Financial Literacy and Management Quiz

Education level does not directly impact credit score, unlike payment history, credit utilization, and credit history.

A budget helps in managing income, expenses, and savings effectively.

Debt insurance is not a common type of insurance, unlike health, auto, and life insurance.

Mutual funds pool money from multiple investors to invest in a diversified portfolio of securities.

Investment risks include market risk, inflation risk, and interest rate risk.

Compound interest is calculated using the principal amount, interest rate, and time period.

Stocks signify ownership in a company, whereas bonds represent debt owed by the issuer to the bondholder.

Diversification spreads investment across various assets to reduce the impact of any single investment's performance on the overall portfolio.

401(k) plans help individuals save for retirement through pre-tax contributions.

Roth IRA is a retirement account where contributions are made with after-tax dollars, and qualified withdrawals are tax-free.

A will outlines how a person's assets and properties should be distributed after their death.

457 plans are retirement savings plans for governmental and certain non-governmental employees.