#1
What is the purpose of a savings account?
To earn interest on deposited funds
ExplanationEarn interest on saved money.
#2
What does APR stand for in banking?
Annual Percentage Rate
ExplanationMeasure of borrowing cost.
#3
What does FDIC stand for in banking?
Federal Deposit Insurance Corporation
ExplanationGovernment insurance for bank deposits.
#4
What is compound interest?
Interest calculated on both the initial principal and the interest accrued
ExplanationInterest on interest.
#5
What is the purpose of a checking account?
To make day-to-day transactions
ExplanationFacilitate daily transactions.
#6
What is the main purpose of a budget?
To limit spending
ExplanationControl expenses effectively.
#7
What is the term for money taken out of your paycheck before taxes?
Pre-tax deduction
ExplanationSalary deduction before taxation.
#8
What is the term for a loan that is backed by collateral?
Secured loan
ExplanationLoan backed by assets.
#9
What is a stock market index?
A measure of the performance of a group of stocks
ExplanationPerformance gauge for stocks.
#10
What is the 'rule of 72' used for in finance?
To estimate the time it takes for an investment to double in value
ExplanationQuick investment doubling estimation.
#11
What is the purpose of diversification in investing?
To reduce risk
ExplanationMinimize investment risk.
#12
What is a Roth IRA?
A retirement account where contributions are made after-tax
ExplanationPost-tax retirement savings.
#13
What is the term for a financial instrument representing ownership in a company?
Stock
ExplanationOwnership stake in a company.
#14
What does ROI stand for in finance?
Return on Investment
ExplanationInvestment profitability.
#15
What is the purpose of asset allocation in investment?
To spread investments across different asset classes
ExplanationDiversify investment portfolio.