Foundations in Finance Pretest
Quiz by Kelli Potthoff
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- Q1
Which of the following statements best explains why income alone does not determine wealth?
Investing is the only factor that contributes to wealth building.
How much money a person makes does not dictate his or her spending and saving behavior.
Only people who are natural savers can become wealthy.
Income alone does determine a person's wealth.
30s - Q2
The widespread financial insecurity of Americans is primarily because:
Government programs are unavailable to help people when they are disabled or experience unemployment
Most Americans save a high proportion of their income
The saving rate of Americans is low and many borrow in order to spend more than they earn
The income of Americans are low
30s - Q3
Which of the following is not one of the three basic reasons for saving money?
Have money available to lend to friends
Emergency fund
Large purchases
Build wealth
30s - Q4
This principle suggests that a certain amount of money today has different buying power than the same amount of money in the future. This is due to both the opportunity to earn interest on the money and because inflation will drive prices up, thereby changing the "value" of the money.
Opportunity cost
Inflation
Time value of money
Interest rate
30s - Q5
Rent is a
Fixed expense
Variable expense
Intermittent expense
Discretionary expense
30s - Q6
Which of the following account records would have the most current balance?
Your own account register
All of these records will have accurate account balances
Account balance statement from the ATM
Your monthly bank statement
30s - Q7
A credit score is intended to measure:
Your financial success
Your income level
The risk of your not repaying debt
The amount of money you have in the bank
30s - Q8
Which of the following things cannot be done with a debit card but can be done with a credit card?
Purchase an airline ticket
Purchase something online
Rent a car
Go into debt
30s - Q9
Which of the following statements if false?
Students who are looking to learn specific skills can look into free or low-cost certifications found online, at community colleges, or through government-funded programs.
An associate's degree is a two-year degree that can offer specialized training and a flexible schedule that allows yu to work while you earn your degree.
On-the-job training often combines a professional trainer, hands-on activities and form classroom training.
All high-paying careers require a four-year degree.
30s - Q10
When a company places an ad an offers no interest on your purchase for three years:
The cost of the financing is built into the price of the item
They are not interested in making a profit
All of these answers are correct
They are showing their appreciating to you by giving you free money
30s - Q11
What concept is best explained by the statement, "Money spend here cannot be spent there"?
Delayed gratification
Significant purchases
Law of diminishing return
Opportunity cost
30s - Q12
Which of the following statements if false?
In addition to economic savings, wise consumers also enjoy improved health and have a positive impact on the larger social and even global environment.
Your choices as a consumer have no impact on the larger social environment.
Using a cost-benefit analysis approach to your buying decisions will make you a wise consumer.
Being a wise consumer involves developing a variety of skills, from product research to careful comparative analysis.
30s - Q13
Which statement is true about liquidity?
The more liquid an investment, the less return
The less liquid the investment, the less return
The more liquid the investment the more difficult it is to turn your investment into cash.
The more liquid an investment, the more return
30s - Q14
A young investor willing to take moderate risk for above-average growth would be most interested in:
Single stocks
Mutual funds
Bonds
Real estate
30s - Q15
When buying and selling investments, you should not:
Learn the different types of investments
Understand basic investment strategies and identify ones that will help you reach your goals
Set your investment goals and consider a time frame
Switch your investment strategy often, based on market conditions
30s