AnswersDRHS GA-GSE Personal Financial LiteracyUnit Test

Unit Test — Unit test Answers

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1
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The Hendersons are hosting a barbecue for five people and want to purchase enough chicken for everyone to have two pieces. Which option makes the most financial sense?

A
10 individual chicken breasts at $3 each
B
5 two-packs of chicken breasts at $5 each
C
a 12-pack bag of chicken at $20
D
a 20-pack bag of chicken at $35
2
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The advertisement demonstrates a popular way companies try to sell a product.

Question illustration
A
It includes shipping and handling costs.
B
It takes into account maintenance costs.
C
It explains why this price is a good deal.
D
It makes the full cost appears lower than it is.
3

What is meant by the “right to redress”?

A
The consumer has the right to repeat any transaction.
B
The consumer has the right to replacement of damaged goods.
C
The consumer has the right to hear back from businesses that they contact.
D
The consumer has the right to fair settlement of disputes.
4

The following chart shows a store’s coat sales for two years. Identify the percent increase in total sales and the percent increase in sales of trench coats. Then find which percent of increase is greater and by how much greater it is than the other. (Round your answer to the nearest tenth.)

Question illustration
A
Sales of trench coats increased 0.7 percentage points faster than total coat sales.
B
Sales of trench coats increased 8.3 percentage points faster than total coat sales.
C
Total coat sales increased 2.5 percentage points faster than sales of trench coats.
D
Total coat sales increased 10.7 percentage points faster than sales of trench coats.
5

Martin receives an e-mail about a money-making opportunity from a sender who asks for his bank account number. The best way to avoid having his identity stolen is to

A
contact the government and report the e-mail.
B
delete the e-mail and mark it as spam.
C
open the e-mail and follow the steps outlined.
D
contact the police and file a phishing report.
6

Interest paid on a loan is calculated as a percentage of the

A
principal.
B
amount owed.
C
compounded principal.
D
collateral.
7

Which of these are ways that identity theft can happen? Check all that apply.by forgeryby phishingby fraudby financial engineeringby social engineering

A
by forgery
B
by phishing
C
by fraud
D
by financial engineering
E
by social engineering
8

Which example describes sharing risk?

A
getting car insurance
B
deciding not to buy a car
C
only driving during the day
D
driving a car at high speeds
9

Which is a reason a person might decide not to purchase insurance?

A
to have protection in case something goes wrong
B
to avoid paying costly premiums on a monthly basis
C
to be prepared for potential major changes
D
to avoid feeling insecure or uncertain about the future
10

Government regulations on credit aim to

A
ensure lenders are repaid.
B
help borrowers pay on time.
C
support those borrowing credit.
D
educate lenders about consumers.
11

Which kinds of protection does homeowner’s insurance offer? Check all that apply.It protects a car against theft in a parking lot.It covers damages to a home.It protects a home against theft.It protects against natural disasters.It protects against accidents or injuries.It covers property lost outside of the home.

A
It protects a car against theft in a parking lot.
B
It covers damages to a home.
C
It protects a home against theft.
D
It protects against natural disasters.
E
It protects against accidents or injuries.
F
It covers property lost outside of the home.
12

For a consumer with a homeowner’s policy, installing smoke detectors helps to

A
avoid risk.
B
create risk.
C
reduce risk.
D
share risk.
13

[BLANK]

A
marginal
B
comparison
C
emotional
D
research
14

Which statement best describes the role of a credit agency?

A
It tracks the use of credit for lenders.
B
It predicts future earning potential for lenders.
C
It teaches how to make smart financial decisions.
D
It shows how saving money makes financial sense.
15

Say that a company has treated you unfairly or dishonestly. Which of the following options could help you resolve the issue?I. Report them to the Better Business Bureau.II. Speak to their corporate consumer department.III. Seek the help of the Department of HHS.

A
I and II
B
II and III
C
I and III
D
II only
16

Which financing option has the highest overall costs?

A
rent to own
B
credit card
C
installment
D
cash
17

Which action is the most important for managing credit effectively?

A
Minimize your debt by paying off what you owe as soon as possible.
B
Open several credit cards to increase your borrowing limit.
C
Make only the minimum payment each month to avoid late fees.
D
Avoid checking your credit report to prevent score changes.
18

What do borrowers use to secure a mortgage loan? Check all that apply.a credit carda down paymenta houselanda vehicle

A
a credit card
B
a down payment
C
a house
D
land
E
a vehicle
19

Why do some lenders require borrowers to secure credit?

A
to prevent defaults
B
to guarantee full repayment
C
to avoid any losses
D
to reduce risk
20

The tables show two ways to pay off $500 in credit card debt.

Question illustration
A
$15 a month because it will let the person keep more spending money
B
$100 a month because it will free up credit to buy other things
C
$15 a month because it will save money in the long run
D
$100 a month because it will reduce the amount of interest paid

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