Investments 1 & 2
What is the relationship between risk and reward in investing?
The higher the risk, the higher the potential reward
What is retirement planning?
A plan to save money for when you're no longer working
What is the definition of a credit score?
A measure of how likely you are to pay back money that you borrow
Name something that is not considered an example of long term savings
Wedding
What is the primary purpose of life insurance?
To provide financial support to your beneficiaries if you pass away
What is the difference between a stock and a bond?
Stocks represent ownership in a company, while bonds represent a loan to a company
Name a type of retirement plan offered by employers.
401 K or 403 B
What is the difference between a debit card and a credit card?
Debit cards allow you to spend money you already have, while credit cards allow you to borrow money and pay it back
According to the 30-20-10 rule, what percent of your income should go towards your car?
10%
The amount you pay in exchange for insurance coverage is call a _____________.
Premium
What is the stock market?
A virtual marketplace where people buy and sell stocks
What is the recommended percentage of your income to save for retirement?
10%
Which of the following is a responsible credit card usage habit?
A) Making only the minimum payment due each month B) Using the card to withdraw cash from an ATM C) Paying off the balance in full each month D) Applying for multiple credit cards at once
C) Paying off the balance in full each month
Give an example of a fixed expense
Mortgage or Rent
This type of life insurance has a much higher premium compared to whole life insurance because term life insurance has an investment account or cash value.
Term Life Insurance
How can you earn a profit from stocks?
By buying low and selling high
What is the maximum amount of contribution one can add to their ROTH IRA?
$6,000
According to FICO what is a poor credit score?
Poor credit: A FICO score below 580 is considered poor credit.
According to the 30-20-10 rule, 30% percent of your income should go towards your _______?
Home
What does a teenager need in order to get life insurance?
Parental Consent
Which of the following is NOT a key factor to consider when investing in stocks?
A) The company's financial health B) The company's management team C) The stock's price on a given day D) The industry or sector the company operates in
C) The stock's price on a given day
Which of the following is a common retirement planning mistake?
A) Starting to save for retirement early B) Diversifying investments to manage risk C) Underestimating how much retirement will cost D) Investing too aggressively in high-risk stocks
C) Underestimating how much retirement will cost
The company that created the FICO credit scoring model is called FICO. What does F.I.C.O stand for
Fair Isaac Corporation
What is interest?
The amount of money you earn on an investment or savings account
Why is whole life insurance typically recommended by agents and financial advisors?
Because agents receive a much higher commission for selling this product.