Paying your credit card balance in full:

Builds credit and avoids interest

What does the principle of “risk vs. return” mean?

Higher risk can mean higher reward

How can a budget prevent financial problems?

Helps track income and spending

Things people buy for personal use

More expensive and takes longer

What happens in a diversified portfolio?

Money is spread across different assets

Auto insurance covers:

Car and injury damage from accidents

A company payment to shareholders

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Unit 7 - Financial Literacy

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Questions 25

Answers

1
What is impulse buying?
Saving for big items
Buying after budgeting
Researching before buying
Buying without thinking
2
Paying your credit card balance in full:
Increases your interest
Builds credit and avoids interest
Triggers penalties
Damages your score
3
What is a sign of an improving economy?
Rising stock prices
More borrowing
Lower investments
A long bear market
4
What does the principle of “risk vs. return” mean?
Low risk means high reward
Higher risk can mean higher reward
Risk avoids reward
Return lowers risk
5
An example of a high-risk, high-return investment might be:
A U.S. Treasury bond
A savings account
A start-up company’s stock
A checking account
6
A bear market means:
More jobs available
Prices are falling
Prices are rising
Profits are guaranteed
7
How can a budget prevent financial problems?
Reduces income
Eliminates taxes
Helps track income and spending
Encourages extra spending
8
What is the main goal of diversification?
Limit profits
Increase taxes
Avoid trading fees
Reduce risk
9
Which of the following is an investment?
Purchasing a stock
Renting a movie
Buying a concert ticket
A new backpack
10
What does ROI stand for?
Return on Investment
Risk of Interest
Rate of Insurance
Ratio of Income
11
A bull market is characterized by:
Falling prices
Rising prices
High unemployment
Stable prices
12
What does owning a stock represent?
A loan to a bank
Ownership in a company
A contract for services
A tax deduction
13
If you own a home, insurance is often:
Optional
Not allowed
Required by lenders
Banned by cities
14
Why is it important to know your cost of living?
To choose what stocks to buy
To avoid budgeting
To pay for school lunch
To plan for future expenses
15
Which of the following is not a stock exchange?
NYSE
TSX
NASDAQ
SEC
16
Consumer goods are:
Business profits
Government loans
Things people buy for personal use
Items used for investing
17
College is usually:
Limited to one career
More expensive and takes longer
Cheaper than trade school
Less time-consuming
18
What does a portfolio include?
A school transcript
A job resume
Only savings
A collection of investments
19
What happens in a diversified portfolio?
Credit is used
Money is spread across different assets
All money is in one place
Only real estate is used
20
Auto insurance covers:
Life expenses
Only weather damage
Car and injury damage from accidents
Grocery bills
21
Creating a budget helps you:
Pay extra taxes
Plan income and expenses
Borrow more money
Spend without limits
22
How do you build good credit?
Ignore bills
Use only cash
Make payments on time
Max out credit cards
23
What is a dividend?
A company payment to shareholders
A tax refund
A loan
A fee
24
Which platform is a stock exchange?
PayPal
Walmart
NYSE
Amazon
25
Which of the following is a need?
Designer shoes
Concert tickets
Cell phone case
Healthy food

Unit 7 - Financial Literacy Flashcards | StudBud