Personal Finance Final Exam

Which is a good financial reason for buying a used car instead of a new one?

a) The interest amount paid on a car loan is the same if the vehicle is new or old.

b) Payments remind people to take good care of their vehicles.

c) Styles change and buyers may want to buy another new car soon.

d) A new car quickly loses its initial value, but the loan payments will stay the same.

d

Which type of expense can occur on a regular date, for a standard amount?

a) Recurring

b) Whammy

c) Non-Recurring

d) Fixed

d

Month after month, Jessica is overspending on her dining-out budget and is decreasing her savings account balance as a result. Which action would be the best possible first step to solving this issue?

a) Write a new lease so she is paying 25% less in rent each month.

b) Quit her job so she can look for one that pays more.

c) Stop paying her credit card bill and put the money into savings.

d) Start packing her lunch from home every day instead of dining out.

d

Which type of expense may only happen once or twice a year and can be challenging for people trying to get on a budget?

a) Non-Recurring

b) Fixed

c) Whammy

d) Recurring

a

What action corresponds to the advice "Pay yourself first?"

a)Wait until the end of the month to determine how much you have leftover to save.

b)Spend your regular paycheck on needs and wants but funnel any extra money into saving.

c) Become self-employed so you're paying yourself instead of being paid by an employer.

d) Set aside a fraction of your paycheck into a savings account before you start spending.

d

Which of these boxes of cereal has the LOWEST unit price?

a) Cereal C, which costs $4.00 for a 16 oz. box.

b) Cereal B, which costs $5.00 for a 32 oz. box.

c) Cereal A, which costs $3.20 for a 16 oz. box.

d) Cereal D, which costs $4.50 for an 8 oz box.

b

Janine is considering what auto costs she is going to have after buying a new car. She has budgeted enough money for the monthly auto loan payment, fuel, and auto insurance. Has Janine factored in all of the costs associated with car ownership?

a) No, she needs to factor in additional costs such as maintenance, car registration and car taxes.

b) Yes, these are the three costs she should expect to pay once she is a car owner.

c) No, she does not need to include the cost of auto insurance as it is included in her auto loan payment.

d) No, she does not need to include the cost of fuel as it is covered under her auto insurance policy.

a

Haley wants to live in an area where she can get around easier without owning a car. What type of setting would most likely meet her requirement?

a) Urban

b) Rural

c) Country

d) Suburban

a

Which statement accurately describes how to distribute your take-home pay with the 50/20/30 Rule?

a) 50% on savings, 20% on wants, and 30% on needs

b)50% needs, 20% on savings, and 30% on wants

c) 50% on savings, 20% on needs, and 30% on wants

d) 50% on wants, 20% on savings, and 30% on needs

b

When renting an apartment, why is it important to have a written lease?

a) A lease clearly states the apartment costs and expectations for living there.

b) Without a lease, a renter won't know how much to budget for rent, food, insurance, or transportation.

c) It is against the law to live somewhere without a lease.

d) Signing a lease provides you with free or discounted renters insurance.

a

Which statement best describes a savings account?

Question 1Answer

a.

This account offers a convenient way to pay bills and access cash from an ATM.

b.

This account typically allows an unlimited number of transactions per month.

c.

This account is automatically debited when you use a debit card.

d.

This account pays you interest on money you have put away for later to help your money grow.

a

Which statement about ATM cards is correct?

Question 2Answer

a.

Some banks may offer a refund for a specific amount of out-of-network ATM providers’ charges.

b.

All banks offer free ATM access to out-of-network providers.

c.

Banks are required to reimburse for all ATM fees.

d.

ATM fees are based on a percentage of your withdrawal amount, so it is best to withdraw small amounts of money.

a

Which statement best describes a checking account?

Question 3Answer

a.

This account offers a convenient way to pay bills and access cash from an ATM .

b.

This account offers high interest rates.

c.

This account is an excellent way to save money.

d.

This account allows you to borrow money from the bank.

a

Maya had $100 starting balance in her checking account. Over the month, she wrote two checks for $40.00 and $38.00. Maya also deposited a $225.00 paycheck and had a debit card purchase of $12.00. What is Maya’s final balance for the month?

