings in your field of study compared to the cost of the program
C) The size of the campus and number of buildings
D) The length of time spent in college
B). The potential earnings in your field of study compared to the cost of the program
What is the difference between a grant and a loan in terms of financial aid?
A) A grant needs to be repaid, while a loan does not
B) A grant is awarded based on need, while a loan is awarded based on academic performance
C) A grant does not need to be repaid, while a loan must be repaid with interest
D) A grant is for undergraduates only, while a loan is for graduate students
C) A grant does not need to be repaid, while a loan must be repaid with interest
A) The color of the product
B) Whether the reviewer received the product for free
C) The length of the review
D) How many reviews the product has
B) Whether the reviewer received the product for free
What is a credit score, and why is it important?
A) A number that shows how much money you have in your savings account
B) A number that represents your ability to repay borrowed money and impacts your loan eligibility
C) A number that indicates how much money you owe on credit cards
D) A number that determines how much interest you earn in your savings account
B) A number that represents your ability to repay borrowed money and impacts your loan eligibility
What is the purpose of a credit report?
A) To track how much you spend on entertainment
B) To list your income and expenses
C) To show how well you manage debt and your credit history
D) To report the total amount of money you have in the bank
C) To show how well you manage debt and your credit history
Why is it important to compare the ROI of different schools or programs before enrolling?
A) To determine which school has the most extracurricular activities
B) To ensure the cost of tuition aligns with your long-term career and earning goals
C) To find out which school has the best sports teams
D) To see which school offers the longest summer break
B). To ensure the cost of tuition aligns with your long-term career and earning goals
Which of the following is typically required when applying for federal financial aid?
A) Your high school transcript
B) A credit check
C) The FAFSA application
D) A letter of recommendation from a teacher
C) The FAFSA application
What is a "return policy"?
A) A fee charged when a product is returned
B) A policy that allows you to return products and get your money back or exchange them
C) A guarantee that the product will be delivered on time
D) A list of instructions on how to use the product
B) A policy that allows you to return products and get your money back or exchange them
What does it mean to "overdraw" your bank account?
A) You have withdrawn more money than is available in your account
B) You have deposited more money than your account can hold
C) You have transferred funds to another bank
D) You have paid off all your debts
A) You have withdrawn more money than is available in your account