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Y9 Financial Literacy - managing debt and risk Flashcards | StudBud
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Y9 Financial Literacy - managing debt and risk
Y9 Financial Literacy - managing debt and risk
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1
What is a key benefit of having an emergency fund?
It means you never need insurance
It increases the amount of debt you can take
It automatically reduces all financial risks
It helps pay for unexpected expenses without relying on debt
2
How do rising interest rates affect borrowers?
They do not have to pay interest anymore
Their debts become more expensive to repay
They pay lower repayments on their loans
The government covers the extra cost
3
Which of the following is a good risk management strategy?
Spending all your savings
Taking out as many loans as possible
Creating an emergency fund
Ignoring financial risks
4
Which of the following is an example of good debt?
Borrowing money for a holiday
Using a credit card to buy luxury clothes
Taking out a loan to invest in education
Buying a car to go on a road trip
5
Which of the following is NOT a reason to take on good debt?
Starting a business
Investing in skills or education
Buying an asset that will increase in value over time
Borrowing money to gamble
6
Why is credit card debt often considered bad debt?
You don’t have to repay it
It has high-interest rates if not paid on time
The government pays it off for you
It improves your credit score automatically
7
Which of the following is a financial risk that can affect debt management?
Getting a salary increase
Winning the lottery
A rise in interest rates
Buying a new car
8
Why is health insurance important?
It replaces your job income
It guarantees you will never get sick
It helps cover unexpected medical expenses
It pays for all medical treatments
9
How does car insurance help a person financially?
It pays for all car expenses, including fuel
It makes sure your car never breaks down
It guarantees you won’t have an accident
It covers repair or replacement costs after an accident
10
What is insurance?
A legal requirement for all adults
A financial product that protects against financial loss
A type of investment that makes you money
A way to borrow money for free
11
What is one way to reduce financial risks?
Only using cash, never a credit card
Not paying off debts
Borrowing money from multiple lenders
Investing in different assets to spread risk
12
What happens when inflation increases?
The value of money increases
Wages automatically increase at the same rate
Prices of goods and services decrease
The cost of living becomes more expensive
13
Which of the following is NOT a type of insurance?
Shopping insurance
Health insurance
Life insurance
Travel insurance
14
What is the best way to manage debt?
Spending all your money before paying debts
Only paying the minimum amount required
Avoiding all loans and credit cards
Making regular payments on time
15
Which financial risk occurs when a person loses their job or gets a pay cut?
Inflation risk
Interest rate risk
Income risk
Credit risk