Question 4Answer

a.

$235.00

b.

$269.00

c.

-$35.00

d.

$10.00

a

Which of the following is NOT a reason it is important to regularly check your bank statements?

Question 5Answer

a.

To check for any fraudulent charges

b.

To check your balance

c.

To keep the bank from closing the account for lack of activity.

d.

To see if any checks you wrote have been processed

c

Harold is reviewing his checking statement. He sees a debit purchase of $200 for gas and knows that is an error.

Which is the best way that Harold can prove to the bank that the transaction is wrong?

Question 6Answer

a.

Harold can tell the bank that he always puts $20 in his car and show past gas transactions for $20.

b.

Harold can point out that his car can’t hold $200 of gas.

c.

Harold can show the bank his receipt for that gas purchase.

d.

Harold is responsible for all charges; banks are never wrong.

c

The Statement Period on a bank account statement refers to ...

Question 7Answer

a.

the average daily balance for the account.

b.

the deadline for reconciling the bank statement.

c.

the time period for making comments about errors.

d.

the time frame that the statement covers.

d

Which column on a bank statement indicates which transactions added money to the account?

Question 8Answer

a.

Withdrawals

b.

Fees

c.

Debits

d.

Deposits

d

Which of these is likely NOT to be found on a bank statement?

Question 9Answer

a.

Account number

b.

Account holder’s Social Security number

c.

Date of transactions

d.

Bank/credit union name

b

Marise chose a credit union instead of a bank because the bank was going to charge her $5 a month just to have a checking account with them.

What is the name for this type of fee?

Question 10Answer

a.

Paper copy of statement fee

b.

ATM charge

c.

Monthly service fee

d.

Minimum balance fee

c

Declan invested $1000 in a savings account earning 2% simple interest. His brother Finn invested $1000 in a savings account earning 2% compound interest. They invest the money for five years.

Who will earn more interest on his account?

Question 11Answer

a.

Neither will earn interest, because savings accounts don’t earn interest.

b.

Declan, because simple interest calculates more.

c.

Finn, because he is earning interest on prior interest.

d.

They will earn the same amount.

c

What kind of fee can you avoid by signing up for electronic statements?

Question 12Answer

a.

Paper copy of statement fee

b.

Overdraft fee

c.

Minimum balance fee

d.

Maintenance fee

a

Which of the following statements is an advantage of online banking?

Question 13Answer

a.

Once you set up online banking, your bank will waive overdraft, ATM, and monthly fees.

b.

Online banking accounts generally have lower interest rates.

c.

You can only shop online if your bank account has online banking features.

d.

By using online banking, you can request transfers, pay bills and automate your savings without visiting the bank branch.

d

Which is a benefit of on-line bill pay?

Question 14Answer

a.

You can receive and pay your bills all through your bank.

b.

Checks are never used.

c.

You must manually send the payment each month.

d.

The fees are usually 10% of the bill amount.

a

Marcus wants access to his tax refund as soon as possible. Which of the following would best help him get his funds faster?

Question 15Answer

a.

Receiving his refund as a prepaid card

b.

Having the IRS direct deposit his refund

c.

Requesting a paper check from the IRS

d.

Rolling the refund into next year's taxes

b

You are at the checkout counter at the local supermarket and use your debit card to pay for your groceries. Where does the money for this purchase come from?

Question 16Answer

a.

It is deducted directly from your checking account.

b.

Your credit card company covers the cost.

c.

Your credit card company provides you with a cash advance to cover the cost.

d.

It is deducted directly from your savings account.

a

A person-to-person payment app could be used in each of the following scenarios EXCEPT...

Question 17Answer

a.

Ahmed's soccer coach pays the team's registration fee for a big tournament, and each player then owes him $35 for their share of the registration fee

b.

Mia pays Town Pizza Co. for a pizza she orders on their website

c.

Tina pays her neighbor $200 for breaking his window with a softball

d.

Rafael writes a check to cover the entire month’s rent, and his roommates Valerie and Carlos pay Rafael for their share of the monthly rent

b

Which of the following transactions will REDUCE your checking account balance immediately?

