2006 Jumpstart Questionaire Part 2 at Catch a Gideon

November 2nd, 2006 by digerati

This survey establishes that there are serious misconceptions about various financial topics. The questions are not difficult, bu the average score on the survey was only 52.4%! Take a look at the questions and see how many you know. Starred answers are the correct ones. I’ve added some notes after each question.

6. Which of the following instruments is NOT typically associated with spending?

1.5% a) Cash

2.4% b) Credit card

2.6% c) Debit card

*93.5% d) Certificate of deposit

7. Which of the following credit card users is likely to pay the GREATEST dollar amount in finance charges per year, if they all charge the same amount per year on their cards?

8.8% a) Vera, who always pays off her credit card bill in full shortly after she

receives it.

*70.6% b) Jessica, who only pays the minimum amount each month.

14.4% c) Megan, who pays at least the minimum amount each month and more,

when she has the money.The only defense I can see here is that Megan pays more every year because she give…wait, not it’s just wrong.

6.3% d) Erin, who generally pays off her credit card in full but, occasionally,

will pay the minimum when she is short of cash.

8. Which of the following statements is true?

10.0% a) Your bad loan payment record with one bank will not be considered if

you apply to another bank for a loan.

11.6% b) If you missed a payment more than 2 years ago, it cannot be considered

in a loan decision.

*70.9% c) Banks and other lenders share the credit history of their borrowers with

each other and are likely to know of any loan payments that you have

missed.

7.5% d) People have so many loans it is very unlikely that one bank will know

your history with another bank.

9. Doug must borrow $12,000 to complete his college education. Which of the following would NOT be likely to reduce the finance charge rate?

32.9% a) If his parents took out an additional mortgage on their house for the

loan. Home equity loans are typically among the lowest interest loans available, generally because there is substantial collateral to backup the loan.

17.6% b) If the loan was insured by the Federal Government. To be fair the bank would definetly take a loan guarenteed by the government. But if someone can tell me how to get a loan from a private bank to a private person insured then I’m going to open a bank cause the loans will be zero risk!

*30.4% c) If he went to a state college rather than a private college. The bank doesn’t care where you need the money for, it cares only about the credit risk.

19.1% d) If his parents cosigned the loan. The rate will likely decrease assuming his parents have built up good credit over a long period.

10. 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?

13.5% a) Sales tax may be charged on the interest that you earn. Sales tax is charged only to things involved in a SALE!

13.0% b) You cannot earn interest until you pass your 18^th birthday. Why not?

50.9% c) Earnings from savings account interest may not be taxed. It won’t be taxed unless you earn enough money, but since it counts as taxable income we’ll just go with no.

*22.7% d) Income tax may be charged on the interest if your income is high

enough.