Personal And Family Finance
EOC Test Review w/ Answers
updated
2010
1
Figure sales tax
2
Calculate unit price
3
Sale price discount with sales tax
4
Calculate %
multiply and is smaller than
original number unless it is over a
100% to start with like 110%
5
Insurance what does 10/20/10
mean?
6
Better Business Bureau—
Consumer Protection Agencies
7
1.1 The term ____ means to use resources
effectlively to achieve goals and solve
problems.
A.
B.
C.
D.
Decision
Long term goals
Management
Trade-off
Answer: C
8
1.1 The term ___ means the steps one
takes to make the best decision.
A.
B.
C.
D.
Decision-making process
Goals
Priorities
Short term goals
Answer: A
9
1.1 The term ___ means an exchange of one thing in
return for another, such as, riding a bike in college
because you know that after you graduate you will be able
to afford a car therefore keeping your expenses low in
college.
A.
B.
C.
D.
C
Goals
Needs
Trade-off
Wants
10
1.2 Which is the first step in the
decision making process?
A.
B.
C.
D.
C
Act on the decision
Identify available resources
Identify the decision to be made
Evaluate the results of the decision
11
1.3 A person who might have a positive
influence on your decisions could be:
A.
B.
C.
D.
Your best friend
Your parents
A national sports figure
All of the above
D
12
1.4 The correct steps of a SMART goal
are:
A. Smart, measurable, accurate, real time, timeless
B. Specific, measurable, attainable, realistic, time
bound
C. Setting a goal, making it right, attacking it, run
with it, tackle it
D. Seasonal, marketable, abstaining, right, tellable
B
13
2.1 The term ___ means forms of reward for employment
beyond salary, including health insurance, vacation and
holiday time, and retirement plans
A.
B.
C.
D.
Career
Comp time
Fringe benefits
Job sharing
C
14
2.1 The term ___ means a summary of your
qualifications for a job
A.
B.
C.
D.
Entrepreneur
Interview
References
Resume
D
15
2.2 In order to make an informed career
decision, a high school student will want to:
• a. commit to a profession that requires a
college degree
• b. choose a career that offers the amount of
money desired
• c. develop personal goals, complete an
interest inventory, and research careers
• d. choose a training program that will
guarantee employment after the course work
is completed
C
16
2.3 Salary, location and environment, and
benefits are factors to consider when:
• a. determining your cost of living
expenses
• b. evaluating a job offer
• c. researching future career
opportunities
• d. estimating annual income
B
17
2.4.2 A resume should describe a job
seeker’s ___.
A.
B.
C.
D.
Age and marital status
Medical history
Police record, if any
Volunteer activities
D
18
2.4.2 Helpful hints for preparing a
resume include:
A.
B.
C.
D.
Exaggerate when possible
Proofread for spelling and grammar
The longer your resume the better
Try not to show self-confidence
B
19
2.4 All of the following are tips to
follow when completing a job
application EXCEPT:
A. Complete in blue or black ink
B. Write legibly
C. Take your information on a notecard with
you
D. Leave blanks if the information is not
applicable to you
D
20
2.5 Attributes that will make a positive
impression during a job interview are:
A. Bragging about your accomplishments
B. Explaining why you are a better applicant
than the other applicants
C. Dressing in your favorite casual clothes
D. Using your very best manners
D
21
2.6 Work related forms that should be
completed when hired include all of the
following EXCEPT:
A.
B.
C.
D.
W4
Medical
Income tax return
Life insurance
C
22
2.7 Identify an example of an entry level
job in the consumer and management
field:
A.
B.
C.
D.
A
Bank teller
Consumer affairs director
Consumer safety inspector
Financial planner
23
3.1 The term ___ means legal action which
requires a portion of a person's income to be
with held from their paycheck to repay a debt
A.
B.
C.
D.
Deductions
Garnishment
Net pay
Overtime
B
24
3.1 The term ___ means amount of money taken from
an employee's gross pay for taxes, insurance, Social
Security, and other benefits
A.
B.
C.
D.
Deductions
Direct deposit
Gross pay
Net Pay
A
25
3.1 The term ___ means the amount of
income left after taxes and other
deductions are taken out
A.
B.
C.
D.
Direct Deposit
Gross Pay
Net Pay
Overtime
C
26
3.2 The method of paying
employees that is the most secure
from theft or loss is:
A.
B.
C.
D.
Indirect deposit
Paycheck
Direct deposit
cash
C
27
3.3 If you receive a salary, you can determine
how much gross and net pay you will earn in a
year by looking at one pay stub and:
A. Dividing the figures for gross and net pay by the
number of pay periods during the year
B. Multiplying the difference between gross and
net pay by the number of pay periods during
the year
C. Multiplying the figures for gross and net pay by
the number of pay periods during the year
D. Multiplying the sum of the gross and net pay by
the number of pay periods during the year
C
28
3.4 FICA taxes are another name
for:
A.