Question 18Answer

a.

Depositing a check at a local bank branch

b.

Using your debit card to pay for shoes at an athletic supply store

c.

Writing your monthly rent check which you will mail tomorrow

d.

Using your credit card to pay for your school books

b

Hilda wants to split the bill for lunch with her friends, but realizes she left her wallet at home. Which could be the most efficient way to pay her friends?

Question 19Answer

a.

Write out “IOU” and the friends’ names on a napkin

b.

Call her dad and ask him to bring money to the restaurant

c.

Have everyone wait to pay while she runs to the ATM

d.

Use a P2P app

d

With P2P apps, the highest cash-out fees are usually for

Question 20Answer

a.

Cashing to a checking account

b.

Instant transfer

c.

Transfer to family

d.

Standard transfer

b

While some P2P apps allow payments to select online and store merchants, all P2P apps allow payments from an individual to ...

Question 21Answer

a.

utility companies

b.

state departments of revenue

c.

the Internal Revenue Service

d.

other individuals

d

Jase wants to get a loan from his bank to make some home repairs.  He wants to be sure the interest rate is the same throughout the loan term.  Based on that criteria, which type of loan would be best for Jase? 

Question 1Answer

a.

Balloon payment

b.

Variable rate loan

c.

Fixed rate loan

d.

Interest rate of prime rate plus 0.5%

c

Marlon has a great credit score. Marlon’s cousin has no credit history, and has asked Marlon to co-sign a new car loan with him.  Before he agrees to the request, what should Marlon keep in mind if he wants to protect his own credit score?

Question 2Answer

a.

His cousin might end up with a nicer car than Marlon.

b.

If his cousin doesn’t make the payments, it can hurt Marlon’s credit score.

c.

Why should he help his cousin out when Marlon doesn’t even own a car?

d.

Does his cousin have a driver’ license?

b

Kato’s first home loan bill arrived, and the interest rate was 5%. Kato panicked when he got his second month’s bill and the amount due was higher. He then noticed that month’s interest rate was 8%. Based on the changing interest rate, what type of loan does Kato most likely have?

Question 3Answer

a.

Unsecured debt

b.

Fixed rate

c.

Variable rate

d.

Secured debt

c

You are buying a set of radio-controlled cars off a home-shopping network for your nephews’ birthdays.

The network offers a “buy now, pay later” payment option.  Which of the following best describes “buy now, pay later”? 

Question 4Answer

a.

You order the items and pay the delivery person when the package arrives.

b.

You can buy the items now but pay for them whenever works best for you.

c.

Once you order the items, you will get a bill for the entire amount due.

d.

You are financing the purchase price and will be billed in four different statements.

d

Reading through a credit card’s account details, you see the APR for a specific card is set at 9.99% - 23.99%. Which statement is true? 

Question 5Answer

a.

Your APR will be within that range, depending on the strength of your credit history

b.

The APR on credit cards is usually fixed, so it won't be adjusted as long as you are a cardholder

c.

In this case, you want the highest APR in the range because you’ll earn more

d.

When given a range of APRs like this, you can assume most cardholders pay the lowest rate listed

a

When loans are amortized, over time the amount of your monthly payment is applied to interest _____

Question 6Answer

a.

accelerates.

b.

increases.

c.

decreases.

d.

stays flat.

c

Taylor is about to go car shopping, and she has $5000 saved that she can use for a down payment while still having extra cash in her emergency fund. She expects the exact model car she’s looking for to cost $35,000. If her top priority is having the lowest monthly payments possible, which advice should she follow? 

Question 7Answer

a.

Put in $0 for her down payment, and choose a loan with a short-term length.

b.

Put in $5000 for her down payment, and choose a loan with a long-term length.

c.

Put in $2500 for her down payment, and choose a loan with a short-term length.

d.

Put in $3500 for her down payment, and choose a loan with a long-term length.

b

If you are having trouble making auto loan payments and are really following a tight budget, which recommendation below represents the WORST advice? 

Question 8Answer

a.

Stop making payments on some of your debts so you can focus on getting the most expensive or largest debts under control.

b.

