Wise Practice Test

Start of subset 1

1. Julian is a single recent college graduate who just got his first full-time job. Which of the following
should be his first financial goal?
a. buying a house
b. buying a life insurance policy
c. establishing a fund for emergencies
d. creating a stock portfolio

2. Another term for the dollar amount of your paycheck after taxes and other withholdings is:

a. discretionary income c. net income

b. adjusted gross income d. gross income

3. Patty is selling her car through a newspaper advertisement. When she finds a buyer, she wants a form of
payment which is guaranteed to be good. Which form of payment should she avoid?

a. cash c. cashiers check

b. certified check d. a check

4. A company offers employees direct deposit. The company will still provide the employee with a
statement that lists the employee’s
a. gross pay only
b. net pay only
c. gross pay and the type and amount of deductions
d. gross pay, the type and amount of deductions, and net pay

5. Electricity and food expenditures are:

a. variable expenses that change from one period to another
b. discreet expenses that do not have to be paid monthly
c. fixed expenses that remain the same from one period to another
d. personal expenses for an individual or family

6. Doug wants to buy a car in two months, but does not have enough money. What is the best day for Doug
to get the money he needs?
a. Purchase a certificate of deposit
b. take out a cash loan
c. open a market money account
d. apply for a 30 year mortgage

7. A blank endorsement on a check:

a. has no effect on the check
b. cancels the check
c. creates a check that can be cashed by anyone
d. restricts the use of the check

8. Joan wants to open a checking account and wonders if checking accounts pay interest. How would you
answer her question?
 a. All checking accounts pay interest
b. Some types of checking accounts pay interest
c. Checking accounts never pay interest
d. Checking accounts pay interest if the account balance does not fall below $300.00.

9. Fiat Money​ is:

a. Backed by Gold
b. Restricted to only cash form
c. Backed by the strength and confidence of the government
d. Backed by the UN

10. Gambling, Lottery Winnings, and/or Inheritance are considered:

a. Earned Income
b. Non-Taxable Income
c. Tax Write-Offs
d. Windfall income

11. Identify the background color of a U.S. $5.00 bill.

a. Orange
b. Blue
c. Green
d. Yellow
12. Fiscal Policy has to do with
a. The President
b. Congress
c. Taxes & Spending
d. All of the answer choices

13. The Federal Reserve adjusts interest rates, which mostly affect
a. How much taxes families pay
b. How easy or difficult it is to borrow money
c. The payouts of Social Security to America’s elderly
d. what Congress will spend money on

14. Which of the following statements is usually true about individuals who are financially literate?
a. They have high debt and low savings
b. They understand the basics of personal finance and money management
c. They almost always choose stocks and bonds that increase value
d. They achieve all of their financial goals

15. Which of the following funds Social Security ?

a. Income Taxes
b. FICA taxes
c. Monetary Taxes
d. Fiscal Taxes
 16. If a person makes a deposit of $10,000 or more into a bank account, the bank must notify the
a. US Treasury Department
b. Federal Deposit Insurance Corporation
c. State Bank Commission
d. Federal Reserve Board

17. The ​Cashless Society​ refers to:

a. Using non-cash services like debit and credit cards to pay for goods and services
b. Using non-cash services like Bitcoin as the mainstream currency of choice
c. Using cash only to pay for goods and services
d. The Great Depression

Start of subset 2

18. You go to your bank to withdraw $8,000 for a down payment on a new car. The teller says they don’t
have all of the cash at the moment. Who can they get a loan from?
a. The IRS
b. The Federal Reserve
c. The President
d. Congress

19. What type of account is issued by a bank, has a maturity date, fixed interest rates, and has a penalty fee
if cashed before the maturity date?
a. Money Market Account
b. Checking Account
c. Savings Account
d. Certificate of Deposit

20. The FDIC insures deposits up to _______________.

a. $250,000
b. $20.00
c. $100,000
d. $1,000,000

21. When you are bank shopping, you must consider these 3 factors EXCEPT:
a. Interest Rates
b. Fees
c. Availability of products/services
d. If they have a couch in the waiting area
 22. A student with 100 dollars who knows they will need access to this money in case of an emergency
should probably get a
a. Money market account
b. Certificate of deposit
c. Savings bond
d. Savings account

23. A person who has 10,000 but knows they’ll only need to withdraw once a year could make the ​most
money with a
a. Money market account
b. Certificate of deposit
c. Savings bond
d. Savings account

24. When you ask the bank to issue a stop payment order on a check
a. The check cannot be cashed
b. You will be charged a fee
c. Your credit score will go down
d. Both A and B

25. You begin with 10 dollars in your checking account. Then you spend twenty dollars at Chick Fila and
another transaction of 32 dollars at Target, what will appear in your bank statement?
a. You will only owe the bank the difference - 42 dollars
b. You will be charged an overdraft fee for that day - usually between 35 and 50 dollars
c. You will be charged an overdraft fee for each transaction that put your account in the negative
d. You will be called by a friendly bank teller reminding you to budget and watch your spending

26. A federal law states you can withdraw or transfer money from your savings account _______ times per
month.
a. 2
b. 35
c. 6
d. 10

27. Banks and Credit Unions have the following similarities EXCEPT:
a. Checking and savings account
b. Owned by its members
c. ATM services
d. Mortgages and loans

Start of subset 3
28. Which of the following is considered to be open-end (revolving) credit?
a. A mortgage
b. A car loan
c. Department store charge cards
d. Installment loans

29. Consumer Credit Counseling Services (CCCS) offer:

a. Retirement plans
b. Debt repayment plans
c. Stocks and bonds
d. Insurance policies

