NEW YORK STATE FBLA
PERSONAL FINANCE
2013
PLEASE DO NOT OPEN THIS TEST UNTIL DIRECTED TO DO SO
Test Directions
1. Complete the information requested on the answer sheet.
PRINT YOUR NAME on the “Name” line.
PRINT the name of the event, PERSONAL FINANCE on the “Subject” line.
PRINT the name of your CHAPTER on the “DATE” line.
2. All answers will be recorded on the answer sheet.
Please do not write on the test booklet.
Scrap paper will be provided.
3. Read each question completely before answering. With a NO. 2 pencil,
blacken in your choices completely on the answer sheet. Do not make any
other marks on the answer sheet, or the scoring machine will reject it.
4. You will be given 60 minutes for the test. You will be given a starting signal
and a signal after 50 minutes have elapsed.
Tie will be broken using the last 10 questions of the test.
2013 NYS FBLA SLC 2
PERSONAL FINANCE
1. The person who writes a check is called the
a. payee c. depositor
b. maker d. demander
2. The due date for filing personal income taxes every year is
a. December 31 c. January 31
b. April 15 d. June 30
3. If Emily is paid $8.90 per hour and gets time and a half for overtime, what is her overtime
rate?
a. $4.45 c. $13.35
b. $12.35 d. $17.80
4. Expenses that increase or decrease from month to month are called
a. fixed expenses c. prepaid expenses
b. unearned expenses d. variable expenses
5. A form an employer must provide employees each year for income tax purposes is called a
a. W-2 c. W-4
b. W-3 d. Form 941
6. The first step in financial planning is
a. to open a checking account c. to get a job
b. to prepare a budget d. to save
7. A “good” score on a credit report is around
a. 500 c. 600
b. 400 d. 700
8. Which of the following is a fixed expense?
a. grocery bill c. car loan
b. entertainment d. doctor bill
9. A scam set up to look like an interest-earning investment, where there actually is no
investment, and new deposits are cycled to older clients to look like returns is called a(n)
a. mutual fund c. Ponzi scheme
b. opportunity cost d. no-fault law
10. The most liquid type of account one can have due to the variety of ways to access cash is a
a. checking account c. certificate of deposit
b. savings account d. money market account
11. The tax system used in the United States, one that means the more income one makes, the
greater the percentage of taxes one pays, is called a(n)
a. aggressive tax system c. progressive tax system
b. obsessive tax system d. regressive tax system
2013 NYS FBLA SLC 3
PERSONAL FINANCE
12. A company that tracks down delinquent debt in exchange for a commission is called a
a. debt agency c. credit union
b. lending institution d. collection agency
13. Which of the following would be considered the highest risk investment?
a. commodities c. mutual funds
b. preferred stocks d. bonds
14. A check is written to Sonya Perry. On the back of the check, Sonya writes, “For Deposit
Only,” then signs her name. What kind of endorsement is this?