Continue making all payments and call your lenders and see if you can negotiate lower monthly payments, lower interest rates, or longer terms.

c.

Explore whether a free or non-profit credit counseling service could help.

d.

Find an extra source of income by taking a second job, working longer hours, or borrowing from family if they can afford to help.

a

All of the following would show up on a credit report EXCEPT... 

Question 9Answer

a.

Salary of your current job

b.

Credit card payment history

c.

Payment history of your car loan

d.

Student loan activity

aa

What is the general timeline to establish your first credit score? 

Question 10Answer

a.

Six months after you first actively use your credit

b.

Once you pay all of your credit balances in full

c.

As soon as you apply for a credit card or loan

d.

Once you turn 18

a

What are the two most important factors in calculating your credit score? 

Question 11Answer

a.

Length of credit history and new credit inquiries

b.

Amounts owed and length of credit history

c.

Payment history and types of accounts

d.

Payment history and total debt

d

Who tracks all of your credit information?

Question 12Answer

a.

Consumer Financial Protection Board (CFPB)

b.

Federal government

c.

Lenders

d.

Credit reporting agencies (Equifax, Experian and TransUnion)

d

How can your credit score impact your financial well-being? 

Question 13Answer

a.

Only consumers with high scores are approved for credit

b.

It generally has no impact on your financial situation

c.

Consumers with low scores get lower interest rates on loans than those with high scores

d.

Your credit score can determine whether you are approved for a loan and what the interest rate on that loan will be

d

Blaire is reviewing her credit report.  Which of these may indicate an issue? 

Question 14Answer

a.

Her payment history is listed.

b.

Her current address is listed.

c.

Accounts she had using her maiden name are listed.

d.

Loan or credit balances that are higher than she anticipates.

d

Which of the following is NOT one of the “big three” credit reporting agencies to contact about credit report errors? 

Question 15Answer

a.

Transunion

b.

Equifinance

c.

Equifax

d.

Experian

b

You find an error on your credit report: Your credit card account indicates that you are 60 days late on your payment, but you have bank records indicating that you have always made on-time payments. What is NOT a step to correcting the error?

Question 16Answer

a.

Gather any records to prove when you paid.

b.

Wait a few weeks to see if it gets resolved.

c.

Contact the credit card company to have them fix it.

d.

Contact the credit reporting agency.

b

The average APR for a payday loan is

Question 17Answer

a.

a lot higher than for a credit card

b.

a lot less than a credit card

c.

the same as for a credit card

d.

a little higher than a credit card

a

Payday loans typically are marketed to 

Question 18Answer

a.

people with excellent credit.

b.

people with steady income.

c.

people who are financially secure but need a small loan.

d.

people with extreme financial issues.

d

Heather realized she has taken out too much debt and it has started to negatively impact her ability to budget. She has decided to pay off this debt in full as soon as possible. All of the following would be beneficial strategies EXCEPT…

Question 19Answer

a.

Reducing spending by canceling some of her streaming subscriptions

b.

Taking extra shifts at work to increase her income

c.

Making more than the minimum required payment on her debt

d.

Applying for another credit card to use in case she runs out of cash paying off her debt

d

Which of the following could have a NEGATIVE impact on your credit score if done in a short period of time?

Question 20Answer

a.

Paying down balances on your credit card accounts

b.

Applying for multiple credit cards

c.

Paying your bills on-time

d.

Decreasing your utilization of credit

b

Which of these is a way someone can make money from investing in a stock?

Question 1Answer

a.

They sell the stock for a lower price than what they bought it for

b.

They receive dividends or they sell the stock at a higher price than what they bought it for

c.

They sell the stock for the same price they bought it for

d.

The stock loses value but the overall market experiences a positive return

b

What is the Rule of 72?

Question 2Answer

a.

An IRS regulation that you pay more taxes on investments if you retire before age 72.

b.

A formula for estimating how long it will take an investment earning compound interest to double.

c.

A Social Security rule that you must retire at 72 or forfeit any rights to Social Security benefits.

d.

