Copy of Copy of PF Unit 2 BANKING TEST (2/20/2025) (5/21/2025)

Last updated 4 months ago

30 questions

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Select the best answer for each question.  You have one class period to complete the test. Internet access will be blocked during the test. 

Select the best answer for each question.  You have one class period to complete the test. Internet access will be blocked during the test. 

Jasmine is at the mall and wants to buy a new pair of shoes. She also needs to withdraw some cash from the ATM, using funds directly from her checking account. Which type of card should Jasmine use to make her purchase and withdraw money from the ATM?

Prepaid gift card

Store loyalty card

Credit card

Debit card

Marcus forgot to check his bank balance before buying groceries. He accidentally spent more than what was in his checking account. Luckily, he had a service set up that covered the extra amount so his purchase didn’t get declined or result in extra fees. What does this service—overdraft protection—help Marcus avoid?

Exceeding his credit limit and paying store service fees

Inactive account fees

Having a transaction declined or paying overdraft fees

Paying ATM fees

Elena is thinking about opening a new checking account. She notices that the bank advertises it is insured by the FDIC. She wants to know why that’s important in case something happens to the bank. What is the main purpose of a bank being insured by the Federal Deposit Insurance Corporation (FDIC)?

To help banks earn more interest.

It insures a person's deposits in their account against bank failure.

It insures a person's bank assets against government deficits.

It insures a person's loans can be written off after a certain period of time.

You have invested $500 at 9 percent interest. According to the Rule of 72, how soon will the money double in value?

12 years

4 years

6 years

8 years

Frank has invested $1500 at 12 percent interest. According to the Rule of 72, how soon will the money double in value?

8 years

12 years

4 years

6 years

Diego just started his first job and wants a safe place to keep his money, pay bills, and use a debit card for everyday purchases. His friend suggests he open an account that allows him to deposit money, write checks, and make withdrawals easily using his debit card. What type of account is Diego’s friend most likely recommending?

Savings account

Credit account

Retirement account

Checking account

Taylor just got hired at a new job. During orientation, the employer asks if Taylor would like paychecks sent directly to a bank account instead of receiving a paper check every payday. What is the term for this method of receiving pay?

Wire payment

Mobile Deposit

Check  Deposit

Direct Deposit

Jordan stopped by the bank to put some of his birthday money into his savings account. The banker gave him a receipt showing that the amount was successfully added to his balance. What is the money Jordan added to his account called?

endorsement

Interest

withdrawal

deposit

Samantha used her debit card to buy groceries. Later, she checked her bank app and saw that the amount had been taken out of her checking account. What is the money that was taken out of Samantha’s account called?

Withdrawal

Deposit

Balance

Fee

Liam is learning about how banks protect his money. He reads that the FDIC provides insurance for money kept in certain types of bank accounts, but not all financial products are covered. Which of the following is not insured by the FDIC?

Money in a checking account

Money in a savings account

Certificates of deposit (CDs)

Stocks and mutual funds

Emma is shopping online and tries to buy a new phone case using her debit card. However, the payment doesn't go through, and the website says the transaction was declined. What could be a reason Emma’s transaction was declined?

Too much money in account

She entered the correct PIN

She shopped during store hours

Her card was expired or there were insufficient funds

Noah puts $1,000 into a savings account that earns interest. After the first year, he earns $50 in interest. The next year, he earns interest not only on his original $1,000 but also on the $50 he earned the year before. What is the term for earning interest on both the original amount of money and the interest already earned?

Variable Interest

Simple Interest

Compound interest

Principal Interest

Ava is creating a budget and wants to be prepared in case she loses her job or faces an unexpected expense, like a car repair. Her financial advisor tells her to build an emergency fund to help cover her essential needs during tough times. An emergency fund should consist of how many months' worth of expenses?

2-3 months

6-12 months

1-2 months

3-6 months

Carlos just started his first full-time job. Carlos wants to save money for his long-term goal of buying a house. He decides to have a portion of his paycheck automatically placed into a savings account before any of it goes to bills or spending. Carlos wants to make smart money decisions for his future. What is one of the easiest ways for Carlos to accomplish this goal?

Use credit cards to pay bills

Keep all his money in a checking account

Establish Pay yourself first transaction 

Set up automatic contributions to a retirement account from his paycheck

Maya is thinking about opening a new savings account at her local bank. She’s a little nervous about keeping a large amount of money in one place, but the banker assures her that the account is FDIC insured. How much money will the FDIC insure in Maya’s account?

