; Your Money
D. Average payment
ratio, what other
people pay in debts
similar to yours
5. What does it mean
when your house is
“underwater”?
A. Your basement
frequently floods.
B. Your mortgage has
been paid off.
C. The home’s value
is less than what you
owe on the mortgage.
10. A mutual
fund is:
A. A pool of assets
owned by many inves-
tors and operated by a
manager
B. A group of people
who mutually agree
to sponsor the same
single stock
C. A group of people
who mutually agree
to sponsor the same
charity
14. How much are you
liable for if your debit
or ATM card is stolen?
A. No more than $50, if the loss
is reported within two business days
B. Up to $500, if reported after two business days
C. The total amount, if reported after 60 days
D. All of the above
20. If your credit card
is stolen, federal
law says that you’re
responsible for
what amount of any
fraudulent charges?
A. All of it
B. 10 percent
C. $50, but most
card issuers will waive
any liability in clear
cases of a stolen card
or number
23. Which of these
statements about
debit cards is false?
A. The money for purchases comes out of
your bank account.
B. You will get a bill for
your purchases at the
end of each month.
C. You can use your
personal identification
number (PIN) or sign
for your purchases.
D. You should treat
your debit card
like cash.
6. If interest rates
increase, what
typically happens
to bond prices?
A. They rise.
B. They fall.
C. They stay the same;
bond prices don’t
change.
11. The Dow Jones
industrial average is
named for whom?
A. Wall Street Journal
founder Charles Henry
Dow and statistician
Edward Jones
B. Emerson Dow and
Horatio Jones, who
donated land to build
the New York Stock
Exchange
C. Dow Chemical and
Jones Apparel, the
first stocks offered to
investors
D. Railroad maven
Dowetta Jones, Casey
Jones’ mom
income that should
be contributed to
an IRA or other re-
tirement account in
order to retire com-
fortably at age 65?
A. 22% B. 37% C. 43%
15. AnnualCredit
Report.com is the
only authorized
source for the free
report that’s yours
by law.
A. True B. False
21. A credit
report is:
A. A list of your
financial assets and
liabilities
B. Your borrowing and
bill payment history
C. Your available
credit line at banks
and other lenders
24. Which of the
following state-
ments about credit
cards is false?
A. There’s a preset
Continued on page 33
7. Most credit
scores range from
300 to 850.
A. True B. False
8. At what age can
you generally start
to take money from
a 401(k) or tradi-
tional IRA without
early-withdrawal
penalties?
A. 59½ C. 66½
B. 62½ D. 70½
12. For late savers
in their mid-50s,
what’s the recommended amount of
an $80,000 annual
13. What is the dif-
ference between a
stock and a bond?
A. Nothing. They are
the same.
B. Investing in stock
means you’ve bought
part of a company;
investing in bonds
means you’ve loaned
money to companies,
governments or other
groups in exchange
for interest payments
and redemption of the
bond when it matures.
C. A stock has no
expiration date; bonds
are issued for specified
time periods.
D. B and C
16. With no catastrophic illness, how
much does a typical
retiree pay out of
pocket for health
care, with Medicare
and private insurance
covering the rest?
A. 10% B. 20% C. 40%
17. What should you
include in a basic
retirement budget?
A. Income and regular
expenses
B. Savings goals
C. Unexpected or
infrequent expenses
D. All of the above
18. There are how
many federal income
tax brackets?
A. Six: 10%, 15%,
25%, 28%, 33%, 35%
B. Four: 15%, 25%,
28%, 33%
C. Two: 15% and 35%
9. After what
age must you
start taking
minimum with-
drawals from
your 401(k)
and most other
retirement
accounts, or
face heavy tax
penalties?
A. 59½ C. 66½
B. 62½ D. 70½
19. If you have a high
credit score—760
or better—how
much lower would
your mortgage rate
be than for some-
one whose score is
around 620?
A. About ¼ lower
B. About 1 lower
C. About 1.5 lower
22. What is a reverse mortgage?
A. An agreement to sell your home, once its
mortgage has been paid in full, directly to a
bank or other lender. That lender then pays
the seller monthly “mortgage” installments.
B. A loan, for homeowners 62 and older,
that allows them to convert home equity
into cash without having to sell or vacate.
The loan is repaid when they die, move or
sell the home.
C. A one-time cash payout by lenders to
reward homeowners who pay off their
mortgages before their due dates.