A formula for determining the money needed to retire at age 72.

b

A mutual fund is a 

Question 3Answer

a.

bond that a group of investors manage.

b.

stock that a group of economists mutually agree is a solid investment.

c.

group-funding opportunity for new products.

d.

diverse group of investments, funded by a group of people and managed by a professional.

d

A commonly used strategy to minimize investing risk is...

Question 4Answer

a.

Investing only when a stock's value is rising.

b.

Choosing a diverse selection of investment vehicles.

c.

Hiring an investment manager who promises to provide the largest returns.

d.

Investing in only one company.

b

Why is it important for you to understand your risk tolerance before you start investing?

Question 5Answer

a.

It’s recommended that people with a low risk tolerance shouldn’t invest at all.

b.

It helps you decide if you want to participate in your employer’s match program for your 401(k).

c.

You should tailor your investment portfolio so that it assumes an amount of risk you are comfortable with.

d.

If you have a high risk tolerance, you may be eligible for lower fees since you won’t care if your portfolio drastically loses value.

c

Why is diversification a recommended investment strategy?

Question 6Answer

a.

If you tell your fund manager to use diversification, they’ll charge you lower fees.

b.

Investing in a diversified portfolio guarantees that you won’t lose money with your investments.

c.

Diversifying your portfolio helps reduce risk.

d.

If you diversify your portfolio, you will definitely earn a high return.

c

All of the following should be considered when creating your investing strategy EXCEPT...

Question 7Answer

a.

the amount of capital you have available to invest.

b.

your risk tolerance.

c.

the amount of time your money will be invested before you start drawing from it.

d.

your credit score.

d

A savings account is useful for all of the following purposes EXCEPT…

Question 8Answer

a.

Building an emergency fund

b.

Putting aside money for retirement

c.

Funding a future vacation

d.

Saving for a new car

b

Jacob invests a portion of his income in a traditional IRA. He plans on withdrawing the funds when he turns 60 years old. Which is true about what will happen when Jacob withdraws the funds from his IRA?

Question 9Answer

a.

Jacob will be penalized 10% for withdrawing before age 65.

b.

The money he withdraws will be taxed at the tax rate that is current at the time of withdrawal.

c.

The money Jacob withdraws will be taxed at the rate in effect when he first invested the money.

d.

The money will be withdrawn tax-free.

b

Which is NOT true about Social Security retirement benefits?

Question 10Answer

a.

Social Security benefits are anticipated to stop in 2034.

b.

The Social Security trust fund is predicted to run out in 2034.

c.

There is a monthly cap on retirement payments.

d.

With a shift in the number of people collecting benefits, future generations might receive less monthly benefits.

a

Which statement best describes the Social Security retirement program?

Question 11Answer

a.

It is managed by the federal government but funded by employees and employers.

b.

Social Security provides guaranteed retirement benefits for anyone who has been employed for at least one year.

c.

Social Security is a privately managed bond program.

d.

It is a retirement program where workers can choose to join, or opt-out for a private program instead.

a

In 2019, the maximum allowed Social Security monthly retirement benefit was approximately…

Question 12Answer

a.z

$1,800.

b.

$1,500.

c.

$3,500.

d.

$2,900.

d

Which statement is true regarding contributing to a Roth IRA?

Question 13Answer

a.

Your annual earnings may affect the maximum amount you can contribute.

b.

You must have a 401(k) account before opening up a Roth IRA.

c.

You must be over the age of 25 to open up a Roth IRA.

d.

You must have held your current job for at least 1 year.

a

What is one main difference between a 401(k) and a Roth IRA?

Question 14Answer

a.

You contribute post-tax money to a 401(k) and pre-tax money to a Roth IRA.

b.

A 401(k) is something you can sign up for individually; a Roth IRA is something your employer offers.

c.

You contribute pre-tax money to a 401(k) and post-tax money to a Roth IRA.

d.

A 401(k) does not offer profit sharing options but Roth IRAs do.

c

How can you invest for retirement if your employer does not offer a 401(k) plan?

Question 15Answer

a.

You simply wouldn’t be able to invest.

b.

Open an Individual Retirement Account.

c.

Open a 401(k) from a relative’s employer.

d.