$150,000

$300,000

$100,000

$250,000

Liam learns in his finance class that there's a simple way to estimate how many years it will take for his investment to double, based on the interest rate he's earning. He's excited to use this formula to plan for his future. What is the name of the formula Liam can use to estimate how long it will take to double his money at a given interest rate?

Simple Interest formula

Savings multiplier

Rule of 72

Compound interest formula

Sofia wants quick access to her money in case of an emergency. She’s comparing different places to keep her funds and is trying to figure out which option would allow her to get her money the fastest, without penalties or waiting periods.
Question: Which of the following is the most liquid options for Sofia?

Savings and checking account

Savings bond and Certificate of deposit

money market funds and checking account

Certificate of deposit and savings account

Brian didn't realize that he only had $58.42 in his checking account when he wrote a check to Target for $75.00. Brian's bank still honored the check because he had this service on his account. What is that service called?

Safe Deposit Protection

Interest Checking Service

Floating Service

Overdraft Protection

Jayden is comparing savings accounts at different banks. Each one offers a different method of compounding interest. He wants to choose the account that will help his money grow the fastest over time. Which compound interest method would be the best for Jayden’s savings account because it gives him the MOST money?

Quarterly

Monthly

Semiannually

Daily

Jesse has $50,000 saved in his bank account. He recently heard about a bank shutting down and starts to worry about what would happen to his money if his bank closed. Fortunately, he remembers that a government agency protects deposits like his. Which government agency protects Jesse’s money if his bank goes out of business?

Internal Revenue Service (IRS)

Financial Industry Regulatory Authority (FIRA)

Federal Deposit Insurance Corporation (FDIC)

Securities and Exchange Commission (SEC)

Rachel is exploring different savings options to grow her money. She compares a few types of accounts and notices that one of them typically pays less interest than the others, even though it's very easy to access. Which type of savings plan normally pays the lowest interest rate?

A United States Savings Bond

A Savings Account

A Money Market Account

A  Certificate of Deposit (CD)

Kila decided to open a regular savings account instead of a certificate of deposit (CD) because she wanted to be able to access her money easily without paying a penalty. She chose an option that allows her to turn her savings into cash quickly. What is the term that describes how quickly an asset can be converted into cash?

Stability

Liquidity

Compound Interest

Safety of Principal

Maya is 18 and just got her first part-time job. Her older brother encourages her to start saving a portion of her paycheck now, even though she doesn’t have a lot of expenses yet. He explains that starting early can really pay off in the future. Why is it a good idea for Maya—and other young people—to start saving money early?

They won’t need to make a budget

They will earn interest longer, helping their money grow more over time

They can avoid using banks completely

They won’t ever have to pay taxes.

Juan saved $1,000 from his summer job cleaning pools. He knows he won’t need the money for several years and wants to put it somewhere it can earn the highest interest possible over time. He’s okay with not being able to access it easily for a set amount of time. Which type of account would be the best choice for Juan?

Regular savings account

Money market account

Checking account

Certificate of Deposit (CD)

Aiden wants to start saving money but isn’t sure where to begin. He asks his teacher for advice on how to build good saving habits that will help him reach his financial goals over time. Which of the following is an effective strategy for personal saving?

Wait until the end of the month and save whatever is left in your checking account

Save a certain percentage of each paycheck and deposit it directly into a savings account

Cover all of your wants and needs and save whatever is left over

Take out a payday loan so you can save before you receive your paycheck

Lena is creating a savings plan to help her stay motivated. She decides to set short-term, medium-term, and long-term goals to give her clear targets for the future. Which of the following shows a set of goals that go from short-term to long-term?

Retirement, a house down payment, college tuition

A new cell phone, dinner with friends this weekend, a new bike

A new cell phone, college tuition, a house down payment

Retirement, college tuition, a vacation

Tiana just got her first job out of high school and is learning about managing her money. Her employer offers a retirement savings plan, but Tiana wonders if she should wait a few years before signing up. When is the best time for Tiana to start saving for retirement?

As soon as she starts earning income

Right after you pay off your student loans

Once you are debt-free, including paying off all credit cards, auto loans, and your mortgage

At age 45, so you have exactly 20 years until retirement

Aaliyah is learning about how inflation affects her savings. Her teacher explains that if prices are rising faster than the interest her savings account earns, she could actually lose value over time. If inflation is higher than your savings account interest rate, then you will be:

Keeping the same purchasing power

Losing purchasing power

Avoiding inflation altogether

Gaining purchasing power

Alyssa frequently uses a P2P (Person-to-Person) payment app to split bills with friends and pay for items she buys from people online. While she enjoys the convenience, she's also noticed a few concerns.
Which of the following is a potential disadvantage of using person-to-person (P2P) payment apps?

