#1
Which of the following is a characteristic of a fixed-rate mortgage?
Interest rate remains constant for the entire loan term
ExplanationInterest rate remains constant.
#2
What does APR stand for in the context of financial products?
Annual Percentage Rate
ExplanationAnnual Percentage Rate.
#3
What does the term 'liquidity' refer to in finance?
The ability to convert an asset into cash quickly without affecting its price
ExplanationAbility to convert assets to cash without price change.
#4
Which of the following is a common type of retirement account in the United States?
401(k)
ExplanationCommon retirement account in the US.
#5
What is the purpose of a budget?
To track spending and ensure financial goals are met
ExplanationTracking spending and goal achievement.
#6
In a negotiation, what is the 'BATNA'?
Best Alternative to a Negotiated Agreement
ExplanationBest Alternative to Negotiation.
#7
Which of the following is NOT a factor typically considered in credit scoring?
Current income level
ExplanationCurrent income level not considered.
#8
What is the concept of 'opportunity cost' in economics?
The cost of the next best alternative forgone
ExplanationCost of the next best alternative.
#9
What is the purpose of asset allocation in investment?
To diversify investments across different asset classes
ExplanationDiversifying investments.
#10
What is the 'sunk cost fallacy'?
A cognitive bias where individuals continue to invest in a project despite evidence of failure
ExplanationContinuing investment despite failure evidence.
#11
What is the purpose of a 'stop-loss order' in investing?
To prevent losses in a declining market by automatically selling a security
ExplanationAutomatically sell to prevent losses.
#12
What is 'compound interest'?
Interest calculated on both the initial principal and the accumulated interest
ExplanationInterest on interest.
#13
What is the 'efficient market hypothesis'?
A theory stating that financial markets are always in equilibrium and prices reflect all available information
ExplanationMarkets in equilibrium, prices reflect information.
#14
What does 'diversification' mean in investment?
Spreading investments across different assets to reduce risk
ExplanationSpreading investments to reduce risk.
#15
What is 'arbitrage'?
The process of taking advantage of price differences in different markets
ExplanationExploiting price differences in markets.