Week 3 Quiz
Directions: Please consult the course materials and highlight the correct answer to each question in Microsoft Word, save your work to your My Documents folder and then upload it to be graded. Please ensure that your work saved properly and is what you want to have graded. If you are not 100% certain about the correct answer to the question please feel free to defend your response by typing up an explanation next to your response citing the course materials, but only highlight one answer choice to each of the fifteen questions.
1. What is the main disadvantage of using only a debit card?
a. Debit card purchases are not reported to credit reporting agencies and therefore will not help you build your credit score.
b. Not all stores accept debit cards.
c. You may earn better rewards with a credit card.
d. Credit cards offer fewer protections if your card is lost or stolen.
2. When selecting and using a debit card, you should avoid
a. monitoring your account every other day
b. prepay cards that allow you to load more money onto them
c. debit cards tied to your checking account
d. overdraft protection that allows you to spend more than you have
3. Which of the following is not an effective way to think about money?
a. Live below your means but within your needs.
b. Only purchase needs, not wants.
c. Financial freedom requires making a lot of money.
d. Pay yourself first.
4. The smartest way to build an emergency fund is to
a. set aside small amounts monthly through an automatic savings plan.
b. open a home equity line of credit (HELOC) that you can tap into in case of emergency.
c. take out multiple credit cards with high credit limits that you can tap into in emergencies.
d. go on a strict budget and save as much as possible until you have an emergency fund.
5. How much money should you have in your emergency savings account?
a. An amount that will safely cover your bills for three to six months
b. An amount equal to