The risk of sending money to the wrong person

The ability to send money instantly to friends

Easy tracking of payment history in the app

The need to carry cash for every transaction

Carlos has never opened a bank account and instead uses check-cashing stores and prepaid cards to handle his money. His cousin tries to explain that being "unbanked" can lead to several financial challenges.
Which of the following is NOT a downside or challenge of being unbanked?

Paying high fees to cash checks

No way to receive a direct deposit for your paycheck 

Limited access to secure savings options

Difficulty building a credit history

Jasmine is at the mall and wants to buy a new pair of shoes. She also needs to withdraw some cash from the ATM, using funds directly from her checking account.
Which type of card should Jasmine use to make her purchase and withdraw money from the ATM?

Prepaid gift card

Store loyalty card

Credit card

Debit card

Marcus forgot to check his bank balance before buying groceries. He accidentally spent more than what was in his checking account. Luckily, he had a service set up that covered the extra amount so his purchase didn’t get declined or result in extra fees.
What does this service—overdraft protection—help Marcus avoid?

Exceeding his credit limit and paying store service fees

Inactive account fees

Having a transaction declined or paying overdraft fees

Paying ATM fees

Elena is thinking about opening a new checking account. She notices that the bank advertises it is insured by the FDIC. She wants to know why that’s important in case something happens to the bank.
What is the main purpose of a bank being insured by the Federal Deposit Insurance Corporation (FDIC)?

To help banks earn more interest.

It insures a person's deposits in their account against bank failure.

It insures a person's bank assets against government deficits.

It insures a person's loans can be written off after a certain period of time.

You have invested $500 at 9 percent interest.  According to the Rule of 72, how soon will the money double in value?

12 years

4 years

6 years

8 years

Frank has invested $1500 at 12 percent interest.  According to the Rule of 72, how soon will the money double in value?

8 years

12 years

4 years

6 years

Diego just started his first job and wants a safe place to keep his money, pay bills, and use a debit card for everyday purchases. His friend suggests he open an account that allows him to deposit money, write checks, and make withdrawals easily using his debit card.
What type of account is Diego’s friend most likely recommending?

Savings account

Credit account

Retirement account

Checking account

Taylor just got hired at a new job. During orientation, the employer asks if Taylor would like paychecks sent directly to a bank account instead of receiving a paper check every payday.
What is the term for this method of receiving pay?

Wire payment

Mobile Deposit

Check  Deposit

Direct Deposit

Jordan stopped by the bank to put some of his birthday money into his savings account. The banker gave him a receipt showing that the amount was successfully added to his balance.
What is the money Jordan added to his account called?

endorsement

Interest

withdrawal

deposit

Samantha used her debit card to buy groceries. Later, she checked her bank app and saw that the amount had been taken out of her checking account.
What is the money that was taken out of Samantha’s account called?

Withdrawal

Deposit

Balance

Fee

Liam is learning about how banks protect his money. He reads that the FDIC provides insurance for money kept in certain types of bank accounts, but not all financial products are covered.
Which of the following is not insured by the FDIC?

Money in a checking account

Money in a savings account

Certificates of deposit (CDs)

Stocks and mutual funds

Emma is shopping online and tries to buy a new phone case using her debit card. However, the payment doesn't go through, and the website says the transaction was declined.
What could be a reason Emma’s transaction was declined?

Too much money in account

She entered the correct PIN

She shopped during store hours

Her card was expired or there were insufficient funds

Noah puts $1,000 into a savings account that earns interest. After the first year, he earns $50 in interest. The next year, he earns interest not only on his original $1,000 but also on the $50 he earned the year before.
What is the term for earning interest on both the original amount of money and the interest already earned?

Variable Interest

Simple Interest

Compound interest

Principal Interest

Ava is creating a budget and wants to be prepared in case she loses her job or faces an unexpected expense, like a car repair. Her financial advisor tells her to build an emergency fund to help cover her essential needs during tough times.
An emergency fund should consist of how many months' worth of expenses?

2-3 months

6-12 months

1-2 months

3-6 months

Carlos just started his first full-time job. Carlos wants to save money for his long-term goal of buying a house.  He decides to have a portion of his paycheck automatically placed into a savings account before any of it goes to bills or spending. Carlos wants to make smart money decisions for his future.
What is one of the easiest ways for Carlos to accomplish this goal?

