What Is Our Baseline Understanding Of Personal Finance? Jumpstart Survey

1. What Is Our Baseline Understanding Of Personal Finance? Jumpstart Survey

2. Let’s test to see if your remotes are working: • First turn your remote on by holding down the Menu key • It should find the net • Now select a C response by scrolling across with the arrows at the top (or by pressing the 3 button) • Then hit the double arrow key to record your response

3. Mutual funds are: a) An investment portfolio managed by the investor b) An investment that holds a wide range of different investment instruments, providing diversification c) Usually less risky than investing in a money market d) Guaranteed to increase in value

4. Which of the following is NOT true about the Dow Jones Average? a) It is an average of 30 very large companies b) It is a reasonably good representation of how the market is doing c) If the index is 10,400, you can buy one share of each company for a total of $10,400 d) All of the above are true

5. Which of the following is true about growth stocks? • They pay higher than average dividends • Their prices are likely to be less volatile than most stocks • The have lower than average potential for capital gains • They have higher than average potential for price appreciation

6. Which of the following is true about Credit Reports? • They are a 3 digit number which indicates your creditworthiness and ability to pay your debts • You must always pay to receive a credit report • You are eligible to receive one free credit report per year from each of the three credit reporting companies • If you declare bankruptcy, it does not appear on your credit report

7. Which of the following is true about bonds? • The only way to make money on bonds is through interest payments. • Bonds pay interest as well as dividends. • The price of a bond remains the same throughout the term of the bond. • When interest rates in an economy increase, the price of bonds go down.

8. Which of the following is NOT true about credit unions? • They tend to charge higher interest rates on loans than traditional banks. • They tend to pay higher interest rates on CDs and other savings accounts than traditional banks. • They are owned by their members who are usually members of a union. • They are not-for-profit institutions.

9. All other things being equal, you would rather that the interest on your savings account be compounded: • Daily • Monthly • Quarterly • Annually

10. The Federal Reserve System (or Fed) is responsible for? • Regulating the money supply • Setting bank reserve requirements • Supplying paper currency • All of the above

11. The Federal Deposit Insurance Corporation (FDIC) insures commercial bank accounts for up to? • $100,000 • $200,000 • $250,000 • $150,000

12. The Securities and Exchange Commission (SEC) was formed to? • Help people with their tax reporting • Prevent accounting fraud • Provide for the defense security of our country • Act as an agent for exchanging foreign currency

13. The Consumer Financial Protection Bureau (CFPB) is responsible for overseeing consumer transactions with? • Banks • Credit Unions • Payday Lenders • All of the above

14. If you need to cash your certificate of deposit (CD) prior to its maturity date: • You lose the full value of your CD • You will not be charged a penalty if you pay it back within 30 days • You will lose interest and may be subject to a penalty fee • None of the above

15. Where can you go to get a loan? • Banks or Credit Unions • Finance Companies • Pawnshops or Payday Lenders • All of the above

16. Which institutions charge the highest interest rates on loans? • Pawnshops • Payday lenders • Finance companies • tax preparers

17. The new credit card regulations allow consumers to opt in for overdraft protection. This means? • No penalties for going over your credit limit • You can never go over your credit limit • You can go over your credit limit • None of the above

18. The time value of money means? • The current worth of future sums of money • How many times you forget to save money • How many years till retirement • How long money can be used before it needs to be replaced

19. Which type of investment offers more liquidity? • One year CD • One year treasury bill • Savings account • 5 year adjustable rate mortgage

20. According to the rule of 72 how many years will it take for a $100 investment to double assuming a 9% interest rate? • 10 • 6 • 8 • 9

21. Why do you need to reconcile a checking account? • To prevent identity theft • You don’t need to reconcile a checking account • To match your check register to the bank statement • You like math

22. If you default on your student loan? • The federal and state government can withold any income tax refunds due you • The government can garnish your wages • Your credit score will decline • All of the above

23. Tax anticipation loans are? • Loans to help cover the cost of taxes due • Loans in anticipation of tax refunds • Loans to cover payroll taxes • None of the above

24. Buying a treasury bill (T-bill) is best for investors who are looking for? • a place to invest between $100-$500 • a secure, low risk investment • a higher yield on their investment than corporate bonds offer • an investment that matures in 10-30 years

25. Which of the following best describes the primary sources of income for most people age 20-35? • Dividends and interest • Salaries, wages, tips • Profits from business • Rents

26. __________ is access to funds to cover any short-term cash deficiencies. • cash management • money management • Credit management • Liquidity

