Investing
Which of the following has historically had the highest rate of return over long periods of time?
Bank savings accounts.
Bonds.
Stocks.
If the interest rate on a savings account is 2%, and inflation is 3%, what happens to your money?
Your money increases in value
Your money decreases in value
Your money remains the same
You avoid paying taxes
Your money decreases in value
What is the benefit of filing your taxes early?
You can avoid penalties for late filing
You reduce the risk of tax-related identity theft
You’ll receive your refund sooner
All of the above
All of the above
What is inflation?
A general increase in prices and fall in the purchasing value of money
A decrease in the value of your savings
A rise in interest rates
The amount of money printed by the government
A general increase in prices and fall in the purchasing value of money
Which of the following would hurt your credit score?
Closing a long-held credit card account.
Paying off student loan debt.
Getting married.
Closing a long-held credit card account
Which of the following is a key difference between a stock and a bond?
A) Stocks pay interest, bonds don’t
B) Bonds represent ownership, stocks represent debt
C) Stocks represent ownership, bonds represent debt
D) Stocks are less risky than bonds
C) Stocks represent ownership, bonds represent debt
Which type of loan typically has the lowest interest rate?
Payday loan
Credit card loan
Mortgage
Personal loan
Credit card loan
What is the recommended maximum percentage of your income that should go toward paying off debt?
10%
20%
30%
40%
20%
In accounting, the term "ROI" is often used to describe the financial performance of an asset. ROI stands for "return on" WHAT?
Investment
Which of the following would be expected to hold its value best during a time of inflation?
A certificate of deposit
A corporate bond
A house
A house
Which of the following strategies has shown the highest return over a period of years?
Moving frequently in and out of the stock market to avoid downturns and exploit upturns.
Avoiding stocks entirely by keeping money in federally insured bank accounts.
Buying and holding onto a varied set of stocks, ignoring short-run fluctuations.
Buying and holding onto a varied set of stocks, ignoring short-run fluctuations.
Which type of bank account typically offers the highest interest rate for saving money?
Checking account
Savings account
Money market account
Certificate of Deposit (CD)
Certificate of Deposit (CD)
What is the recommended amount to have in an emergency fund?
One month’s worth of expenses
3 to 6 months' worth of living expenses
One year’s salary
Enough to pay off your mortgage
3 to 6 months' worth of living expenses
What is APR in the context of credit cards?
Annual Principal Rate
Annual Percentage Rate
Adjustable Payment Rate
Automatic Payment Rate
Annual Percentage Rate
What is a credit score?
The amount of money you have in your savings account
A number representing your borrowing risk to lenders
The total of all your credit card balances
The amount of debt you owe
A number representing your borrowing risk to lenders
Which is considered a best practice for investing?
Putting all your money into one high-risk stock
Diversifying your investments across different asset types
Timing the market to buy low and sell high
Waiting until you have a large sum to invest
Diversifying your investments across different asset types
What is compound interest?
Interest earned only on the initial investment
Interest calculated on both the principal and previously earned interest
Interest that decreases over time
Interest charged on credit cards
Interest calculated on both the principal and previously earned interest
Which of these is a tax-advantaged retirement savings account?
401(k)
Savings account
Credit card
Money market account
401(k)
In finance, what term that contains a state of matter refers to the ease with which an asset can be converted to cash?
liquidity
Which factors are used to calculate credit score?
Amount owed, highest interest rate, number of cards, delinquencies, overages
Gross income, number of cards, payment history, penalties, savings
Nice smile, winning attitude, promise to be more responsible, personal references, having a job
Payment history, credit utilization, new applications, credit age, types of credit
Payment history, credit utilization, new applications, credit age, types of credit
The Securities and Exchange Commission
The Federal Deposit Insurance Corporation
No one
The US Department of Treasury
What is the key difference between "nominal interest" and "real interest"?
a) Nominal interest includes inflation, while real interest does not.
b) Real interest includes inflation, while nominal interest does not.
c) Nominal interest is the actual interest rate, while real interest is theoretical.
d) There is no difference.
b) Real interest includes inflation, while nominal interest does not.
How much of your income should be used on monthly credit card payments?
The same amount that you save each month
As much as it takes to pay off your debts in full
No more than 10% of your monthly take-home pay
No more than 30% of your monthly take-home pay
No more than 10% of your monthly take-home pay
What document can be defined as a statement of financial position, listing a company’s assets, liabilities, and equity? It can be used to determine financial return and a business’s capital structure.
balance sheet
How much money do you need for a down payment on a traditional mortgage?
At least $20,000
One year’s salary
At least 20% of the purchase price
5% of the amortization on the loan
At least 20% of the purchase price