Financial Planning and Consumer Protection — Test Answers

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Compared to a short-term investment, what is the general return of a long-term investment?

A
A long-term investment has a lower return because it has lower risk.
B
A long-term investment has a similar return to a short-term investment.
C
A long-term investment has a greater return because it has lower risk.
D
A long-term investment has a greater return because it has greater risk.
3

Noah received a text from his streaming service that his account was on "HOLd.” The text instructed him to click the link and provide the required information to reactivate his account. How can Noah protect himself from identity theft?

A
Noah should delete the text and indicate it as spam.
B
Noah should click the link in the text and follow the instructions provided.
C
Noah should click the link in the text and follow up with a call to his service provider.
D
Noah notices the mixed characters of “HOLd” and should click the link to verify the issue.
4

Which of these is the best example of an asset?

A
the coffee someone drank this morning
B
an old, used airline ticket
C
the antique diamond necklace someone is wearing
D
the electricity in a home
5

What is the first step in the decision-making process?

A
Get information.
B
Take action.
C
Identify the choices.
D
Form a decision.
6

Putting money into more than one kind of investment at a time is called

A
compound interest.
B
sunken cost.
C
liquidity.
D
diversification.
9

What is meant by the "right to redress”?

A
The consumer has the right to hear back from businesses that they contact.
B
The consumer has the right to replacement of damaged goods.
C
The consumer has the right to fair settlement of disputes.
D
The consumer has the right to repeat any transaction.
11

Which is an example of a short-term investment?

A
houses
B
savings accounts
C
retirement funds
D
bonds
12

Julie wants to buy a car and is deciding how she should invest her money. To best meet her needs, she should

A
keep her money in a savings account for easy access.
B
keep her money in a checking account for easy access.
C
invest in US savings bonds because of its short term.
D
invest in a commodity because of its low risk.
13

Personal finance skills have the most significant impact on an individual’s

A
quality of life
B
neighborhood safety
C
career
D
education
15

Which action is an example of a service provided by an organization receiving charitable donations?

A
maintaining a public broadcasting radio station
B
hosting children’s parties at a paint-your-own-pottery franchise
C
training a competitive dance troupe within a teacher-owned studio
D
renting booths at an art show on privately owned fairgrounds
16

What can be researched about a nonprofit organization through a regulatory agency?

A
the calendar of upcoming organizational events
B
the schedule for distributing profits to owners
C
the current number of active volunteers
D
the level of compliance to nonprofit status regulations
17

Interest rates are expressed as a percentage of

A
the profit.
B
taxes owed.
C
investment fees.
D
the loan.
19

Who should you contact first if you have been a victim of identity theft?

A
Transunion
B
police
C
Experian
D
Federal Trade Commission
20

Which statement best describes the role of a credit agency?

A
It teaches how to make smart financial decisions.
B
It tracks the use of credit for lenders.
C
It shows how saving money makes financial sense.
D
It predicts future earning potential for lenders.

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