Financial Literacy and Net Worth Management Quiz

APR represents the yearly cost of borrowing, including interest and fees.

Net Worth is the value of one's assets after subtracting all debts and liabilities.

Loans involve lending money and are not considered traditional investments.

Diversification involves spreading investments across different assets to reduce risk.

A credit score assesses an individual's creditworthiness based on their credit history.

Budgets are designed to allocate and manage financial resources effectively.

Net Worth is calculated by subtracting total liabilities from total assets.

IRA is a tax-advantaged account for retirement savings.

Liquidity refers to the ease of converting assets into cash without significant loss of value.

Compound interest includes interest on both the initial amount and previous interest.

ROI measures the profitability of an investment, expressing it as a percentage.

401(k) is a retirement savings plan offered by employers in the U.S.

Asset allocation involves dividing investment funds among various types of assets to manage risk and return.

Capital gains tax is levied on the profits earned from the sale of assets like stocks or real estate.

Market capitalization represents the total value of a company's shares in the stock market.