27. The purpose of the tax form W-4 is: • A form used to file annual income tax returns • A form that reports an employee's annual wages and the amount of taxes withheld from his or her paycheck. • A form used by your employer to withhold the proper amount of federal income tax from your paycheck • All of the above

28. Regarding the federal income tax withholding tables, the amount of each employee's earnings withheld is affected by: • the age of the employee • the number of exemptions claimed • the number of years working for the company • all of these

29. If you give something up as a result of making a decision, you are incurring a(n): • net cost • Liquidity problem • Opportunity cost • Financing cost

30. Inflation can cause difficulty in many ways. Which group would have the greatest problem during periods of high inflation that last several years? • Older, working couples saving for retirement • Young working couples with children • Older people living on fixed retirement income • Young couples with no children who both work

31. The U.S. Treasury is responsible for: • Issuing all Treasury bonds, notes and bills • Collection of taxes and enforcement of tax laws (through the IRS) • Overseeing U.S. banks • All of the above

32. If your income exceeds the amount that you wish to spend, you should __________ your investments or __________ loans. a) reduce; repay existing b) increase; repay existing c) increase; obtain more d) reduce; obtain more

33. Which of the following "backs" the value of money in the United States?  A. The gold stored in the Federal Reserve Bank of New York B. The acceptability of it as a medium of exchange C. The willingness of foreign government to hold U.S. dollars D. The size of the budget surplus in the U.S. government.

34. To keep high inflation from eroding the value of money, monetary authorities in the United States:  A. Create token money that is less than its intrinsic value B. Make paper money legal tender for the payment of debt C. Establish insurance on checkable deposit accounts D. Control the supply of money in the economy

35. Which of the following is not true? • When a company does an IPO, it is going public • When a company goes public those shares are first sold in a secondary market • An IPO enables companies to generate money for the company • Once a company goes public they must report their financial results to the public

36. If a person has $450,000 in liabilities and $700,000 in assets, what is their net worth? • - $250,000 • $250,000 • $450,000 • $700,000

37. In which of the following retirement plans would you have money taken from each paycheck as specified by you? • Roth Individual Retirement Account (IRA) • Traditional IRA • 401K plan • Social Security

38. In which of the following retirement plans is the money you contribute placed in a pool for the benefit of many individuals rather than in a plan specifically for you? • Roth Individual Retirement Account (IRA) • Traditional IRA • 401K plan • Social Security

39. If a person’s house could be sold for $500,000 and they currently owe $300,000 on their mortgage, what is the equity they have in the house? • Nothing • $200,000 • $300,000 • $500,000

40. Maria worked her way through college earning $20,000 per year. After graduation, her first job pays $40,000. The total dollar amount Maria will have to pay in Federal Income taxes in her new job will: a) Stay the same as when she was in college. b) Be lower than when she was in college. c) Double, at least, from when she was in college. d) Go up a little from when she was in college.

41. Why do you need to reconcile a checking account? • To prevent identity theft • You don’t need to reconcile a checking account • To match your check register to the bank statement • You like math

42. If you default on your student loan? • The federal and state government can withhold any income tax refunds due you • The government can garnish your wages • Your credit score will decline • All of the above

43. To keep high inflation from eroding the value of money, monetary authorities in the United States:  A. Create token money that is less than its intrinsic value B. Make paper money legal tender for the payment of debt C. Establish insurance on checkable deposit accounts D. Control the supply of money in the economy

44. What is a cash loan from a credit card that often has a significantly higher interest rate: A. Bank Loan B. Cash Advance C. Credit Card Loan D. Credit Advance

45. Which act regulates what companies can advertise and say about the benefits of their loans or services and what information must be disclosed? A. Credit CARD Act B. Fair Credit Reporting Act C. Truth in Lending Act D. Credit Repair Organizations Act

46. How does the degree of risk influence the interest rate charged for a credit card? A. Higher risk, higher rate B. Higher risk, lower rate C. Lower risk, higher rate D. No influence, everyone gets the same rate

47. Your debt-to-credit ratio compares: A. how much you owe with the amount of credit available to you B. the average age of your accounts C. the mix of different categories of credit you have D. new credit inquiries

48. Who should you are a victim of identity theft, who should you contact? A. FDIC B. FDA C. FTC D. FBI

49. Which of the following is NOT a characteristic of predatory lending? A. Higher rates than the borrower qualifies for B. Excess or hidden fees in the amount financed C. Inadequate disclosure of true costs and risks D. Loan terms or structures that make it possible to reduce or pay indebtedness

50. Which of the following is NOT an example of a loan backed by collateral? A. Mortgage B. Car Loan C. Student Loan D. Secured Credit Card