What is net worth calculated as?

Total assets minus total liabilities

Flexible and regularly reviewed

Financial literacy includes understanding of:

All aspects of money management

A good investment portfolio should be:

Reviewed and rebalanced periodically

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

Personal Finance and Financial Literacy Flashcards | StudBud