How Financially Literate Are You?

Calculate: Here is a list of monthly expenses from Tanika: $200 Insurance Premium, $350 groceries, $400 on eating out, $700 rent, $75 gym membership, $300 on shopping, and $200 on random miscellaneous things. What is Tanika’s monthly spend or Burn Rate?

Tanika’s Burn Rate is $1,750 a month.

Tanika’s Burn Rate is $1,250 a month.

Tanika’s Burn Rate is $2,550 a month.

Tanika’s Burn Rate is $2,225 a month.

Evan is thinking of buying an investment but is a little nervous. He wants to buy something that will grow over time but will also be diverse. He does not want to pay a lot of management fees because he doesn’t believe you can ‘pick’ stock winners. He is wondering what type of investment you would recommend?

Mutual Fund

Dividend Fund

Single Stock

Index Fund

Dana is really hoping to get her money invested at the company she just started to work for. Ideally, she invests before the money is taxed. Which account(s) would you recommend?

Brokerage

401(k)

Roth

IRA

True or False: If your bonus lands you in a higher marginal tax bracket, you will be taxed higher on all of your income.

True

False

Ashanti is reviewing her pay stub in hopes to lower her taxable income. Which of the following would help Ashanti lower her W2 taxable income? (Check all that apply)

401(k) Contribution

Roth Contribution

Auto Insurance Premium

Health Insurance Premiums

True or False: You can create an income source that does not take any of your time.

False

True

Your Amortization Table must show you all the following information EXCEPT?

How much are the fees you are paying on the loan.

How much is the loan for.

How much of the payment goes to interest.

How much of the balance is still left.

Your friend Taylor just got their first paycheck and wants to set up her accounts, but she doesn’t know if she should use a traditional bank or a credit union. What is an advantage of a Credit Union over a Bank?

Credit Unions have different accounts with higher interest rates.

Credit Unions allow you to become part owner of the credit union.

Credit Unions provide access to technology.

Credit Unions off more physical locations nationwide.

Young professionals rely on their income to build out their financial plan. This income can be seen as something too valuable to lose. If you as a young professional wanted to transfer the risk of losing your income due to an accident, what policy would you take out?

Health Insurance

Disability Insurance

Life Insurance

Auto Insurance

What do social engineering attacks depend on?

Undetected access

Malware updates

Human interaction

Firewall protection

True or False: You can improve your credit report by correcting errors on your credit score.

True

False

Adrian is just starting out in his career and looking at the ever-changing job market he will enter. Adrian begins to wonder what his greatest asset will be. What would you tell Adrian his greatest asset is?

His investments

Himself

His income

His home

You contribute $100 to a High Yield Savings Account earning 5% interest annually. In 3 years, you will have:

$115.76

$105.76

$115

$105

Why can a Credit Company charge you interest?

Because they want you to earn rewards.

Because they do not know you that well.

Because the money is being transferred from your bank.

Because you are using other people’s money.

Which account will exchange access to your money for a higher interest rate?

Savings (Tomorrow) Account

Checking (Today) Account

Money Market Account

Certificate of Deposit Account

Which is NOT an advantage of a Roth IRA for young professionals?

Low tax bracket today.

Guaranteed investment returns.

Not taxed on growth.

Contributions are accessible.

Tracy really wants to compound her interest and take advantage of the Time Value of Money formula. She is wondering what the most important factor of the formula is?

How much do you pay in taxes.

How long you let the money work.

What return you make on the money.

How much money did you put in.

A Health Savings Account provides which tax advantage? (Check all that apply)

Tax Free Use

Tax Deferred Growth

None of the above

Tax Deduction

Which of the following are included when you itemize your deductions (Check all that apply):

Standard Deduction

Charitable Deductions

Principal Mortgage Interest

State and Local Taxes

Tanika, age 18, sees how her money can grow, she wonders if adding more along the way would make an impact. What happens if Tanika contributes $5,000 this year and every year until she is 48, with 10% return?

$878,401

$988,401

$1,088,401

$908,401

Which of these actions will provide a hacker access to your computer? (Select all that apply) 

Leaving a window open logged into account.

Downloading an attachment from a message.

Clicking on a link in message.

Connecting to public Wi-Fi.

Inflation occurs when what happens? 

The purchasing power of your dollar goes down.

The market changes denominations it uses.

The purchasing power of your dollar goes up.

The stock market has an unusually good return.

A student looking for college aid should fill out which form?

FICA

CFPB

FAFSA

When you take out a loan, the original amount borrowed is called the?

Interest

Premium

Principal

Amortize

At what tax rate will the average filer be taxed on their first $10,000 of income?

