What is a 401(k) plan?

Employer-sponsored retirement plan

What is compound interest?

Interest on accumulated interest

What is the Rule of 72 used for?

Estimate investment doubling time

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Financial Literacy Quiz

24 termsStudBud Administration24 plays

Test your knowledge on personal finance with questions ranging from budgeting to investing and retirement planning. Challenge yourself to see how financially savvy you are!

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Questions 24

Answers

1
What is a 401(k) plan?
Personal investment account
Government savings account
Tax-free savings account
Employer-sponsored retirement plan
2
What is compound interest?
Interest on accumulated interest
Fixed interest rate
Simple interest calculation
Interest on principal only
3
What does the 50/30/20 rule suggest?
100% savings
50% needs, 30% wants
30% savings, 50% debt
20% needs, 50% wants
4
What is a good credit score range?
850 to 900
500 to 700
300 to 500
700 to 850
5
What is the 'latte factor'?
Daily small expenses
Investment strategies
Large monthly bills
Savings accounts
6
What does debt-to-income ratio measure?
Debt vs. income
Expenses vs. income
Assets vs. liabilities
Income vs. savings
7
What is the average American's spending on housing?
30% of income
40% of income
50% of income
20% of income
8
What does opportunity cost refer to?
Cost of living
Investment returns
Benefits missed from choices
Debt repayment costs
9
How many months should an emergency fund cover?
6 to 12 months
12 to 18 months
3 to 6 months
1 to 2 months
10
What is the cash envelope system?
Debt repayment plan
Digital budgeting tool
Investment strategy
Cash allocation method
11
What is the Rule of 72 used for?
Calculate tax deductions
Determine loan interest rates
Assess credit scores
Estimate investment doubling time
12
What is the average student loan debt in the U.S.?
$30,000
$50,000
$10,000
$70,000
13
What does diversification in investing mean?
Investing in one asset
Mixing various investments
Focusing on high-risk stocks
Only investing in bonds
14
What is the average American's spending on coffee?
$600 a year
$800 a year
$1,200 a year
$300 a year
15
What is the average annual fee for mutual funds?
1%
3%
2%
0.5%
16
What does the 'snowball method' refer to?
Budgeting technique
Savings plan
Debt repayment strategy
Investing strategy
17
What does financial literacy encompass?
Budgeting techniques only
Understanding taxes only
Skills for informed decisions
Knowledge of investments
18
What is a health savings account (HSA)?
Tax-free medical savings
General savings account
Retirement savings account
Investment account
19
What is the average return on investment for the stock market?
7% to 10%
3% to 5%
15% to 20%
10% to 15%
20
What is the average retirement age in the U.S.?
65 years
60 years
70 years
55 years
21
What is the average return on bonds compared to stocks?
Higher than stocks
Equal to stocks
Lower than stocks
Unpredictable
22
What is the average American's credit card debt?
$10,000
$12,000
$5,000
$8,000
23
What does the time value of money principle state?
Money has no value over time
Future money is worth more
Today’s dollar is worth more
Investments lose value over time
24
What is the '4% rule' in retirement?
Withdraw 4% annually
Invest 4% annually
Spend 4% of savings
Save 4% monthly

Financial Literacy Quiz Flashcards | StudBud