a. special endorsement c. blank endorsement
b. full endorsement d. restrictive endorsement
15. I = PRT is
a. the formula for simple interest c. the formula for compound interest
b. the formula for an insurance rate d. the formula for an interest rate
16. In the formula in #15, the T represents
a. Time in years c. Total
b. Target value d. Time value of money
17. Hours Worked × Rate =
a. Overtime Pay c. Net Pay
b. Gross Pay d. Incentive Pay
18. All of the following information are found on a W-2 except
a. employee’s social security number c. employee’s address
b. employer’s federal ID number d. employee’s phone number
19. Which of the following transactions would likely be difficult to make without a credit card?
a. purchasing a home c. reserving tickets for a Broadway show
b. purchasing a car d. buying groceries
20. Scholarships, work-study, grants, and student loans are examples of
a. free money c. Winnings from essay writing contests
b. financial dependency d. financial aid
21. Student loans that do NOT accrue interest until you finish school, provide a ten year
repayment period, and provide a 9 month grace period after graduation are called
a. subsidized student loans c. unsubsidized student loans
b. Perkins loans d. Stafford loans
2013 NYS FBLA SLC 4
PERSONAL FINANCE
22. An interest-bearing checking account that pays a higher rate of interest than a usual account,
but typically has more restrictions, is called a
a. special account c. money market account
b. share account d. standard account
23. The date at which a bond can be redeemed is called the
a. due date c. end date
b. maturity date d. call date
24. The person legally charged to take care of minor children in the event something happens to
the parents is called a
a. beneficiary c. legal guardian
b. god-parent d. foster parent
25. A plastic card directly linked to a checking account and used to make purchases is a
a. debt card c. credit card
b. rewards card d. debit card
26. A monthly report sent to an account holder by the bank, showing a transaction history and
bank balances for the month is called a
a. bank reconciliation report c. bank statement
b. bank history report d. financial statement
27. When the stock market is trending upward or gaining value over a period of time, it is
referred to as a
a. bull market c. stagnant market
b. bear market d. super market
28. Maria is at the doctor’s office and must pay $15 when she checks in. This is referred to as a
a. pre-pay c. pre-deposit
b. down-payment d. co-pay
29. A person who opens a personal checking account is known as the
a. depositor c. maker
b. payee d. debtor
30. Credit cards fall into the credit category of
a. installment loans c. cash advances
b. revolving credit d. closed-end credit
31. APR stands for
a. Actual Percentage Rate c. Annual Production Rate
b. Actual Production Rate d. Annual Percentage Rate
2013 NYS FBLA SLC 5
PERSONAL FINANCE
32. A credit card with an APR of 18% and using the Previous Balance Method to calculate
interest, would use which interest rate to calculate a month’s interest?
a. 1.5% c. 18%
b. 1% d. 12%
33. The unpaid portion of a loan is called
a. rate c. collateral
b. equity d. principal
34. A bounced check is a common term used when checks are written and there is(are)
a. sufficient funds c. insufficient funds
b. uncertified checks d. certified checks
35. The widest variety of banking services is provided at a
a. savings bank c. credit union
b. commercial bank d. savings and loan association
36. Copies of Form W-2 must be provided to employees by their employer for the previous tax
year no later than
a. April 15 c. January 31
b. December 31 d. January 1
37. The best way for a student to begin establishing good credit is to
a. open a savings account c. apply for a credit card
b. open a checking account d. open a store credit account
38. The form you must fill out when being hired for a job that determines the amount of
withholdings your employer will take from your gross pay is the
a. W-4 c. W-2
b. W-3 d. I-9
39. The FICA rate for 2013 has changed due to congress’ failure to discuss it while delaying or
avoiding the Fiscal Cliff. The new rate, which is actually a return to a previous amount, prior to
two years ago, is
a. 4.2% b. 1.45%
c. 2.9% d. 6.2%
40. The amount of money one takes home each pay check is also known as
a. total income c. taxable income
b. gross income d. disposable income
41. The federal minimum wage is currently
a. $8.00 per hour c. $7.50 per hour
b. $7.25 per hour d. $8.25 per hour
2013 NYS FBLA SLC 6
PERSONAL FINANCE
42. Nellie Olsen is paid $9 per hour on a 40 hour work week. She is paid time and a half for all
hours worked over 40 in any given week. Find Nellie’s gross pay for a week in which she
worked 52 hours.
