Financial Literacy Essentials Quiz
Explore essential finance concepts with 13 quiz questions. Test your knowledge on investments, APR, ROI, credit scores, and more.
#1
Which of the following is NOT a type of investment?
Stocks
Bonds
Loans
Savings accounts
#2
What does APR stand for in financial terms?
Average Payment Rate
Annual Percentage Rate
Asset Price Ratio
Annual Profit Return
#3
What is the purpose of a budget?
To restrict spending
To track income and expenses
To maximize debt
To invest in high-risk assets
#4
What is the purpose of an emergency fund?
To invest in high-risk assets
To cover unexpected expenses or income loss
To pay off long-term debt
To save for retirement
#5
What is the primary purpose of insurance?
To generate investment income
To protect against financial loss
To minimize taxes
To increase wealth
#6
What is the term used to describe a sudden and significant decline in the value of a market?
Recession
Depression
Bubble
Crash
#7
What does ROI stand for in finance?
Return On Investment
Rate Of Inflation
Risk Of Investment
Revenue On Interest
#8
What is compound interest?
Interest calculated on the initial principal only
Interest calculated on the principal plus any previously earned interest
Interest paid in advance
Interest compounded annually
#9
What is the purpose of diversification in investing?
To concentrate investment in a single asset
To spread investment across different assets
To invest only in high-risk assets
To avoid investment altogether
#10
What is a bear market?
A market characterized by rising prices and investor optimism
A market characterized by falling prices and investor pessimism
A market with stagnant prices and uncertain investor sentiment
A market with unpredictable fluctuations
#11
What is the primary function of a credit score?
To determine one's ability to save money
To evaluate one's likelihood of defaulting on loans
To calculate potential investment returns
To predict future stock market trends
#12
What does P/E ratio indicate in stock analysis?
Price/Earnings ratio
Profit/Earnings ratio
Performance/Earnings ratio
Portfolio/Earnings ratio
#13
What does the term 'liquidity' refer to in finance?
The ease of converting an asset into cash without affecting its market price
The measure of a company's debt
The total value of a person's assets
The value of an asset after depreciation
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