#1
What does APR stand for in finance?
Annual Percentage Rate
Average Payment Ratio
Adjusted Profit Return
Asset Protection Ratio
#2
Which of the following is a type of investment account that provides tax advantages for retirement savings?
#3
What is the primary purpose of a budget?
To track expenses after they occur
To plan how income will be spent or saved
To maximize credit card rewards
To minimize taxes
#4
Which of the following is a type of risk associated with investing?
Inflation risk
Savings account risk
Employment risk
Checking account risk
#5
What is the difference between a stock and a bond?
Stock represents ownership in a company, while a bond is a loan to a company or government
Stock is a loan to a company or government, while a bond represents ownership in a company
Stock pays interest, while a bond pays dividends
Stock is more risky than a bond
#6
Which of the following is a key component of a credit score?
Income level
Number of credit cards owned
Length of credit history
Number of social media accounts
#7
What is the term used to describe the increase in value of an asset over time?
Depreciation
Amortization
Appreciation
Accretion
#8
Which of the following best describes diversification in investing?
Investing in a single asset class
Investing in multiple asset classes
Investing only in high-risk assets
Investing only in low-risk assets
#9
What does the term 'compound interest' refer to?
Interest paid on the original principal and on the accumulated past interest
Interest paid only on the original principal
Interest that decreases over time
Interest that is paid upfront
#10
Which of the following is a characteristic of a bear market?
Rising stock prices
Optimistic investor sentiment
Economic growth
Declining stock prices
#11
What is the purpose of insurance?
To guarantee investment returns
To protect against financial loss
To increase credit score
To maximize tax deductions
#12
What is the 'time value of money' concept in finance?
Money earned in the future is worth more than the same amount today due to its potential earning capacity
Money earned in the future is worth less than the same amount today due to inflation
Money earned today is worth more than the same amount in the future due to inflation
Money earned today is worth less than the same amount in the future due to its potential earning capacity
#13
What does the term 'liquidity' refer to in financial markets?
How easily an asset can be bought or sold
How much an asset is worth
How quickly an asset can be converted to cash
How profitable an asset is
#14
What is the 'Rule of 72' used for in finance?
To calculate how long it takes for an investment to double at a given interest rate
To calculate the total interest paid on a loan
To determine the minimum payment on a credit card
To estimate the value of a retirement account
#15
What is the role of the Securities and Exchange Commission (SEC) in the United States?
To regulate the sale of securities and protect investors
To provide loans to small businesses
To manage the national debt
To set interest rates
#16
What is the difference between a mutual fund and an ETF?
Mutual funds are traded on stock exchanges, while ETFs are not
ETFs can only be bought and sold at the end of the trading day, while mutual funds can be bought and sold throughout the day
ETFs are actively managed, while mutual funds are passively managed
Mutual funds have a higher expense ratio than ETFs
#17
What is the purpose of a will?
To specify how assets should be distributed after death
To minimize income taxes
To manage investment accounts
To protect against identity theft