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Last Personal Finance
Last Personal Finance
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A personal finance test
Flashcards
22 cards
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Practice quiz
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Host live
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Questions
22
Answers
1
It is important to earn at least 3% interest or return on your money because...
Otherwise your money will lose value due to inflation
Almost every investment earns at least that much
That will pay for account fees
You must pay for investment taxes
2
Bond investments are not risky because...
You are loaning money to a government
They are insured by the FDIC
Bonds have a history of very high returns
They involve very strong corporations
3
Which IS NOT intelligent financial advice for marriage?
Do not marry someone else who cannot pay their own bills
Marry as early as possible in order to maximize savings
Have two children or fewer
Do not get married until you can pay your own bills
4
The FIRST thing to do at the start of each month is...
Save or invest a set amount of money
Calculate that months variable expenses
Buy all "need" items for the month
Pay all of your bills
5
How will your money earn the most interest?
In a checking account
In the stock market
In a money market account
In a savings account
6
What is the smartest step to take after graduating from high school?
Get married to combine earning power
Get some additional training or education
Take out loans for a vehicle of your own
Immediately move out your family home
7
Which is an advantage of investing in the stock market?
Investing in the stock market keeps your money liquid
Risk is extremely low
You are guaranteed to at least get your money back
Your returns could be high
8
An emergency fund should include at least ________ months worth of expenses.
Twelve
Two
Six
Four
9
Which is TRUE about money?
Money today is more valuable than money in the future
The best place to keep money is a secure safe in your home
Due to inflation, the buying power of money always rises
Money increases its value when left in a checking account
10
Which type of investment involves the least risk?
Stock market
Collectible
Bond
Real estate
11
Which is most liquid?
A savings account
A checking account
A money market account
A bond
12
Which is not necessary to in order to "pay yourself first"?
Have a high paying job
Know roughly what your monthly expenses are
Have a set savings or investment goal
Know roughly how much money you will earn each month
13
Where should the money that you will use to pay monthly bills be kept?
Money Market Account
Checking account
Stock Market
Savings account
14
Which of the following should be done FIRST?
Invest over the long term for your retirement
Get a job that allows you to pay your own bills
Establish an emergency fund of several months expenses
Marry someone who is financial stable
15
Where should your emergency fund money be kept?
Savings account
Stock market
Checking account
Money market account
16
Assets that offer potential income but come with the risk of loss are...
Investments
Accounts
Principals
Savings tools
17
Investments should be used to pay for which of the following?
Short term goals such as vacations
Long term goals that are years away
Monthly bills
Unexpected emergencies
18
A monetary asset that contributes to net worth is
bond
savings
investment
account
19
Which of the following should be done LAST?
Take a job that begins your career path
Begin investing your money for long term goals
Gain financial independence and pay your own bills
Establish an emergency fund of 6 months expenses
20
Credit cards are useful to build credit as long as...
You pay them off at the end of every month
You link them to your savings account
You link them to your checking account
You carry a balance each month
21
Which is FALSE regarding certificates of deposit (CDs)?
They are not as liquid as checking accounts
They are investments that mature over a period of time
They offer higher interest rates than savings accounts
They are offered by credit unions but not banks
22
John plans to eat only bread and water in order to save money. This is not a realistic plan....
Due to the trade offs required
Due to the time value of money
Due to his lack of principal
Due to the rate of inflation