a. $522 c. $468
b. $414 d. $702
43. A professional who can suggest a comprehensive, individualized action plan to help you
reach your financial goals is called a
a. business teacher c. loan specialist
b. financial advisor d. collection agent
44. Assets – liabilities =
a. net worth c. net pay
b. net liquidity d. net debt
45. An investment grade bond
a. offers the highest possible yield
b. has no rating at all
c. is considered the highest quality, lowest risk bond
d. is highly speculative
46. Which of the following is not considered an asset?
a. house c. lap top
b. car d. college tuition
47. Insurance that provides coverage for as long as the policyholder continues to pay the
premium and build up savings over time is called
a. universal life insurance c. term life insurance
b. whole life insurance d. limited life insurance
48. If for some reason one’s employment ends, the law or Act that allows you to continue your
health insurance coverage for up to 18 months after your employment ends is the
a. HIPPA c. COBRA
b. OSHA d. ECOA
49. Usually the least expensive way for a person to obtain health insurance is by
a. enrolling in an employer-provided healthcare plan
b. purchasing insurance through a private company
c. using the services of the local hospital emergency room
d. enrolling in Medicare
50. A major consumer credit law that allows you three days to change your mind about certain
credit transactions that use your home as collateral is the
a. Equal Credit Opportunity Act c. Fair Credit Reporting Act
b. Fair Credit Billing Act d. Truth in Lending Act
2013 NYS FBLA SLC 7
PERSONAL FINANCE
51. Which of the following is not a main credit bureau for rating your credit score?
a. Equifax c. Western Union
b. TransUnion d. Experian
52. When someone uses your personal information without your permission for personal gain; it
is most commonly known as
a. Identity theft c. Stealing
b. Fraud d. Perjury
53. The ability to quickly convert assets to cash is known as
a. convertibility c. liquidity
b. stability d. diversity
54. The only non-profit status banking/lending institutions are
a. commercial banks c. savings and loan associations
b. savings banks d. credit unions
55. Certificates that represent pieces of ownership in a company are called
a. bonds c. certificates of deposit
b. stocks d. commodities
56. In order to finance large public projects, states and local governments may issue
a. municipal bonds c. corporate bonds
b. junk bonds d. federal agency bonds
57. Which of the following is not a true statement about a bond?
a. In most cases, a bondholder will receive interest on a bond until the bond’s maturity date
b. A bond can be issued by a nonprofit organization as well as a corporation.
c. A bond is always a safer investment than a stock
d. A person can also make money on a bond by selling it before maturity if the price is higher
than its purchase price.
58. The right, not the obligation, to buy or sell a commodity or stock for a specified price within
a specified time period is called a(n)
a. annuity c. option
b. future d. discount bond
59. A typical down-payment for a house is about ______ percent of the purchase price.
a. 10 to 20 c. 25 to 35
b. 5 to 10 d. 40 to 50
60. A financial plan does not include
a. managing risk c. investing
b. bankruptcy d. retirement planning
2013 NYS FBLA SLC 8
PERSONAL FINANCE
61. A 21 year old college graduate starting her first full-time job want to buy a home by age 30.
Which of the following is the best plan to reach this goal?
a. She should apply for a mortgage now while she is young and rates are low
b. She should start saving and investing now in order to have a down payment needed to buy a
house
c. She should start buying things for her house while she is living with her parents and has
limited expenses
d. She should buy the house as soon as she finds the one she likes.
62. A person has a house worth $100,000, a mortgage of $90,000, savings of $5,000, a car
valued at $10,000, a $7,000 car loan, and $3,000 in credit card debt. This person’s net worth is
a. $115,000 c. $15,000
b. $100,000 d. $ 5,000
63. The application of the old saying “Don’t put all your eggs in one basket,” is called
a. diversification c. verification
b. litigation d. personification
64. The process of determining how your wealth will be allocated on or before your death is
called
a. financial planning c. retirement planning
b. estate planning d. risk management
65. If one dies without a will, the court will appoint an administrator who will distribute the
estate according to the laws of the state. The fact of dying without a will is known as being
a. intestate c. beneficiary-less
b. illegal d. heir-less
66. A fund that can be established to transfer assets in a manner that avoids taxes when
preparing the estate plan and is placed in custody of a third party is called a
a. mutual fund c. trust fund
b. transfer fund d. will fund
67. Which of the following is a defined contribution plan for employees of schools, nonprofit
organizations, and government unit?
