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Can you pass a personal finance test?

More than 5,000 high school seniors in 37 states participated in the JumpStart Coalition for Personal Financial Literacy 2006 survey. The survey tested their ability to manage financial resources such as credit cards, insurance, retirement funds and savings accounts. The average score was 52.4 percent, which was a slight improvement since the last biennial survey in 2004.

Do you think you can do better? See if you can answer 12 of the questions from the JumpStart survey, and we'll show you how your scores compare to the students:

  1. If you have caused an accident, which type of automobile insurance would cover damage to your own car?

  2. Many savings programs are protected by the federal government against loss. Which of the following is not?

    A bond issued by one of the 50 states
    A U.S. Treasury bond
    A U.S. savings bond
    A certificate of deposit at the bank
  3. Which of the following instruments is NOT typically associated with spending?

    Credit card
    Debit card
    Certificate of deposit
  4. Doug must borrow $12,000 to complete his college education. Which of the following would NOT be likely to reduce the finance charge rate?

    If his parents took out an additional mortgage on their house for the loan
    If the loan was insured by the federal government
    If he went to a state college rather than a private college
    If his parents co-signed the loan
  5. If you had a savings account at a bank, which of the following would be correct concerning the interest that you would earn on this account?

    Sales tax may be charged on the interest that you earn.
    You cannot earn interest until you pass your 18th birthday.
    Earnings from savings account interest may not be taxed.
    Income tax may be charged on the interest if your income is high enough.
  6. Under which of the following circumstances would it be financially beneficial to you to borrow money to buy something now and repay it with future income?

    When some clothes you like go on sale.
    When the interest on the loan is greater than the interest you get on your savings.
    When you need to buy a car to get a much better paying job.
    When you really need a weeklong vacation.
  7. Retirement income paid by a company is called:

    Rents and profits.
    Social Security.
  8. Many people put aside money to take care of unexpected expenses. If John and Jenny have money put aside for emergencies, in which of the following forms would it be of LEAST benefit to them if they needed it right away?

    Savings account
    Invested in a down payment on the house
    Checking account
  9. Many young people receive health insurance benefits through their parents. Which of the following statements is true about health insurance coverage?

    Young people don't need health insurance because they are so healthy.
    You continue to be covered by your parents' insurance as long as you live at home, regardless of your age.
    You are covered by your parents' insurance until you marry, regardless of your age.
    If your parents become unemployed, your insurance coverage may stop, regardless of your age.
  10. If your credit card is stolen and the thief runs up a total debt of $1,000, but you notify the issuer of the card as soon as you discover it is missing, what is the maximum amount that you can be forced to pay according to federal law?

  11. Kelly and Pete just had a baby. They received money as baby gifts and want to put it away for the baby's education. Which of the following tends to have the highest growth over periods of time as long as 18 years?

    A U.S. government savings bond
    A savings account
    A checking account
  12. Maria worked her way through college earning $20,000 per year. After graduation, her first job pays $40,000. The total dollar amount Maria will have to pay in federal income taxes in her new job will:

    Stay the same as when she was in college.
    Be lower than when she was in college.
    Double, at least, from when she was in college.
    Go up a little from when she was in college.
Bankrate.com's corrections policy
-- Posted: April 21, 2006
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