Open a 501(c)(3) instead.

b

Sela and Buju are making their wills. They specify that if they both die, Sela’s sister and brother-in-law will become the guardians to Sela and Buju’s young children. However, Sela’s sister and her husband have a grown daughter who is greedy, and Sela and Buju are worried that she would try to somehow access money they leave for their children’s care. What can Sela and Buju do to safeguard the money for their children?

Question 16Answer

a.

Establish a trust for their children and have a fiduciary control who accesses the money until the children are grown.

b.

Leave it up to the sister and brother-in-law to keep their greedy daughter away from the money.

c.

Donate the funds to charity instead.

d.

There is no way to control the money. They should find another guardian.

a

A document that gives instructions on how assets should be distributed after person’s death is called a

Question 17Answer

a.

will.

b.

charitable contribution.

c.

trust.

d.

fiduciary.

a

What is a key reason for estate planning?

Question 18Answer

a.

It keeps everyone guessing about if they get any money or not.

b.

Estate planning eliminates all tax expenses.

c.

It encourages better management of property assets.

d.

The individual directs where the assets go, instead of a court deciding.

d

Why is it important to understand how businesses use dark patterns?

Question 1Answer

Dark patterns can cause eye strain, which can add to medical expenses.

Dark patterns are intended to trick users into doing things they might not want to do, but which benefit the business instead.

For people who are not good at comparison shopping, dark patterns walk them through comparing multiple items.

Dark patterns are designed to help the public make wise shopping decisions.Why is it important to understand how businesses use dark patterns?

Question 1Answer

Dark patterns can cause eye strain, which can add to medical expenses.

Dark patterns are intended to trick users into doing things they might not want to do, but which benefit the business instead.

For people who are not good at comparison shopping, dark patterns walk them through comparing multiple items.

Dark patterns are designed to help the public make wise shopping decisions.

Why is it important to understand how businesses use dark patterns?

Question 1Answer

Dark patterns can cause eye strain, which can add to medical expenses.

Dark patterns are intended to trick users into doing things they might not want to do, but which benefit the business instead.

For people who are not good at comparison shopping, dark patterns walk them through comparing multiple items.

Dark patterns are designed to help the public make wise shopping decisions.

b

Zasia’s boyfriend’s sister needed to go to the doctor but had no insurance. She asked Zasia if she could use her insurance card to save some money. Zasia felt bad for her and agreed to let her use the insurance card. Months later, without Zasia knowing it, the boyfriend’s sister was still using the insurance info and had also shared it with some of her friends to use, too.

Which of the following could be a negative financial consequence for Zasia?

Question 2Answer

Zasia can have her tax refunds intercepted.

Random friends of friends will start asking Zasia for money.

People at the insurance company will be horrified at all of “Zasia’s” medical problems.

Zasia can be left liable for medical payments.

d

Which of the following is an important financial reason to regularly monitor subscription and subscription fees?

Question 3Answer

These are a source of identity theft.

It’s important to see which ones media influencers approve of.

Companies make recurring revenue from subscription charges, and people often forget to cancel ones they don’t use.

You’ll know which ones to follow on social media.

c

Which of the following is a non-monetary reason to prevent identity theft?

Question 4Answer

Victims might not get reimbursed for losses.

Victims might have money taken out of their accounts.

Most people lose over $100 in data breaches.

It can take a lot of time for victims to prove their real identity and straighten out fraudulent charges.

d

Why is it important to be aware of “drip pricing”?

Question 5Answer

Drip pricing can make your water bills higher without you being aware of it.

With drip pricing, sellers post a low price and then add hidden fees later in the buying process, which costs you more money.

Drip pricing is when you have a subscription service, and the fees add up over a year.

Drip pricing can increase clothing costs, because clothes wear out more if you don’t hang them up to drip dry.

b

Three days ago, Niko used his credit card to buy a new jacket he found through a social media ad. He still has not gotten a receipt of payment or confirmation email regarding the purchase and he’s starting to suspect he was scammed. What is the next BEST thing Niko should do?

Question 6Answer

Try to contact the vendor to see if they can reverse the transaction.

Wait to see if the transaction shows up on his next credit card statement.

Report the fraudulent charge to his bank and ask them to reverse the transaction.