Use credit cards to pay bills

Keep all his money in a checking account

Establish Pay yourself first transaction 

Set up automatic contributions to a retirement account from his paycheck

Maya is thinking about opening a new savings account at her local bank. She’s a little nervous about keeping a large amount of money in one place, but the banker assures her that the account is FDIC insured.
How much money will the FDIC insure in Maya’s account?

$150,000

$300,000

$100,000

$250,000

Liam learns in his finance class that there's a simple way to estimate how many years it will take for his investment to double, based on the interest rate he's earning. He's excited to use this formula to plan for his future.
What is the name of the formula Liam can use to estimate how long it will take to double his money at a given interest rate?

Simple Interest formula

Savings multiplier

Rule of 72

Compound interest formula

Sofia wants quick access to her money in case of an emergency. She’s comparing different places to keep her funds and is trying to figure out which option would allow her to get her money the fastest, without penalties or waiting periods.
Question:
Which of the following is the most liquid options for Sofia?

Savings and checking account

Savings bond and Certificate of deposit

money market funds and checking account

Certificate of deposit and savings account

Brian didn't realize that he only had $58.42 in his checking account when he wrote a check to Target for $75.00.  Brian's bank still honored the check because he had this service on his account. What is that service called?

Safe Deposit Protection

Interest Checking Service

Floating Service

Overdraft Protection

Jayden is comparing savings accounts at different banks. Each one offers a different method of compounding interest. He wants to choose the account that will help his money grow the fastest over time.
Which compound interest method would be the best for Jayden’s savings account because it gives him the MOST money?

Quarterly

Monthly

Semiannually

Daily

Jesse has $50,000 saved in his bank account. He recently heard about a bank shutting down and starts to worry about what would happen to his money if his bank closed. Fortunately, he remembers that a government agency protects deposits like his.
Which government agency protects Jesse’s money if his bank goes out of business?

Internal Revenue Service (IRS)

Financial Industry Regulatory Authority (FIRA)

Federal Deposit Insurance Corporation (FDIC)

Securities and Exchange Commission (SEC)

Rachel is exploring different savings options to grow her money. She compares a few types of accounts and notices that one of them typically pays less interest than the others, even though it's very easy to access.
Which type of savings plan normally pays the lowest interest rate?

A United States Savings Bond

A Savings Account

A Money Market Account

A  Certificate of Deposit (CD)

Kila decided to open a regular savings account instead of a certificate of deposit (CD) because she wanted to be able to access her money easily without paying a penalty. She chose an option that allows her to turn her savings into cash quickly.
What is the term that describes how quickly an asset can be converted into cash?

Stability

Liquidity

Compound Interest

Safety of Principal

Maya is 18 and just got her first part-time job. Her older brother encourages her to start saving a portion of her paycheck now, even though she doesn’t have a lot of expenses yet. He explains that starting early can really pay off in the future.
Why is it a good idea for Maya—and other young people—to start saving money early?

They won’t need to make a budget

They will earn interest longer, helping their money grow more over time

They can avoid using banks completely

They won’t ever have to pay taxes.

Juan saved $1,000 from his summer job cleaning pools. He knows he won’t need the money for several years and wants to put it somewhere it can earn the highest interest possible over time. He’s okay with not being able to access it easily for a set amount of time.
Which type of account would be the best choice for Juan?

Regular savings account

Money market account

Checking account

Certificate of Deposit (CD)

Aiden wants to start saving money but isn’t sure where to begin. He asks his teacher for advice on how to build good saving habits that will help him reach his financial goals over time.
Which of the following is an effective strategy for personal saving?

Wait until the end of the month and save whatever is left in your checking account

Save a certain percentage of each paycheck and deposit it directly into a savings account

Cover all of your wants and needs and save whatever is left over

Take out a payday loan so you can save before you receive your paycheck

Lena is creating a savings plan to help her stay motivated. She decides to set short-term, medium-term, and long-term goals to give her clear targets for the future.
Which of the following shows a set of goals that go from short-term to long-term?

Retirement, a house down payment, college tuition

A new cell phone, dinner with friends this weekend, a new bike

A new cell phone, college tuition, a house down payment

Retirement, college tuition, a vacation

Tiana just got her first job out of high school and is learning about managing her money. Her employer offers a retirement savings plan, but Tiana wonders if she should wait a few years before signing up.
When is the best time for Tiana to start saving for retirement?

