Save & Invest
Credit & Debit
Planning for College
Spending Plan
Entrepreneurship
100
The biggest difference between a savings account and an investment account a) The financial institutions where you have the accounts b) The amount of money you can accumulate in each account c) The insurance protection from FDIC
c) The insurance protection from FDIC - Investments are never insured by FDIC. But savings accounts are insured up to $250,000.
100
How often should you use a credit card? a) Basically never b) When paying cash is impossible or inconvenient c) Whenever you need or want to buy something
b) Using your credit card when using cash is inconvenient and when you know you can easily afford to pay the bill can help you establish good credit. If you use your credit card too much, it's easy to spend more than you can afford. That can get you into serious financial trouble. A wiser strategy might be to use your credit card when it's inconvenient or impossible to use cash.
100
By filling out a FAFSA application, you may qualify for a federal: a) Loan or grant b) Work-study arrangement c) All of the above
c) You must fill out a Free Application for Federal Student Aid (FAFSA) to qualify for federal loans, grants, AND work-study arrangements. If you aren't ready to fill out an application yet, you can check out FAFSA's student aid forecaster at www.FAFSA4caster.ed.gov. This service helps you estimate the amount of student aid that you'll likely qualify to receive.
100
The best reason for creating a budget is: a) To have rules to live by b) To please your parents and teachers c) To manage your spending to achieve your goals
c) The best reason for creating a budget is to help you manage your income and expenses. When you do that, you'll be better able to meet your goals since you're in control of your money.
100
True or false: A business budget is significantly different from a personal budget.
False - A budget is a budget, whether you're managing your personal finances or your business. And every budget has two parts, the money that's coming in and the money you're spending. A business budget might be much more complicated, but the concept is the same.
200
True or False: Saving and investing are both best suited for meeting long-term goal
False - You use savings accounts to cover emergencies, provide a cash cushion and meet short-term goals. Your investment accounts help you accumulate money to meet long-term goals.
200
True or false: As long as you pay the minimum payment due on your credit card bill, you won't owe interest.
False - Actually, the only way to avoid paying interest on credit card purchases is to use a card that doesn't charge interest if you pay your balance in full and on time. You'll still have an outstanding balance on which interest is charged.
200
True or false: Government loans and private loans usually cost about the same.
False - Government loans typically cost less because the government wants to make it easier for you to afford an education.
200
True or false: A budget is essential for short-term but not long-term goals.
False - Budgeting is essential for all your goals. What you spend today affects what you can spend next week and 50 years from now. It's all about today and tomorrow.
200
The best reason for starting a business is to: a) Stop going to school b) Earn a living c) Fill a need in the community and do something you love
c) Starting your own business is hard work, and many new businesses fail. For these reasons, you should start a business because it's something you feel passionate about and because you have a good idea — not just because you want to make money.
300
Savings and investments can grow at a faster rate, thanks to the power of: a) Diversification b) Compounding c) Direct deposit
b) Compounding - When earnings compound, they are added to your principal. This creates a larger principal on which new earnings accumulate.
300
Your credit report is available to: a) Potential lenders and employers b) Potential employers and cell phone providers c) All of the above
c) Employers, with your consent, and providers of credit have a right to see your credit report.
300
Which of the following best describes a scholarship? a) Covers tuition for all four years b) Covers room and board for all four years c) May cover tuition, room and board and other college-related expenses
c) Scholarships may cover some or all of the cost of college. They're usually awarded year-by-year..
300
The first step to creating a budget is: a) Knowing what your income is b) Listing your expenses c) Cutting back on spending
a) Before you budget you need to know what your income is. Your income establishes how much you have available to spend.
300
True or false: You should have an idea how much income you'll make until you start running the business.
True - In creating a budget and business plan, the first step is to estimate income, or revenue. Then you can estimate expenses to see if income will cover expenses.
400
What's the risk/return relationship? a) The more investment risk you take, the more potential there is for a higher long-term return b) The less investment risk you take, the more potential there is for a higher long-term return c) The more risk you take, the higher your return will be, guaranteed
a) If you want a higher than average investment return, you do have to be willing to take more risk. Remember, though, that return is not guaranteed when you invest, so you could take risk and still lose money.
400
One way to improve your credit score is: a) Borrow up to your credit limit to show you will pay it back b) Always pay your outstanding credit bills on time c) Choose one bill every month to pay in full and skip the others
b) Paying on time isn't the only way to improve your credit score but it is one of the most important. Borrowing up to your credit limit is a danger sign even if you do pay it all back. Lenders like you to borrow much less than you could. Skipping payments is a real danger sign and will damage your credit score. The right answer is always making all your payments on time.
400
True or false: You CANNOT take a student loan if you receive scholarship or grant money.
False - Even if you receive scholarships or grants, you can still take a loan if you need the money. In fact, many students who receive scholarships also have loans.
400
True or false: Food is an example of a fixed expense.
False - Food is a variable, not a fixed, expense. Even though you need to eat to live, what you spend on it is largely up to you. If you're looking for ways to cut back, cooking more and eating out less is one strategy.
400
Which of the following is likely to be the biggest risk you face when you start a business? a) Financial (making enough money) b) Emotional (feeling stressed) c) Environmental (natural disasters, such as hurricanes or earthquakes)
a) While you do face the risks of being under stress, this isn't the biggest risk. The greatest risks you face when you start a business are financial. These include making enough money to succeed and being able to pay back any loans you took out to start the company. But, the stronger your business plan, the greater chance you'll have of succeeding.
500
The interest rate you earn on a Certificate of Deposit (CD) is usually higher than the interest on a savings account at the same bank because a) Your account balance in a CD must be higher than it is in a savings account b) You have to be older to buy a CD c) You agree to leave your money on deposit for a specific term
c) Because the bank knows the money will be on deposit longer, it is willing to pay a higher rate than on a savings account where you could withdraw at any time. You'll also find that the longer the CD's term the higher the rate is — though the difference may be small.
500
The best source of information about your credit card is: a) The card agreement b) The lender's representative you talk to about the card c) Information you can find online
a) The agreement that comes with your card is the authoritative source on the terms, conditions, fees and all other details about your use of the card. When those terms change, the lender sends you a notice. The representative may get it all right, but may not cover all the details. Or he or she might be more interested in signing you up than covering the facts.
500
What's one effective way to control the total cost of attending college? a) Take fewer courses every year. b) Attend a public college or university with low tuition. c) Get a job and wait a few years to enroll.
b) You can control the cost of your education by choosing a school with lower tuition. Or you might combine two years of local community college with two years at one of your state's public four-year schools.
500
At least what percent of your income should you try to save? a) 50% b) 5% c) 10%
c) You should aim to save at least 10% of your income. It's essential to meeting your goals for the future. The more you save, the better — and faster you'll be able to meet your goals.
500
True or false: Every company has the same start-up costs.
False - All companies are unique — selling different products or services to all types of customers — their start-up costs are different too. For example, while a start-up Internet company might need to make big investments in software and other technology, a landscaping business might need to invest in big power tools and lawnmowers.
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