Wait for his bank to identify the fraudulent charge and reach out to him within 7 days of the purchase.

c

Tara is looking for a new winter coat and has found two in her price range that she really likes. She is unfamiliar with the brands, so she reads customer reviews to determine how long the coats will last. Which term best describes what she is researching about coats?

Question 7Answer

Quantity

Longevity

Brand Reputation

Return Policy

b

The first step to defeat hidden fees is to _____.

Question 8Answer

complain online about it.

stop the sale and start over.

notice the fees are there.

contact your congressional representatives.

c

Your friend Hamlin wants to watch the new season of his favorite show, so he signs up for a free trial of the streaming service it is on. What advice would you give Hamlin about signing up for subscriptions?

Question 9Answer

“The more subscriptions you have, the easier life becomes, so always sign up for more.”

“Set multiple reminders and alarms to cancel the service or you are very likely to get busy and forget.”

“Always set up your autopay so you don’t have to think about paying your subscriptions.”

“Paying month to month for subscriptions is the cheapest way to access the content.”

b

Bella is comparison-shopping boxes of granola bars. She notices the price per granola bar is cheaper if she buys the box of 48 for $8, instead of the box of 24 for $5. What factor is she comparing?

Question 10Answer

Longevity

Brand Reputation

Quantity

Return Policy

c

David wants to start using social media more mindfully. Which of the following is a good next step for him to do so?

Question 11Answer

Have a friend or family member frequently change his social media account passwords to decrease how often he logs in.

Delete all of his social media apps immediately to avoid spending.

Curate his feed so that he sees fewer posts from friends, family, and influencers who make him feel like he needs to spend more.

Schedule time for him to binge use social media three times a year. Otherwise, he stays logged out of his accounts.

c

Which of the following is an example of the Roach Motel dark pattern?

Question 12Answer

A website automatically signs you up for a paid subscription when you create an account but there is no easy way to cancel it.

A hotel reservation site tells you the number of deals you just missed by failing to book a room faster.

A banner ad has a fake speck of dust to trick users to click on it when they try to swipe the dust away.

A mobile app uses green buttons throughout to select NO but then suddenly changes it to select YES.

a

Which is NOT a method that social media uses to influence consumers to buy?

Question 13Answer

Constant “nudges” (like pop-ups) that encourage people to buy.

Persuasive product review videos.

Blurring out product names in videos.

Influencers posting about products.

c

An influencer is…

Question 14Answer

Someone who agrees to follow you back if you follow them on social media.

A person who can convince someone to buy a product or service by promoting it on social media.

Any type of media (ad, article, picture) that convinces you to buy a product or service.

An advertising agency that works with various organizations to promote their products on social media.

b

Which of the following is NOT a likely result of a product going viral on TikTok?

Question 15Answer

Sellers begin offering huge price discounts.

Manufacturers run out of the product.

More consumers buy it.

A song rises in Billboard ratings.

a

Which of the following is an example of protecting financial information against technology-based attacks?

Question 16Answer

Malaysia updates her passwords regularly by logging into the sites she uses and using the “change my password” option on those websites.

Braden is using his dad’s computer to do research for school. He is on a news site and keeps getting a pop-up on the screen stating,“Security system has detected suspicious activity - click HERE now to stop attempt”. Braden doesn’t want to mess up his dad’s computer, so he clicks the link in the pop-up.

Hasan got an email from “[e-mail]”, warning him of a data breach. The email contains an attachment and directions to open the form for more info on how to protect his identity. Hasan opens the attachment.

Jacinta gets a text from an unknown number, but it says it’s from her best friend, Mazee. It says that Mazee is at a restaurant and realized her wallet is at home, and can Jacinta send her money by a cash app to pay the bill? Jacinta sends $20 using the URL (link) in the text.

a

Sofia receives a text message from her bank. All of the following indicate that the text may actually be a scam EXCEPT…

Question 17Answer

The text message asks her to call the number that is on the back of her debit card.

The text message includes a link that starts with “http”.

The text message indicates that she will lose a significant amount of money if she does not respond within 1 hour.

The text message has a few spelling errors in the body of the text.

a

Which statement is TRUE about child identity theft?