B.
C.
D.
Excise taxes
Income taxes
Property tax
Social Security tax
D
29
3.4 By January 31, your employer will send you
Form ___ showing your total earnings for the year
and total amount of taxes withheld.
A. 1040
B. 1099
C. W-2
D. W-4
C
30
3.5 The purpose of Form ___ is to specify
the number of allowances you are
claiming.
A.
B.
C.
D.
1040
1099
W-2
W-4
D
31
3.5 The purpose of Form __ is to
verify that an employee has the
right to be employed in the U.S.
A.
B.
C.
D.
W-2
W-4
1099
I-9
D
32
3.5 The purpose of Form __ is to show how
much interest you were paid by the bank.
A.
B.
C.
D.
1040
1040 EZ
1099
W-4
C
33
4.1 The term ___ means the amount of
time it takes for money to double in value.
A.
B.
C.
D.
70-20-10 rule
Check 21
Inflation
Rule of 72
D
34
4.1 The term ___ means those checks issued by a
depositor but not yet reported on a bank
statement.
A. Check 21
B. Fixed expenses
C. Outstanding Check
D. Overdraft
C
35
4.1 The term ___ means lack of sufficient
funds to cover the full amount of the check
A.
B.
C.
D.
Overdraft
Outstanding Check
Rule of 72
Reconcile
A
36
4.1 The term ___ means an orderly program
for spending, saving, and investing the money
you earn to achieve desired goals.
A.
B.
C.
D.
Spending Plan
Financial plan
Investment risks
Overdraft
B
37
4.1 The term ___ means a cash management tool
in which 70% of income is spent, 20% is saved, and
10% is invested.
A. Rule of 72
B. 70-20-10 rule
C. Check 21
D. Investment risks
B
38
4.1 The term ___ means when a written check is
electronically transferred and funds are immediately
withdrawn from the account; similar to a debit card.
A.
B.
C.
D.
70-20-10 rule
Check 21
Rule of 72
Outstanding check
B
39
4.2 A financial goal will contain
the following elements:
A. Time bound, measurement, life cycle
B. Specific, measurable, attainable,
realistic, time bound
C. Realistic, needs, wants, values
D. Attainable, realistic, time bound,
specific
B
40
4.2 One element of a financial goal is missing in the
example below. Which one is it?
“I will save $150 each month to go on a vacation
in one year.”
A.
B.
C.
D.
Time Bound
Specific
Attainable
Measurable
A
41
4.2 Financial goals are
accomplished because of:
A.
B.
C.
D.
luck
coincidence
financial planning
financial goals cannot realistically be
accomplished
C
42
4.3 A spending plan is comprised of which of
the following three sections?
A.
B.
C.
D.
Income, expenses and liabilities
Income, expenses and taxes
Income, expenses, and net gain/loss
Income, expenses and net worth
statement
C
43
4.3 What is the first step that should be
completed when creating a spending plan?
A.
B.
C.
D.
B
Implement and control
Tracking of current income and expenses
Make adjustments to spending
Allocate money to income and expense
categories
44
4.3 If expenses were to exceed income on
a spending plan, what would be a
financially smart solution?
A.
B.
C.
D.
Decrease expenses
Use a credit card more often
Earn less income
Increase purchases
A
45
4.4 Funds deposited in a federally insured
account (FDIC) are protected against loss for
up to:
A.
B.
C.
D.
$50,000.00
$1,000,000.00
$250,000.00
$10,000.00
C
46
4.4 When comparing and contrasting Credit
Unions and Commercial Banks, it could be said
that credit unions:
A. Are a very profitable depository institution
B. Are insured by the FDIC
C. Have members that possess a common bond
such as people who live, work or attend school
in a well defined geographical area
D. Provide loans at a higher interest rate and
savings instruments with a lower rates
C
47
4.5 Check 21 has made it possible
for:
A. Float time to increase
B. Writing a check to be processed as quickly as
a debit card
C. The possibility of check fraud to be
eliminated
D. Direct deposit to be the preferred method of
receiving your check
B
48
4.5 The term ____ means to bring a bank
statement and your own record into agreement
A. Reconcile
B. Spending plan
C. Financial plan
D. Overdraft
A
49
4.6 When comparing and contrasting savings
and investing, which of the following is true?
A. Savings is used to pay for long-term
goals, while investing is used to pay for
emergencies
B. Savings is less liquid than investing
C. Savings provides the foundation for
financial security, while investing is used
to pay for long-term goals, such as
retirement
D. All of the above
C
50
4.6 Why is it important to save
money in liquid (easy to access)
assets?
A. To provide easily accessible money in
case of an emergency
B. To provide a foundation for financial
security
C. To help pay for unanticipated expenses
D. All of the above
D
51
4.6 The factors that affect the time value
of money are ________________.
