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Financial Literacy Basics Flashcards | StudBud

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What is a capital gain?

What is risk diversification?

Financial Literacy Basics

10 terms·StudBud Administration

Test your knowledge on fundamental concepts of personal financial planning and investment strategies

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Questions 10

Answers

1
What is risk diversification?
Investing in one product
Investing in different products
Avoiding all investments
Investing in correlated products
2
What is a capital gain?
No change in price
Loss on investment
Selling price > Purchase price
Selling price < Purchase price
3
What is the main goal of personal financial planning?
To spend more money
To achieve financial goals
To avoid financial mistakes
To rely on others for finance
4
Which financial product offers fixed returns?
Stocks
Real estate
Bank deposits
Bonds
5
What is the relationship between risk and return?
Lower risk, higher return
Risk and return are unrelated
Higher risk, lower return
Higher risk, higher return
6
What is the first step in personal financial planning?
Evaluating financial needs
Investing immediately
Consulting a friend
Ignoring financial needs
7
What is the main financial need for retirees?
Investing in stocks
Starting a new business
Paying for daily expenses
Buying new properties
8
Which type of risk cannot be diversified?
Personal risk
Firm-specific risk
Investment risk
Market risk
9
Which financial product has the lowest risk-return trade-off?
Stocks
Real estate
Bank deposits
Bonds
10
What is the main objective for young singles in financial planning?
Paying off debts
Investing in stocks
Creating wealth
Buying a house