Banking
What is Interest?
Fee for the use of other people’s money
What is a budget?
A way to balance income, expenses, and financial goals
What is a principle?
Amount of money borrowed
What is a premium?
Amount you pay for insurance
What does diversification mean in investing?
Spreading risk over a variety of asset classes (stocks, bonds, cash, etc)
What is compound Interest
Interest on Interest
What is cognitive bias?
A systematic error in thinking
What is the range of a credit score?
300-850
What are the three main types of insurance?
Renters, Auto, Health
Which are the 2 trends in the stock market?
Bear Market and Bull Market
What is the criteria for money?
Durable - Portable - Divisible - Uniform - Limited - Accepted
What does FOMO stand for?
Fear Of Missing Out
What is a fixed interest rate?
Interest rate that does not change over the course of the payment
What is a limit in insurance?
Maximum insurance will pay for a type of coverage
What is an index fund?
Type of mutual or exchange-traded fund (ETF) that tracks the performance of a market index
3 Functions for money.
Medium of exchange
Unit of account
Store of value
What is Bandwagon Bias?
Conforming to the crowd
What is a revolving loan?
Open line of credit for any purchases
What is a claim in insurance?
By sector/industry, By region/country, By size/stage
Difference between Checking and Savings accounts.
Checking is for daily transactions and Savings is for long term savings.
What budget utilizes every dollar, leaving a balance of ZERO?
Zero based budget
Name 3 factors that affect your credit score.
Payment history, Credit utilization, Credit history length, Types of credit, New credit/inquiry
Name 3 factors that determine auto insurance rates.
Deductible, Mileage, Driving record, personal info, Model or year of car
What are 3 ways to reduce investment risk?
Long time horizon, Mix of types of companies, Spread buys over time