A. amount of money, length of time, and
interest rate
B. the return or profit generated by savings
and investing
C. the price of money and the age an
individual began investing.
D. goals, trade-offs, and opportunity costs.
A
52
4.6 If you want to see how long it will take for your
money to double,what is the formula you would
follow?
A.
B.
C.
D.
72/interest rate
Interest rate/72
Amount of money/72
72/number of years
A
53
4.7 A growth fund (investment) seeks stock
whose prices are likely to:
A.
B.
C.
D.
Fall
Stay the same
Rise
Have their risk increase
C
54
4.7 Which would be considered an
income investment?
A. A stock that reinvests it’s income
B. A stock that pays its stockholders
dividends or interest payments
C. A stock that is high risk
D. A stock that might go public
B
55
5.1 The term ___ means temporary
continued coverage of health insurance due
to loss of employment.
A.
B.
C.
D.
Cobra
Exclusion
Rider
Co-insurance
A
56
5.1 The term ___ means a person named in an
insurance policy to receive the money from the policy
once the conditions of the policy have been met.
A. Insurance risk
B. Policy Holder
C. Beneficiary
D. Rider
C
57
5.1 The term ___ means request given to an
insurance provider to recover a cost of a loss.
A.
B.
C.
D.
Co-pay]
Co-insurance
Exclusion
Claim
D
58
5.1 The term ___ means specific items
not covered in an insurance policy.
A.
B.
C.
D.
Liability
Exclusion
Co-pay
Deductible
B
59
5.1 The term ___ means an
unexpected financial loss.
A.
B.
C.
D.
Insurance risk
Insurance
Policy
Rider
A
60
5.1 The term ___ means protection against
financial loss.
A.
B.
C.
D.
Policy
Insurance
Beneficiary
COBRA
B
61
5.2 What effects the amount of an
insurance premium?
A.
B.
C.
D.
Type of insurance
Terms of insurance policy
Amount of deductible
All of the above
D
62
5.2 Which of the following is a type of insurance
that can be purchased that can protect you from
financial loss?
A.
B.
C.
D.
Stock market losses
Health care expenses
Maintaining the price of your home
Protecting your job
B
63
5.2 The type of insurance that is the minimum
required by law for automobiles is:
A.
B.
C.
D.
Medical payment insurance
Physical damage insurance
Liability insurance
Uninsured and underinsured motorist
insurance
C
64
5.2 Two types of insurance
included in a homeowner’s policy
are:
A.
B.
C.
D.
C
Medical and death benefit
Fire and flood
Property and liability
Collision and comprehensive
65
5.2 To protect future income and money,
home owner’s insurance should be written
so that it covers:
A.
B.
C.
D.
The next owner of the property\
Replacement cost of the property
Any improvements to the property
Lawns, trees, and shrubs
B
66
5.3 Life insurance should be
purchased when:
A.
B.
C.
D.
Individual has dependents
Individual reaches the age of 50
Individual flies in an airplane
Individual gets their first job
A
67
5.2 Perils that are covered in a
homeowner’s policy would
include:
A. Lightening, falling trees, tornadoes
B. Someone slipping and falling on your icy
sidewalk
C. Arson caused by the homeowner
D. Carpet stained by a spill
A
68
5.3 Which insurance is likely to be
needed by a college student?
A.
B.
C.
D.
Homeowners
Renters
Flood insurance
Life insurance
B
69
6.1 The term ___ means criminal activity to
fraudulently acquire personal information
A.
B.
C.
D.
Co-sign
Phishing
Default
Bankruptcy
B
70
6.1 The term ___ means a numerical
rating based on a person's credit history
that represents their credit worthiness.
A.
B.
C.
D.
Character
Capacity
Credit Rating
Credit Score
D
71
6.1 The term ___ means failure to repay a
debt.
A.
B.
C.
D.
Credit
Default
Phishing
Bankruptcy
B
72
6.1 The term ___ means legal process that
allows someone deeply in debt to create a
plan to repay their debts.
A.
B.
C.
D.
Bankruptcy
Capacity
Credit
Condition
A
73
6.1 The term ___ means a record of
whether or not a person has paid his or her
bills on time in the past.
A.
B.
C.
D.
Capital
Default
Credit
Credit history
D
74
6.2 If a credit card is used properly,
what benefits does it have for the
cardholder?