Question 18Answer

Child identity theft occurs when a child shops online without parent permission.

Children are not in danger of a data breach.

Child identity theft often goes undiscovered for many years .

Children don’t have any assets, so they are not usually a target for identity theft.

c

Which of the following is TRUE about scams?

Question 19Answer

Young people don’t have to worry about being targeted for scams unless they have a bank account.

You are guaranteed to get your money back from a scam by filing a claim with your local police department.

There are a number of red flags you can be aware of that can help you avoid being scammed.

Scams today most commonly occur through paper mail you receive.

c

Which of the following is TRUE about recent trends in identity theft?

Question 20Answer

Most cases involve the unauthorized use of credit cards or bank accounts.

The number of identity theft reports has significantly decreased over the past decade.

Most cases of identity theft result in a large dollar amount lost.

Young people are never victims of identity theft.

a

Why is it important for people to check their free credit reports at least once each year?

Question 1Answer

To test if their bank has a zero-liability policy.

To be proactive in preventing identity theft.

To check for any mistakes, fraudulent accounts, etc. so that they can catch errors early on.

To reduce involvement in Ponzi schemes.

c

Jarvis enrolling in a 30-day streaming subscription for $25 a month. As he was finalizing payment, a box popped up with this message, “Are you SURE you don’t want to join for a year for $20 a month?” To purchase the month-to-month plan instead of the annual plan, Jarvis had to click a button stating, “No, I don’t want to save money.”

Which type of dark pattern did the streaming service use with Jarvis?

Question 2Answer

Hidden Fees

Roach Motel

Confirm Shaming

Sneak into Baskets

c

Why do companies sometimes add extra fees at the end of the buying process?

Question 3Answer

People are likely to pay the fees anyway at that point .

This is an example of a “roach motel” scheme.

The companies aren’t very good at Web site building.

Those fees are always accidental and never intentional.

a

When shopping online, how does checking what is in your cart help you to avoid the “sneak into basket” scam?

Question 4Answer

It will give you a chance to opt-out of future emails.

It makes sure you used the right credit card.

It can help you catch retailers automatically signing you up for additional items.

It will prevent hackers from putting their items in your cart

c

Which of the following is NOT true about comparison shopping?

Question 5Answer

It can help you make sure what you buy meets a variety of needs.

It can include comparing a variety of factors that are important to you.

It can help you be confident you’re getting a good deal.

It should focus only on price.

d

Sean wants to buy a bookshelf for his room. Which of the following factors should he be LEAST concerned about when comparison shopping?

Question 6Answer

The price of the bookshelf.

Reviews left by other consumers.

The quality of the bookshelf.

When the bookshelf was made.

d

In which of the following scenarios does it make the MOST sense for the person to comparison shop?

Question 7Answer

Esperanza’s old phone broke and she is looking to buy a new one.

Maxine is at her local grocery store and decides to buy a pack of gum at the register.

Vivek is stopping by a cafe before school to get coffee and a bagel.

Nghia is on his way to a friend’s birthday party and needs to purchase a card.

a

aBart’s cousin is trying to convince him to invest in cryptocurrency. The cousin shows him a video about investing in cryptocurrency, which had two million “likes” on a video-sharing platform. He also points out the many comments where people describe making a lot of money. Which factor is the cousin using to influence Bart to invest his money?

Question 8Answer

Social Proof

Commitment and Consistency

Reciprocity

Scarcity

a

All of the following are ways to use social media more mindfully EXCEPT…

Question 9Answer

Make a budget and use it to track and adjust your spending from social media.

Unfollow or mute accounts that encourage you to spend more money than you’d like.

Delay the act of purchasing by adding something you’d like to buy from social media to a “wish list”.

Check your social media accounts frequently throughout the day.

d

Which best describes why a pyramid scheme is an investment scam?

Question 10Answer

Pyramid schemes depend on recruiting new people; when there are no more new investors, the money runs out.

Pyramid schemes involve fraudsters hacking into social media, bank, and email accounts.

Pyramid schemes are a type of scam in which a company sells you products that you never actually receive.

Pyramid schemes require investing in stocks and bonds.

a