Flexible and regularly reviewed

What is net worth calculated as?

Total assets minus total liabilities

A good investment portfolio should be:

Reviewed and rebalanced periodically

Financial literacy includes understanding of:

All aspects of money management

In investment strategy, diversification refers to:

Spreading investments across different assets

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Personal Finance and Financial Literacy

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Personal Finance and Financial Literacy Test Review

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Questions 20

Answers

1
A budget should be:
Flexible and regularly reviewed
Based only on income
Created once yearly
Fixed and never changed
2
Which expense tracking method is most effective?
Daily digital recording
Memory-based tracking
Monthly estimates
Annual review
3
A 401(k) is:
A type of checking account
A short-term investment
A retirement savings plan
A government bond
4
What is net worth calculated as?
Total investments minus total loans
Total income minus total expenses
Total savings minus total debt
Total assets minus total liabilities
5
The most tax-advantaged retirement account is typically:
A checking account
A Roth IRA
A money market account
A regular savings account
6
Which factor has the most significant impact on your credit score?
Length of credit history
Payment history
Credit utilization
Types of credit accounts
7
What is considered a good debt-to-income ratio?
Above 50%
Below 36%
Between 43-49%
Between 60-70%
8
A good investment portfolio should be:
Focused on one industry
Based on current trends only
Left unchanged for decades
Reviewed and rebalanced periodically
9
Which factor least affects your credit score?
Credit utilization
Payment history
Length of credit history
Your salary
10
Financial literacy includes understanding of:
Solely investment options
All aspects of money management
Just credit cards
Only banking services
11
When calculating inflation's impact on savings, what typically happens to purchasing power?
Increases over time
Remains constant
Fluctuates randomly
Decreases over time
12
Which is considered a liability?
Real estate owned
A car loan
Savings account
Stock investments
13
The primary purpose of a budget is to
Restrict all spending
Track past expenses only
Plan and control finances
Save every dollar earned
14
Emergency funds should be kept in:
Long-term CDs
Cryptocurrency
Easily accessible accounts
High-risk investments
15
An Annual interest rate of 8% on a loan means:
Quarterly payments of
Daily interest of
Monthly payments of per borrowed
Annual cost of per borrowed
16
The best time to start tracking expenses is:
After getting into debt
Immediately and consistently
At the beginning of each year
When starting retirement
17
Assets typically include?
Car loans
Credit card balances
Monthly bills
Cash and investments
18
In investment strategy, diversification refers to:
Focusing on single-industry investments
Spreading investments across different assets
Putting all money in high-risk stocks
Investing only in government bonds
19
A healthy emergency fund typically covers:
2 years of expenses
1-2 weeks of expenses
3-6 months of expenses
12 months of expenses
20
What is typically NOT considered an asset?
Real estate property
Credit card debt
A savings account
Investment portfolio

Personal Finance and Financial Literacy Flashcards | StudBud