A. The cardholder will pay higher interest
rates on other forms of credit
B. The cardholder will develop a positive
credit history
C. The cardholder will develop a negative
credit history
D. There are no benefits for the
B cardholder
75
6.6 Only making the minimum
payment on a credit card every
month will:
A. only pay a small percentage of the
total balance owed
B. make the final amount paid
substantially higher than the amount
initially charged to the card
C. result in slow progress towards paying
off the total balance on the card
D. All of the above
D
76
6.1 What is credit?
A. Money allocated to a specific account for
future use by the consumer without borrowing
B. Goods, services, or money received in
exchange for a promise to pay a definite sum
of money at a future date
C. The ability and willingness of an individual to
pay back a loan as perceived by the lender
D. An individual’s character, capital, capacity,
collateral, and conditions
B
77
2.3 Steven is considering taking a job with a company that is
offering gym memberships, flexible hours, repayment of
education loans, merchandise discounts, and childcare. These
components of
the job offer are called:
a. fringe benefits
b. job perks
c. work incentives
d. competitive hiring practices
A
78
6.3 Payday loans are often difficult for
consumers to pay back because:
A. they forget the due date
B. the entire amount is due on the due
date
C. they make payments in installments
D. None of the above
D
79
6.4 What is a way for a consumer to
develop a negative credit history?
A.
B.
C.
D.
Pay bills consistently and on time
Keep number of credit inquiries low
Have a criminal record
Hold a low number of credit/store
cards
C
80
6.4 A consumer will develop a
positive credit history if they
(best answer):
A. Maintain reasonable amounts of
unused credit
B. Pay phone and utility bills on time
C. Pay cash for the majority of purchases
D. All of the above
A
81
6.5 According to the Federal Truth in Lending Act,
where must the terms and conditions of credit
cards be posted?
A.
B.
C.
D.
B
On the back of the credit card
In the Schumer box
On the credit card’s Web site only
They do not need to be posted
82
6.7 Driver’s licenses, social security
numbers, account numbers, and copies of
bills may be used by someone to:
A.
B.
C.
D.
Open a credit card account
Obtain a loan
Get a driver’s license
All of the above
D
83
6.8 Which item should not be carried with
you on a regular basis?
A.
B.
C.
D.
Driver’s license
Utility bills
Pin number
Social security card/number
D
84
6.9 If you are a victim of identity
theft, what should you do?
A.
B.
C.
D.
Close affected account
File a police report
Contact the credit report agencies
All of the above
D
85
7.1The term ___ means comparing
products and prices in different stores
before making a purchase
A.
B.
C.
D.
Comparison
Impulse buying
Warranty
Contract
A
86
7.1 The term ___ means the price of an item
per ounce, pound, or other accepted unit of
measure.
A.
B.
C.
D.
Comparison shopping
Impulse buying
Unit pricing
Warranty
C
87
6.2 Discuss consumer rights and
responsibilities
The right to be heard
The right to safety
The right to be informed
The right to choose
To make an informed decision
To treat merchandise with care
To pay your debts
To demand reliable products
88
7.3 Review types of advertising
•
•
•
•
•
•
Bait and switch
Sex appeal
Testimonials
Propaganda
Bandwagon
attention getter
89
7.4 A pair of shoes that costs $10
and is on sale for 10% off would
cost you how much?
A.
B.
C.
D.
$1
$5
$9.90
$9
D
90
7.5 Comparison shopping factors
• Discuss:
– unit pricing
– Quality
– warranty
91
7.6 Consumer protection agencies
• Consumer protection agency
• FTC
• Magazine: Consumer Report
92
7.7 Warranties and Contracts
93
8.1Terms
•
•
•
•
•
•
•
•
•
•
•
•
•
1. Closing costs fees paid by the buyer or seller at the time the purchase of the
house is finalized
2. Deed the legal document by which the title is transferred from one person to
another
3. Down payment initial cash payment paid when buying an item on credit
4. Equity the difference between the value of property and the amount owed for
that property
5. Foreclosure a legal proceeding in which the creditor either sells or
repossesses property for failure to repay a debt
6. Lease a legal document a lessee signs when agreeing to rent housing for a
specified period of time; also for an automobile
7. Lessee someone who pays rent to use or occupy property owned by someone
else; also known as tenant
8. Lessor a person who owns a property and rents it to someone else; also know
as landlord
9. Lien a claim upon property to satisfy a debt
10. Mortgage long term home loan
11. Security Deposit a fee paid by a lessee/tenant to cover the cost of any future
damage that may be caused to the unit
12. Sublet to move out of a rental unit before the lease is up and rent the unit to
someone else while retaining legal responsibility for the lease
94
13. Title legal document showing ownership of a vehicle
8.2 Reasons for renting, leasing,
buying
A. Renting/Leasing
A. Easier and faster to move
B. No financial obligation
C. Know each month exactly what you owe
B. Buying
A.
B.
C.
D.
Harder to move
Equity
Responsible for upkeep
Pride in ownership
95
8.3 Methods for purchasing home
96
8.4 Basic components of lease
97
8.5 Reasons for public
transportation verses buying or
leasing a vehicle
• For using public transportation:
– No insurance on vehicle
– No upkeep
– No payments
• Against using public transportation:
– Can go when you want
– Available when needed
98