#1
Which of the following is an example of an essential expense?
Entertainment subscription
Dining out at restaurants
Rent or mortgage payment
Vacation expenses
#2
What is the purpose of a credit score?
To track your expenses
To measure your ability to save money
To assess your creditworthiness
To determine your salary
#3
What does APR stand for in relation to loans?
Annual Payment Rate
Average Principal Return
Annual Percentage Rate
Average Payment Return
#4
Which of the following is a characteristic of a secured loan?
Requires collateral
Has higher interest rates
Based solely on credit score
Involves no risk for the lender
#5
What is the 'rule of 72' used for in finance?
To calculate inflation rate
To estimate investment growth
To determine credit card interest
To predict stock market trends
#6
What is the formula for calculating compound interest?
P = R * T
P = C / (1 + r/n)^(nt)
P = C + I
P = C * r * T
#7
What is the primary purpose of a budget?
To limit spending
To maximize debt
To track expenses and income
To invest in stocks
#8
What is the purpose of a 'grace period' on a credit card?
To charge extra interest
To report credit usage
To provide a period without interest charges
To increase the credit limit
#9
What is the difference between a traditional IRA and a Roth IRA?
Tax deductions on contributions
Tax treatment of withdrawals
Eligibility requirements
Investment options available
#10
Which of the following is a characteristic of a 401(k) retirement account?
Contributions are taxed upon withdrawal
Available only to self-employed individuals
Not subject to contribution limits
Employer-sponsored retirement plan
#11
Which of the following is NOT a type of investment?
Stocks
Mutual funds
Savings account
Credit card debt
#12
What is the purpose of diversification in investment portfolios?
To concentrate risk
To reduce risk
To eliminate risk
To increase risk
#13
What is a stock split?
A company's stock is divided into shares
A strategy to sell all stocks at once
A method to increase the value of a stock
A merger of two companies
#14
What is the difference between a traditional 401(k) and a Roth 401(k)?
Tax treatment of contributions and withdrawals
Eligibility criteria
Employer contribution limits
Investment options available
#15
What is the purpose of dollar-cost averaging?
To time the market for optimal investment
To minimize transaction costs
To invest a fixed amount at regular intervals
To trade currencies