Master the Art of Budgeting and Income with This Finance Quiz

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Which of the following is NOT a characteristic of a credit union?

Nonprofit
For-profit (correct)
Cooperative
Member-owned

What is the purpose of a checking account?

To provide credit for the purchase of consumer goods and services
To protect your money in the event of a bank failure
To easily make withdrawals, deposits, and fund transfers (correct)
To deposit money safely with the bank

What is market liquidity?

The ability to quickly convert an asset into cash
The ability to quickly obtain credit
The ability to quickly transfer funds between accounts
The ability to quickly purchase or sell an asset without causing a drastic change in the asset's price (correct)

What does FDIC protect in the event of a bank failure?

Your money (A) Signup and view all the answers

What is a non-bank financial institution?

A financial institution that is not legally a bank (B) Signup and view all the answers

What is the main function of an investment bank?

To provide investment and financial services for corporate and institutional customers (B) Signup and view all the answers

What is the typical duration of a savings account?

5 years (D) Signup and view all the answers

What is the purpose of under-insured motor coverage?

To protect you if you're hit by a driver who doesn't have enough coverage to pay for the damages or injuries they caused (C) Signup and view all the answers

What is the main advantage of a money market account?

Higher interest rate than regular savings accounts (C) Signup and view all the answers

Which of the following is the definition of budgeting?

The process of calculating how much money you must earn or save during a particular period of time, and of planning how you will spend it (C) Signup and view all the answers

What is the purpose of an amortization schedule?

To calculate the amount of money you pay in principal and interest over time (C) Signup and view all the answers

What is net pay?

Take-home pay after taxes (B) Signup and view all the answers

What is a tax deduction?

A provision that reduces taxable income (B) Signup and view all the answers

What is the purpose of the Federal Income Contributions Act (FICA) tax?

To fund Social Security and Medicare (A) Signup and view all the answers

What is a progressive tax?

Takes a larger percentage of income from high income taxpayers (B) Signup and view all the answers

What does the term 'postsecondary' refer to?

Any education option after high school (D) Signup and view all the answers

What is collateral?

Something pledged as security for repayment of a loan (B) Signup and view all the answers

What is the main function of a commercial bank?

To accept deposits from the public and give loans for consumption and investment (A) Signup and view all the answers

What are some steps to consider when planning for college?

Fill out the FAFSA, Search for scholarships, Choose an affordable school, Use grants if you qualify (B) Signup and view all the answers

What is an interest inventory?

A testing instrument designed to measure an individual's interest in a variety of activities (A) Signup and view all the answers