30. A credit card finance charge is:

a. the sales tax
b. the cost of the items purchased
c. the dollar amount it costs to use credit
d. a service fee
31. Collateral is
a. something of value that secures a loan to protect the lender
b. something that explains your net worth
c. a form of credit
d. required for all loans

32. When a person brings an item to a pawnshop to obtain cash, the transaction is considered

a. a collateralized loan d. a sales agreement

b. a custodial payment
c. an unsecured loan

33. When a borrower fails to repay a loan and there is a co-signer on the loan, the most likely result will be
a. The co-signer will be held responsible for the repayment of the entire loan plus fees or penalties
b. Only the co-signer’s credit report will show that there has been a default on the loan
c. The co-signer will be held responsible for one-half the repayment of the loan
d. The co-signer has the opportunity to renegotiate the loan

34. What is meant by an uncollateralized loan?

a. a loan not backed by a co-signer who agrees to cover the amount of the loan
b. a personal loan without assets to cover the loan amount
c. a home equity loan
d. a loan taken on a life insurance policy

35. How can you protect yourself against credit fraud?

a. Do not give personal information when applying for a credit card
b. Be extremely careful about disclosing account information to unsolicited callers
c. Avoid using your credit card in department stores
d. Call the credit card company to put them on alert when you are concerned
36. When a person declares bankruptcy that fact will appear on the person’s credit report
a. for a 3 year period
b. for a 10 year period
 c. until the person repays all debts owed
d. until the person is able to receive a new credit card

37. What is a credit score?

a. A number used to determine how much credit to extend to a person
b. A measure used to indicate a person’s gross wealth
c. A reward system that is based on the number of credit cards a person has
d. A formula based solely on a person’s earnings

Start of subset 4

38. Spreading one’s assets across several types of saving and investment products to manage risk is called

a. allocation c. diversification
b. pooling d. budgeting

39. A person buys a homeowner’s insurance policy with a $250 deductible, which means the person will
a. have to pay a quarterly premium of $250
b. have to pay the first $250 which will be deducted from the claim settlement paid by the
insurance company
c. only receive payment from the insurance company of $250 for any single article damaged
d. not be responsible for the first $250 of the claimed damages

40. Money set aside to grow is typically called:

a. a budget c. net income

b. discretionary income d. savings or investments

41. The interest earned on United States Series EE Savings Bonds is

a. exempt from state and local taxes
b. paid in a lump sum at the time the face value on the bond is reached
c. equal to the money paid to purchase it
d. deducted at the time of the bond’s purchase

42. Mary’s husband died unexpectedly. Because her husband purchased life insurance, Mary will receive
$100,000 to cover funeral and life expenses. Mary is referred to as the

a. Insured c. Face value

b. Beneficiary d. Liability

43. Jane has a disease that costs a lot of money to care for. Jane does not currently have health insurance,
but needs to purchase health insurance. Jane’s disease is considered

a. A post-existing condition c. A high premium

b. Not an issue d. A pre-existing condition
44. Sally took out a $50,000 life insurance policy. The $50,000 amount of coverage is called the:

a. cash value d. annuity value

b. premium value
c. death benefit or face value

45. What is the largest equities market in the world?

a. American Stock Exchange (AMEX)
b. NASDAQ market
c. New York Stock Exchange (NYSE)
d. Over-the-counter (OTC) market

46. Gwen receives a bill from her auto insurance company, and she sends a check to the company to make
sure her policy is not canceled. The cost of her policy is called the:
a. co-insurance clause
b. premium
c. deductible
d. exclusion

47. Why does a corporation issue bonds?

a. To raise money for expansion or other company operations
b. To expand ownership of the corporation
c. To comply with Securities and Exchange Commission requirements
d. To keep from being bought by another corporation

48. A person owns a stock that pays a $2.00 a share dividend. If the person chooses to reinvest that
dividend, this means that the $2.00 will go toward buying
a. more of the same stock
b. stocks that are similar to those already owned
c. preferred stock in the corporation
d. bonds in the corporation

49. Richard’s auto insurance expired on 5/15/14. Richard was upset with his insurance agent and decided to
change insurance companies. At 10:00 am on 5/16/14, as he drove to a different agent to buy a new
policy, he had an accident. Who is liable for Richard’s damages and injuries?
a. The old agent
b. The new agent
c. Richard
d. The old agent is liable for damages and the new agent is liable for the injuries

50. Insurance is frequently described as a method of “sharing the risk” because the:
a. Risk of the loss is shared with the insurance company sales person
b. Insured shares the risk of loss with all the other policy holders
c. Insured can share the risk by spreading the cost over a number of years
d. Risk of loss is shared with the government
The W!se test is a 50 question test that you’ll take to prove you’re ‘financially literate.’ On test day, we don’t
know which questions will be asked, but we do know the categories of questions and the weighting of those
questions. There are four categories to the test:

1- Financial Planning & Money 2- Banks & Banking

3 - Credit 4 - Investing & Insurance

1) Before you take the pretest:

a) What area do you most confident about?

b) What area are you least confident about.

2) What was your score? ___________________________________________________

To analyze your test, record each question you got wrong in the table below:

1- Financial Planning & 2- Banks & Banking 3 - Credit 4 - Investing & Insurance
Money #1-17 #18-27 #28-37 #38-50

Total Right In This Section Total Right In This Section Total Right In This Section Total Right In This Section
_______ _______ _______ _______

Number Right divided by Number Right divided by Number Right divided by Number Right divided by
17 = ______________ 10 = ______________ 10 = ______________ 13 = ______________

A. What is your most successful category (highest percentage)? ____________________________

B. What is your most challenging category (lowest percentage)? _____________________________

As we review, we’ll be doing a little bit of everything BUT you want to focus on your most challenging
category and make sure you improve before the test.