Investing
What is market volatility?
Frequent price changes due to market fluctuations.
What is a credit report?
A record of borrowing history, loans, and payments.
Why do we pay taxes?
To fund public services like healthcare and infrastructure.
Why is an emergency fund critical?
It covers unexpected expenses like job loss.
What is a currency exchange rate?
Value of one currency vs. another (e.g., 1 USD to EUR).
What is a dividend?
A portion of profits paid to shareholders regularly.
What is a secured loan?
A loan backed by collateral, like a car or house.
What is the purpose of tax brackets?
They ensure higher incomes pay higher rates.
How does compound interest affect savings?
It grows savings faster via reinvested interest.
What is economic globalization?
The global interconnectivity of trade and markets.
What is the difference between active and passive investing?
Active involves frequent trading; passive tracks indexes.
How can you improve a low credit score?
Pay bills on time, reduce credit use, and avoid new accounts.
What happens if you underpay your taxes?
Penalties, interest, and audits.
What is the importance of an asset-to-debt ratio?
Higher ratio means financial stability.
How do imports and exports affect the economy?
Exports create jobs; imports offer unavailable goods.
What is the significance of an index fund?
Tracks a market index for low-cost diversification.
How does debt-to-income ratio influence lending?
High ratios reduce lending approval odds.
How do tax credits differ from deductions?
Credits reduce tax owed; deductions lower taxable income.
What is the purpose of long-term planning?
To achieve big goals like retirement or a home.
What is the World Bank, and why does it matter?
It provides loans to reduce poverty worldwide.
How do interest rate changes impact investments?
Higher rates lower stock/bond values.
What are predatory lending practices?
Exploitative loans with high interest rates or fees.
How does marginal tax rate differ from effective?
Marginal is highest bracket; effective is average.
How does inflation impact savings?
It lowers money’s value, making inflation-beating investments vital.
How do countries manage national debt?
Via bonds, taxes, and spending adjustments; poor handling can lead to crises.