22%

12%

10%

The retirement system that has gone nearly extinct over the past 30 years is called:

IRA

Social Security

401k

Pension

After Darrel earns $100,000, he contributes $10,000 to his company 401(k) and takes the standard deduction of $14,400, what would his taxable income be?

$100,000

$75,600

$86,150

$90,000

Your Credit Score will be used in which of the following situations? (Check all that apply)

Finding a place to rent.

Getting a credit card.

Buying a car or home.

Applying for a job.

Karen renews her auto policy with details: Premium = $100 a month; Deductible = $300; and coverage is 25(person)/50(accident)/10(property). How much will Karen pay when after 8 months she hits a car with 2 people, the first person has $15,000 of injuries, the second person has $23,000 of injuries and their car has $13,000 of damage?

$4,100

$800

$3,800

$1,100

Sally is so excited that she landed a job she really wanted and at a gross salary ($62,000) she is proud of. She begins to calculate her spending: Rent will be $2,000 a month, Dept Payments $1,000 a month, Bills $1,000 a month, and that leaves her with about $1,000 a month to live on. What advice would you give Sally as she begins to plan out her finances?

Do not confuse her gross income with her net income.

It is ok to go buy the $1,000 watch she has earned it.

Double her spending by getting a Credit Card.

Save all $62,000 when she is young and give it time to grow.

You deposited $5,000 into a Roth Account 30 years ago and the account grew to $407,333. When you go to use the funds, how much would you owe in taxes?

$8,901

$5,000

$13,762

True or False: Holding an investment for longer than 1 month changes how much you are taxed.

False

True

Which of these cash management decisions is science telling us that will lead to more fulfillment and happiness over your lifetime?

$100 going toward a charitable cause.

$100 going toward buying stocks.

$100 going toward your savings.

$100 going toward a night out.

What is the key difference between a 401(k) and an IRA?

Where you work.

When you can use it.

What your investment return will be.

How it is taxed.

True or False: When you buy a stock, you become a part owner of that company.

True

False

The difference between a W2 employee and a 1099 contractor is that the company you work for will help a W2 employee do the following? (Check all that apply)

Guarantee health benefits.

Secure investment deals.

Withhold for taxes.

Contribute to retirement.

Antwan is set to make $50,000 this year as an elevator mechanic. Can you help him plan out his paycheck by suggesting the FIRST action he should take?

Spend 7% on going out for food.

Donate 1% to charitable organization.

Contribute 10% into a Savings account.

Set aside 25% for tax payments.

Sebastian has been using a debit card but sees you using your credit card. He comes with a question of ‘How can a credit card be better than a debit card?’ Which of these is an advantage of credit cards? (Check all that apply)

You cannot waste money.

Start your credit history.

Different insurance features.

Earn Rewards from using.

As a young professional, what percentage would you set aside for Taxes?

25%

10%

33%

Darrel continues to get emails about updating his address for a package being delivered from a company he has done business with in the past but not recently. What type of attack is Darrel experiencing when he receives emails about updating his address for a package from a company, he hasn't recently done business with?

Trojan Horse

Phishing

Ransomware

Malware

An Index Fund will provide what kind of investment return over time?

No correlation with the market.

Worse than the market.

Better than the market.

Average of the market.

True/False: It is less risky to buy an individual stock than a group of stocks.

False

True

A mutual fund is an investment tool that:

Cannot lose money.

Includes a variety of stocks selected for a fee.

Must be kept invested for a specific period of time.

Includes one stock the investor selected.

Adrian made the minimum amount due payment this month but is furious because his credit company still charged him! What can you explain to Adrian why this happened?

Because he did not pay the MAD automatically.

Because he did not have enough money in his Checking Account.

Because he did not pay with his credit card.

Because he did not pay off the entire balance.

Where does every successful financial plan begin?

With the end in mind.

With what you want now.

With a way to make money.

With an ulterior motive.

Which of the following will NOT be removed when you go from Gross income to Net income? (Check all that apply)

Federal Income

FDIC

State Income

FICA

Kobe is really trying to take better care of his finances and wants to find ways to lower the cost of his insurance policies. If Kobe does not plan to use his policy a lot, which of these would NOT save Kobe money on his insurance policy?

Improving your credit score.

Bundling your policies.

Lowering your deductible.

Shopping your policy around.

What advantages does a financial institution (Bank or Credit Union) offer? (Check all that apply)

System

Liquidity

Inflation

Security

The cost to own an insurance policy is called:

Co-Pay

Co-Insurance

Deductible

Premium

Part of the Fed’s role is to try and control which of the following?

Tax Brackets

Stock Prices

Interest Rates

Government Spending

If you are human, leave this field blank.

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