a. Keogh plan c. 401(k) plan
b. SEP-IRA d. 403(b) plan
68. When you have sufficient income and assets to pay your debts, you are said to be
a. liquidated c. indigent
b. solvent d. secure
2013 NYS FBLA SLC 9
PERSONAL FINANCE
69. Social Security retirement benefits are
a. non-taxable in all states
b. paid to everyone, regardless if they have ever worked or not
c. insufficient to allow most seniors to retire comfortably
d. based on your taxable income during the last year you worked
70. A financial tool that provides people with revolving open-end access to funds that they can
draw from repeatedly up to some preset limit is known as a
a. credit card c. mortgage
b. certificate of deposit d. checking account
71. A technique involving simply copying your credit card or debit card numbers from your
cards is an identity thief’s tactic called
a. phishing c. pharming
b. skimming d. shoulder surfing
72. The following are ways to protect against identity theft except
a. being cautious about giving out credit card information over the phone
b. keeping a list of all credit cards and bank accounts
c. shopping online only on secure sites
d. throwing away un-shredded mail with personal information in the trash collected by waste
mgt. services
73. Getting the latest I-phone is an example of a
a. a need c. a want
b. an expense d. a liability
74. Buying a better vehicle next year is an example of
a. a middle-term goal c. a short-term goal
b. a long-term goal d. greed
75. A high school student starts a lawn mowing business. His riding lawn mower cost $1,000;
gas for the season $2,000. He spends $500 for gas driving to and from jobs, $300 for supplies
and repairs, and $200 for a trimmer. Each of his 20 customers pays $40 a week for a 20-week
season. What is the outcome of this business venture?
a. He makes a $12,000 profit
b. He makes a $4,000 profit
c. He has an $8,000 total cash inflow
d. He has a $4,000 total cash inflow
76. Credit reports are issued by
a. credit bureaus c. credit unions
b. your employer d. banks and savings & loans
2013 NYS FBLA SLC 10
PERSONAL FINANCE
77. Checking accounts protected by the FDIC are protected from loss for up to
a. $10,000. c. $25,000
b. $100,000 d. $250,000
78. The main differences between a PPO and an HMO health provider network is that
a. PPO’s generally have a larger network of providers and typically cost more than an HMO
b. HMO’s cost more than PPO’s
c. HMO’s are based on negotiated agreements with specific doctors and PPO’s are not.
d. PPO’s require individuals to choose a primary care physician and HMO’s do not.
79. How do economists measure inflation?
a. They survey consumers and ask if they are able to buy the same number of goods today as
they were a year ago
b. They compare the cost of today’s imports from China and the Middle East to goods made in
USA
c. They survey employers to determine how much they are paying in salaries and for raw
materials today
d. They compare costs of a standard group of goods and services bought today to how much
those goods cost a year ago
80. If a person earned $50,000 last year and again earns $50,000 this year, but the rate of
inflation is 4%, this year’s buying power when compared to last year’s
a. is $48,000 c. is $52,000
b. is $50,000 d. cannot be determined from given information
81. Getting information from a person online by asking her to complete a survey or provide
certain information to win a free vacation or product is called
a. skimming c. pre-texting
b. phishing d. pharming
82. Which of the following is not a type of student loan?
a. Federal Stafford loans c. Federal Perkins Loans
b. Pell grants d. Sallie mae
83. When purchasing a home, one often has the choice of an adjustable rate or a fixed APR.
Which of the following situations would make more sense to get an adjustable rate mortgage
(ARM) versus a fixed rate mortgage?
