Name: 
 

Financial Literacy



Multiple Choice
Identify the letter of the choice that best completes the statement or answers the question.
 

 1. 

PL – HS – 3.2.01 DOK 2
A common advantage of a checking account is that:
a.
Every checking account earns interest
c.
Banks automatically tell you when payments are due
b.
Lost checks are insured by the federal government
d.
Canceled checks can serve as proof of payment
 

 2. 

PL – HS – 3.2.01 DOK 2
A business that receives an invoice with the terms 2/10, n/30:
a.
Must pay the entire amount right away
c.
Can deduct 2% from the amount owed if payment is made within ten days
b.
Must pay $10 now and $30 later
d.
Does not have any time on the amount to be paid
 

 3. 

PL – HS – 3.2.01 DOK 3
A fixed rate mortgage is recommended for home buyers who
a.
Want to reduce their property taxes
c.
Want to avoid the uncertainty of changing interest rates
b.
Are in a low tax bracket
d.
Plan to move every few years to a new home
 

 4. 

PL – HS – 3.2.01 DOK 2
When preparing a bank reconciliation, outstanding checks are:
a.
Subtracted from the bank balance
c.
Added to the checkbook balance
b.
Added to the bank balance
d.
Subtracted from the checkbook balance
 

 5. 

PL – HS – 3.2.01  DOK 2
Which of the following formulas would use to calculate the amount of interest earned on a 90 day certificate of deposit?
a.
Principal ÷ Rate x Time
c.
Principal x Rate ÷ Time
b.
Principal ÷ Rate ÷ Time
d.
Principal x Rate x Time
 

 6. 

PL – HS – 3.2.01  DOK 2
Which of the following methods of calculating finance charges is most appropriate for credit cards?
a.
Simple
c.
Average Daily Balance
b.
Compound
d.
Previous Balance
 

 7. 

PL – HS – 3.2.01  DOK 3
Which of the following investment options would have the most advantages at retirement for a young person just beginning a career?
a.
Individual Retirement Account
c.
Stock
b.
Bond
d.
Certificate of Deposit
 

 8. 

PL – HS – 3.2.01  DOK 2
Which of the following is an example of a capital investment in real estate?
a.
Fixing a broken fence
c.
Replacing faulty electrical wiring
b.
Adding a bedroom above the garage
d.
Repainting the front porch
 



 
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