W!SE Financial Literacy Certification Test

When their car's value is low enough that the cost of the insurance deductible and premiums aren't worth paying.

A policy with a set duration limit on the coverage period that pays out upon death only, with no savings or investment component.

A life insurance contract with level premiums that includes both insurance and an investment component.

<p>A type of insurance plan that gives access to certain doctors and hospitals, often requiring co-pays for medical services.</p> Signup and view all the answers

<p>Possessions within the home and isolated events not covered by the property insurance held by the owner.</p> Signup and view all the answers

<p>Income protection for individuals who become disabled and can no longer work, eligible if they have paid FICA tax for a certain period.</p> Signup and view all the answers

<p>Increase deductible, purchase a low profile car, drop unneeded coverage, drive less, safety discounts, student discounts, combine policies.</p> Signup and view all the answers

<p>Financial instruments representing ownership in a corporation (stocks) or a creditor relationship with a governmental body or corporation (bonds).</p> Signup and view all the answers

<p>A market condition where the trend is up, characterized by rising prices.</p> Signup and view all the answers

<p>A debt investment where an investor loans money to an entity for a defined period at a fixed interest rate.</p> Signup and view all the answers

<p>An investment vehicle made up of a pool of funds collected from many investors to invest in securities.</p> Signup and view all the answers

<p>The practice of spreading investments across various assets to reduce risk.</p> Signup and view all the answers

<p>A distribution of a portion of a company's earnings to its shareholders.</p> Signup and view all the answers

<p>Short-term debt obligations backed by the U.S. government with a maturity of less than one year.</p> Signup and view all the answers

<p>Net worth = value of assets - amount of liabilities.</p> Signup and view all the answers

<p>Pension, 401K, traditional IRA, and Roth IRA.</p> Signup and view all the answers

<p>The decrease in purchasing power of money, typically targeted by the government to be around 2-3%.</p> Signup and view all the answers

<p>To regulate the securities markets and protect investors.</p> Signup and view all the answers

<p>To conduct national monetary policy to ensure maximum employment and stable prices.</p> Signup and view all the answers

<p>Insures deposits in the U.S. against bank failure.</p> Signup and view all the answers

<p>A regulatory agency charged with overseeing financial products and protecting consumers.</p> Signup and view all the answers

<p>Income derived from active participation in a trade or business, including wages, salary, tips, commissions, and bonuses.</p> Signup and view all the answers

<p>Any income that comes from investments and other sources unrelated to employment services.</p> Signup and view all the answers

<p>If you are not claimed as a dependent on another taxpayer's return, then you can claim one personal tax exemption.</p> Signup and view all the answers

<p>The IRS allows you to take additional exemptions for each dependent you claim.</p> Signup and view all the answers

<p>The ability to convert an asset to cash quickly and with minimal impact to the price.</p> Signup and view all the answers

<p>Cash, most stocks, money market instruments, and government bonds.</p> Signup and view all the answers

<p>A gift card is a restricted monetary equivalent issued by retailers or banks to be used as an alternative to a non-monetary gift.</p> Signup and view all the answers

<p>Prepaid cards, gift cards, and gift certificates cannot expire within five years of activation unless clearly disclosed.</p> Signup and view all the answers

<p>The amount of an individual's income that is left for spending, investing, or saving after taxes and personal necessities have been paid.</p> Signup and view all the answers

<p>A certificate that allows the stated payee to receive cash on-demand, usually issued by governments and banking institutions.</p> Signup and view all the answers

<p>Its value is based on what can be exchanged for it; money has value as long as others believe it can be exchanged for goods and services.</p> Signup and view all the answers

<p>The second-best alternative value that must be given up when scarce resources are used for one purpose instead of another.</p> Signup and view all the answers

<p>Those on fixed incomes, such as retired people.</p> Signup and view all the answers

<p>Borrowers and producers.</p> Signup and view all the answers

<p>The United States Department of the Treasury is responsible for issuing all Treasury bonds, notes, and bills.</p> Signup and view all the answers

<p>Put money into savings each month as if it were a bill.</p> Signup and view all the answers

<p>A low-risk investment sold by financial institutions, suitable for cash you don't need for months or years.</p> Signup and view all the answers

<p>A simplified way to determine how long an investment will take to double, by dividing 72 by the annual rate of return.</p> Signup and view all the answers

<p>It involves reviewing bank statements and transactions to ensure accuracy.</p> Signup and view all the answers

<p>Report to creditors and credit reporting agencies and watch your credit report carefully.</p> Signup and view all the answers

<p>Loans that give unfair and abusive terms to borrowers, with hidden fees and high-interest rates.</p> Signup and view all the answers

<p>An asset pledged by a borrower to secure a loan, which can be seized if the loan isn't repaid.</p> Signup and view all the answers

<p>Higher risk generally results in a higher interest rate, while lower risk leads to a lower rate.</p> Signup and view all the answers

<p>A higher deductible typically results in lower premiums for insurance coverage.</p> Signup and view all the answers

<p>Collision insurance is typically terminated when the insured no longer wants or needs it.</p> Signup and view all the answers