Planning 10 Name:________________________ Block:______

Financial Literacy Exam

I. Multiple Choice- please circle the letter which represents the best answer.

1. This occurs when prices of goods and services increase.

a. Deflation.
b. Inflation.
c. Ablation.
d. Multiplier Effect.

2. With regards to a savings account, paying yourself first means saving the first
_______% of your income after deductions.
a. Five.
b. Ten.
c. Fifteen.
d. Twenty.

3. Which of the following is not true in regards to taxes?

a. Taxes are a compulsory payment.
b. Taxes raise revenue for governments.
c. Taxes are collected at three government levels.
d. Taxes may only be collected directly.

4. Which of the following is true of the Goods and Services Tax (GST)?
a. It is a provincial tax.
b. It is a territorial tax.
c. It is a federal tax.
d. It is a provincial/federal tax.
e. It is an unfair tax

5. Property taxes are paid to this level of government.

a. Municipal.
b. Provincial.
c. Territorial.
d. Federal.

6. Customs duties must be paid on these types of goods.

a. Local goods.
b. Domestic goods.
c. Imported goods.
d. Excise goods.
e. Federal goods
7. With regards to insurance, this is the monthly________that is paid monthly or yearly.
a. Deductible.
b. Premium.
c. Compensation.
d. Replacement.

8. This is a type of loan, which is paid over a set period of time.

a. Term.
b. Demand.
c. Consumer.
d. None of the above answers are correct.

9. Which of the following best defines liquidity?

a. A type of loan made only for those customers who are financially secure.
b. The exchange of money for products or services.
c. The process of turning assets into cash quickly.
d. A type of investment which guarantees a minimum yield of two percent.

10. Which of the following has the highest liquidity?

a. House
b. Bonds.
c. Older car.
d. Chequing Account

11. This is another word for multiple stocks in grouped funds.

a. GICs.
b. Shares.
c. Term Deposits.
d. Mutual Funds.

12. This is when you spread your money over a variety of investments.
a. Risk.
b. Diversification.
c. Yield.
d. Containerization.

13. This is the uncertainty about the results of an expected return.

a. Risk.
b. Diversification.
c. Yield.
d. Containerizatioin.

14. Which of the following is not a form of credit?

a. Mortgage.
b. Stocks.
c. Charge Card.
d. Line of Credit.
15. In which example is the most interest charged on a credit card?
a. A phone transaction.
b. A gasoline purchase.
c. An ATM withdrawal, cashback.
d. A point of purchase sale.

16. If expenses were to exceed income on a spending plan, what would be a financially smart
solution?
a. decrease deductions
b. increase expenses
c. decrease spending
d. increase taxes
e. none of the above

17. Which of the following best describes the term minimum wage?
a. a fixed yearly payment paid monthly
b. a payment made to employees for working extra hours
c. the lowest amount legally a firm can pay its employees
d. a payment for reaching an employee target.

18. The rule of 72 states that in order to discover how long it takes an investment to double.
a. you must divide the interest rate per period by 72
b. you must divide 72 by the interest rate per period
c. compound interest is divided by 72
d. the number 72 is divided by simple interest
e. none of the above

19. Which is not a useful criterion for students shopping for a credit card?
a. APR
b. Grace period
c. Balance computation method
d. Equity balance
e. Any associated fees

20. What is a SIN?

a. It is a number used by provincial government for ID purposes
b. Used by your city for census information
c. Used by schools to identify you for tax purposes
d. Needed in order to claim a tuition refund
e. None of the above

21. An insurance premium is:

a. Used to pay an injured party
b. Deducted from house insurance
c. A payment the insured makes in exchange for compensation
d. A payment the insured makes for any losses sustained
e. None of the above
ii. True or False.

1. _____ The decrease in inflation is known as reflation.

2. _____ A Canada Savings Bond has a high risk and high expected return.
3. _____ Compound interest is the interest paid on the initial deposit.
4. _____ Only banks are regulated by the Canada Deposit Insurance Corporation
5. _____ Banks are run as non-profit organizations.
6. _____ In order for a business to operate it must have a business license.
7. _____ Travel insurance only covers travel within Canada.
8. _____ Credit card interest is low compared to line of credit interest.
9. _____ Wants should be included in any spending plan.
10. _____ A chequing account helps make paying bills and charting spending easier

iii. Matching

1. _____ A financial institution owned by its members.

2. _____ Allows you to withdraw money even if theres not enough in your account
3. _____ Paying for purchase with borrowed money
4. _____ Another name for hidden taxes
5. _____ An electronic bank teller
6. _____ Insurance coverage from injuries/illness that prevent you from working
7. _____ Insurance coverage in case of accidental death.
8. _____ Insurance which covers valuables in y our home (appliances, clothes, etc.)
9. _____ Insurance which covers extensive damage to your vehicle.
10. _____ This is another word for liabilities.
11. _____ A record of the financial positions of a business at specific date
12. _____ A record of ones personal financial statement within a given month
13. _____ Essentially these are loans to the government
14. _____ A short-term debt security issued by the government
15. _____Units in a pool of money managed by a money manager.

a. Credit Union f. Content k. Balance Sheet

b. Credit Card g. Collisions l. Overdraft
c. ATM h. Debts m. Indirect
d. Disability i. Budget n. Life
e. Bonds j. Mutual funds o. Treasury bill