Business & Finance · Unit 5 · Paper 1

Personal Finance unit test

A test on this unit alone, marked as a percentage and a letter grade — for the test your class is actually sitting, rather than for May. Answer everything, then submit once: seeing the answer to question 3 before attempting question 4 makes the final percentage meaningless.

Paper 1 Paper 2 Paper 3

Each paper is built from this unit’s 32 terms and is the same for everyone, so a teacher can assign “Unit 5, Paper 1” and every student sits the identical test. Multiple choice is marked objectively; the written sections you mark yourself against the model answer and rubric.

Suggested time 31 min 28 points0/17 attempted

Sinking fund

Emergency fund sizing

Principal, interest and term

Expense ratio

Minimum payment trap

Revolving vs installment credit

Why starting early beats saving more

Zero-based budgeting

Tax deduction vs tax credit

Employer retirement match

Dollar-cost averaging

W-4, W-2 and 1099

Short answer 1. Define or explain: Simple interest formula

3 pts

Short answer 2. Define or explain: Deductible, premium, copay and out-of-pocket maximum

3 pts

Short answer 3. Define or explain: Debt-to-income ratio

3 pts

Short answer 4. Define or explain: Index fund

3 pts

Free response

4 pts

A young professional is deciding between keeping their emergency fund in a standard checking account with zero interest or moving it to a high-yield savings account offering 4% APY.

Define opportunity cost.

Identify the opportunity cost of keeping the money in the checking account.

Explain the role of inflation in this decision.

Describe one potential disadvantage of moving the money to a high-yield savings account or CD.