#1
Which of the following is a type of bank account that typically offers higher interest rates than a traditional savings account?
Checking account
Certificate of Deposit (CD)
Money market account
Individual Retirement Account (IRA)
#2
What does APR stand for in the context of banking and loans?
Average Percentage Rate
Annual Percentage Rate
Adjusted Personal Rate
Active Profit Rate
#3
Which of the following is NOT a factor to consider when selecting a credit card?
Annual fee
Credit limit
Interest rate on savings
Rewards program
#4
What is the purpose of a FICO score in personal finance?
To measure an individual's risk of defaulting on a loan
To determine an individual's annual income
To assess an individual's investment portfolio
To evaluate an individual's net worth
#5
What is the purpose of a savings account?
To grow money through investments
To easily access funds for everyday expenses
To pay bills and manage expenses
To build a retirement portfolio
#6
What is the penalty for exceeding the annual contribution limit for an Individual Retirement Account (IRA)?
No penalty
10% penalty on the excess contribution
20% penalty on the excess contribution
Loss of tax-deferred status for the entire account
#7
What is the primary purpose of a budget?
To restrict spending
To allocate income
To maximize debt
To minimize savings
#8
What is the main advantage of diversifying your investment portfolio?
Guaranteed returns
Higher taxes
Lower risk
Limited growth potential
#9
What is the term for the process of transferring funds from one bank account to another electronically?
Wire transfer
Cashier's check
Money order
Check deposit
#10
What does the acronym IRA stand for in the context of personal finance?
Investment Revenue Account
Individual Retirement Account
International Revenue Assessment
Income Redistribution Act
#11
Which of the following is NOT typically considered a form of credit?
Credit cards
Student loans
Savings accounts
Mortgages
#12
What is the primary function of the Federal Deposit Insurance Corporation (FDIC)?
Regulate the stock market
Insure deposits in banks up to a certain limit
Set monetary policy
Manage government debt
#13
What does the term 'liquidity' refer to in the context of personal finance?
The ability to convert assets into cash quickly without significant loss of value
The total value of assets owned by an individual
The amount of money an individual earns from their investments
The ability to secure a loan without collateral
#14
Which of the following is a characteristic of a Roth IRA?
Contributions are tax-deductible
Withdrawals are tax-free in retirement
There are mandatory minimum distributions at age 70½
Income limits do not apply
#15
What does the term 'compound interest' refer to?
Interest paid only on the principal amount
Interest calculated on the initial investment only
Interest calculated on the initial investment plus any interest earned
Interest rate that remains fixed over time
#16
What does the term 'asset allocation' refer to in investment?
The process of transferring assets into cash
The process of selecting individual stocks
The mix of different asset classes in an investment portfolio
The process of timing the market to buy low and sell high
#17
Which of the following is a characteristic of a traditional IRA?
Contributions are tax-deductible
Withdrawals are tax-free in retirement
There are no income limits for contributions
There are no penalties for early withdrawals