a. One wants to be sure they will never have to pay more than the current mortgage amount
b. One believes that interest rates will be going up in the near future
c. One is planning to retire in this house in 30 years with the mortgage completely paid
d. One expects to trade up to a larger house in 3 or 4 years as their career advances
84. A credit card offer with 0% interest for one year and then just 7.99% over the prime rate is
considered a(n)
a. teaser rate c. illegal rate
b. awesome rate d. scam
2013 NYS FBLA SLC 11
PERSONAL FINANCE
85. If a person owns a home valued at $350,000 and has an outstanding mortgage of $100,000, it
is said that they have a lot of equity in the home because
a. they have a lot of debt
b. they will be considered to be at risk of defaulting on their mortgage
c. they own a large fraction of their home
c. they will not be approved for additional loans until mortgage is paid in full
86. All of the following are tips on using credit cards except
a. Use a credit card only if you can cover the bill
b. Impose a tight credit limit on yourself
c. Never use savings to pay off credit cards
d. Pay credit card bills first
87. The phrase “pay yourself first,” refers to the idea of
a. do what you want to do with your money first, then worry about what you have to do with it
b. If you want it now, buy it now
c. When making your budget, include an amount for savings that acts like a “fixed expense”,
then budget variable expenses and wants, carefully.
d. Treat yourself. You deserve it.
88. How can you determine if you have reconciled your bank account?
a. when you check off all the items on the bank statement that match your check register
b. when the bank balance and your check register balance are the same
c. when you close your account
d. when you write the bank statement balance in your check register and use that balance.
89. The group that protects your deposits in a financial institution is the
a. Federal Reserve System
b. Federal Bureau of Investigation
c. Federal Trade Commission
d. Federal Deposit Insurance Corporation
90. A type of incentive pay based on the quality of work done or years of service on the job is
called a
a. bonus c. stock option
b. profit sharing plan d. commissions
91. Harold writes a check to the power company for $203.22. He should record this amount in
his check register in the
a. balance column c. fee column
b. deposit/credit column d. payment/debit column
92. What type of risk is caused by the business cycle?
a. industry risk c. market risk
b. political risk d. interest-rate risk
2013 NYS FBLA SLC 12
PERSONAL FINANCE
93. The price of stock divided by the earnings per share is known as the
a. current ratio c. P/E ratio
b. quick ratio d. dividend yield
94. A legal document authorizing someone to act on your behalf is called a
a. joint tenancy agreement c. inter vivos
b. codicil d. power of attorney
Current Pr ofit on Stock
+ Commission =
95. Purchase Pr ice
a. Earnings per share c. Interest Rate
b. Return on Investment d. Net Yield
96. Going over your credit limit or being late on a payment will likely cause you to be charged
a(n)
a. service fee c. transaction fee
b. annual fee d. penalty fee
97. A check that has cleared the bank is called a(n)
a. cancelled check c. bounced check
b. certified check d. outstanding check
98. The Internal Revenue Service has the legal right to audit your tax return and supporting
records for ____ years from the date of filing.
a. 10 c. 7
b. 5 d. 3
99. A request that a bank not honor a specific check is called a(n)
a. overdraft order c. stop-payment order
b. cancellation request d. void request
100. The need for credit arose in the United States with the dawn of the
a. American Revolution c. Great Depression
b. Information Age d. Industrial Revolution
2013 NYS FBLA SLC 13
PERSONAL FINANCE
ANSWER KEY
1. B 26. C 51. C 76. A
2. B 27. A 52. A 77. D
3. C 28. D 53. C 78. A
4. D 29. A 54. D 79. D
5. A 30. B 55. B 80. A
6. B 31. D 56. A 81. B
7. D 32. A 57. C 82. B
8. C 33. D 58. C 83. D
9. C 34. C 59. A 84. A
10. A 35. B 60. B 85. C
11. C 36. C 61. B 86. C
12. D 37. B 62. C 87. C
13. A 38. A 63. A 88. B
14. D 39. D 64. B 89. D
15. A 40. D 65. A 90. A
16. A 41. B 66. C 91. D
17. B 42. A 67. D 92. C
18. D 43. B 68. B 93. C
19. C 44. A 69. C 94. D
20. D 45. C 70. A 95. B
21. A 46. D 71. B 96. D
22. C 47. B 72. D 97. D
23. B 48. C 73. C 98. A
24. C 49. A 74. A 99. C
25. D 50. D 75. A 100. D