As soon as she starts earning income

Right after you pay off your student loans

Once you are debt-free, including paying off all credit cards, auto loans, and your mortgage

At age 45, so you have exactly 20 years until retirement

Aaliyah is learning about how inflation affects her savings. Her teacher explains that if prices are rising faster than the interest her savings account earns, she could actually lose value over time.
If inflation is higher than your savings account interest rate, then you will be:

Keeping the same purchasing power

Losing purchasing power

Avoiding inflation altogether

Gaining purchasing power

Alyssa frequently uses a P2P (Person-to-Person) payment app to split bills with friends and pay for items she buys from people online. While she enjoys the convenience, she's also noticed a few concerns.
Which of the following is a potential disadvantage of using person-to-person (P2P) payment apps?

The risk of sending money to the wrong person

The ability to send money instantly to friends

Easy tracking of payment history in the app

The need to carry cash for every transaction

Carlos has never opened a bank account and instead uses check-cashing stores and prepaid cards to handle his money. His cousin tries to explain that being "unbanked" can lead to several financial challenges.
Which of the following is NOT a downside or challenge of being unbanked?

Paying high fees to cash checks

No way to receive a direct deposit for your paycheck 

Limited access to secure savings options

Difficulty building a credit history

Copy of Copy of PF Unit 2 BANKING TEST (2/20/2025) (5/21/2025)

Copy of Copy of PF Unit 2 BANKING TEST (2/20/2025) (5/21/2025)

Jasmine is at the mall and wants to buy a new pair of shoes. She also needs to withdraw some cash from the ATM, using funds directly from her checking account. Which type of card should Jasmine use to make her purchase and withdraw money from the ATM?

You have invested $500 at 9 percent interest. According to the Rule of 72, how soon will the money double in value?

Frank has invested $1500 at 12 percent interest. According to the Rule of 72, how soon will the money double in value?

Taylor just got hired at a new job. During orientation, the employer asks if Taylor would like paychecks sent directly to a bank account instead of receiving a paper check every payday. What is the term for this method of receiving pay?

Jordan stopped by the bank to put some of his birthday money into his savings account. The banker gave him a receipt showing that the amount was successfully added to his balance. What is the money Jordan added to his account called?

Samantha used her debit card to buy groceries. Later, she checked her bank app and saw that the amount had been taken out of her checking account. What is the money that was taken out of Samantha’s account called?

Liam is learning about how banks protect his money. He reads that the FDIC provides insurance for money kept in certain types of bank accounts, but not all financial products are covered. Which of the following is not insured by the FDIC?

Emma is shopping online and tries to buy a new phone case using her debit card. However, the payment doesn't go through, and the website says the transaction was declined. What could be a reason Emma’s transaction was declined?

Maya is thinking about opening a new savings account at her local bank. She’s a little nervous about keeping a large amount of money in one place, but the banker assures her that the account is FDIC insured. How much money will the FDIC insure in Maya’s account?

Brian didn't realize that he only had $58.42 in his checking account when he wrote a check to Target for $75.00. Brian's bank still honored the check because he had this service on his account. What is that service called?

Rachel is exploring different savings options to grow her money. She compares a few types of accounts and notices that one of them typically pays less interest than the others, even though it's very easy to access. Which type of savings plan normally pays the lowest interest rate?

Aiden wants to start saving money but isn’t sure where to begin. He asks his teacher for advice on how to build good saving habits that will help him reach his financial goals over time. Which of the following is an effective strategy for personal saving?

Lena is creating a savings plan to help her stay motivated. She decides to set short-term, medium-term, and long-term goals to give her clear targets for the future. Which of the following shows a set of goals that go from short-term to long-term?

Tiana just got her first job out of high school and is learning about managing her money. Her employer offers a retirement savings plan, but Tiana wonders if she should wait a few years before signing up. When is the best time for Tiana to start saving for retirement?

Aaliyah is learning about how inflation affects her savings. Her teacher explains that if prices are rising faster than the interest her savings account earns, she could actually lose value over time. If inflation is higher than your savings account interest rate, then you will be:

Alyssa frequently uses a P2P (Person-to-Person) payment app to split bills with friends and pay for items she buys from people online. While she enjoys the convenience, she's also noticed a few concerns.Which of the following is a potential disadvantage of using person-to-person (P2P) payment apps?

Carlos has never opened a bank account and instead uses check-cashing stores and prepaid cards to handle his money. His cousin tries to explain that being "unbanked" can lead to several financial challenges.Which of the following is NOT a downside or challenge of being unbanked?

Carlos has never opened a bank account and instead uses check-cashing stores and prepaid cards to handle his money. His cousin tries to explain that being "unbanked" can lead to several financial challenges.
Which of the following is NOT a downside or challenge of being unbanked?