- | Page
WISE PRACTICE TEST 2 EXAM
QUESTIONS WITH 100% CORRECT
ANSWERS
Question :If a person has to pay $35 a year on each $100
borrowed, the cost in interest is
Correct answer:high
Question :When a person wins $5,000 in the lottery, the
person will
Correct answer:have to report the $5,000 to the Internal
Revenue Service (IRS) as income for that year.
Question :Which budget category is correctly matched
with its explanation?Correct answer:Fixed expense: $120 monthly car insurance bill
Question :The cost of car insurance is affected by the
Correct answer:kind of car owned
- | Page
Question :Why would a person put a stop payment on a
check?
Correct answer:To prevent anyone from cashing a check
that was lost or stolen.
Question :A person has a car loan with a 10% interest
rate. The loan would cost the least amount of money if it is paid back in
Correct answer:3 years
Question :A person finds an error when reviewing her
credit report. What can she do?
Correct answer:Contact the credit reporting agency
immediately about the error
Question :Why does a corporation issue bonds to the
public?
Correct answer:it wants to borrow money
- | Page
Question :Bankruptcy allows a person to erase all of the
following debts EXCEPT for
Correct answer:credit card charges and installment loans
Question :Read this paragraph: "Teenagers generally have money to spend and their spending represents a large portion of our state and national economy. Teenagers spend billions of dollars each year. This is because the majority of teenagers living at home and working part- time generally do not have to pay for a mortgage, electricity, and water bills."According to the paragraph above, teenagers need to be financially literate because they are
Correct answer:spending money
Question :The line of credit on a person's credit card has
been increased from $5,000 to $7,500. What does the increase mean?
Correct answer:The credit card owner can charge
purchases up to $7,500
- | Page
Question :A benefit of using a debit card is that it
provides a way to
Correct answer:limit the amount of cash a person needs to
carry
Question :The US government uses a
progressive/graduated income tax method. This means that the income tax a person has to pay is based on the idea that the
Correct answer:more the person earns, the more the
person pays
Question :A person should consider paying her monthly
bills automatically from her checking account because it
Correct answer:makes it easier to pay the bills on time
each month
Question :To become a Certified Financial Planner, the
person must have
Correct answer:passed specific examinations to qualify
for the license