#1
Which of the following is a common type of debt?
Income
Asset
Liability
Equity
#2
Which of the following is NOT a recommended strategy for debt management?
Snowball method
Avalanche method
Minimum payments only
Debt consolidation
#3
What is the recommended percentage of one's income to spend on housing expenses?
#4
What is the term for a loan that is backed by collateral?
Unsecured loan
Secured loan
Fixed-rate loan
Variable-rate loan
#5
What is the term for a situation where a borrower fails to repay a loan according to the terms agreed upon?
Default
Refinance
Consolidation
Amortization
#6
What is the recommended percentage of income to allocate towards savings?
#7
What does APR stand for in the context of loans?
Annual Percentage Return
Annual Payment Rate
Annual Percentage Rate
Average Principal Reduction
#8
What is the term used for the process of combining multiple debts into a single, larger debt?
Debt relief
Debt consolidation
Debt elimination
Debt restructuring
#9
What does the term 'net worth' represent in personal finance?
Total assets minus total liabilities
Total income minus total expenses
Total savings minus total investments
Total debt minus total income
#10
What is a '401(k)'?
A type of credit card
A retirement savings plan sponsored by an employer
A type of mortgage loan
A student loan program
#11
Which of the following is NOT a type of insurance typically recommended for personal finance management?
Health insurance
Home insurance
Life insurance
Luxury insurance
#12
What is a FICO score used for in personal finance?
Assessing credit risk
Calculating taxes
Determining savings goals
Measuring income potential
#13
Which of the following factors affects one's credit score the most?
Length of credit history
Number of recent inquiries
Types of credit in use
Payment history
#14
What is the debt-to-income ratio used for?
Assessing creditworthiness
Calculating savings potential
Determining investment options
Estimating retirement expenses
#15
Which of the following is a characteristic of a good emergency fund?
Accessible liquid assets
High-risk investments
Long-term savings bonds
Illiquid assets
#16
What does the 'debt snowball method' prioritize?
Paying off debts with the highest interest rates first
Paying off debts with the smallest balances first
Paying off debts with the longest terms first
Paying off debts with the largest balances first
#17
What does the term 'opportunity cost' mean in personal finance?
The cost of missed opportunities due to making one financial decision over another
The cost of living in a certain area
The cost of borrowing money
The cost of investing in stocks
#18
What is the purpose of a 'sinking fund'?
To save for large, irregular expenses
To invest in high-risk stocks
To pay off credit card debt
To fund everyday expenses
#19
What is the 'debt-to-equity ratio' used for?
Assessing investment risk
Determining credit limits
Evaluating mortgage options
Measuring financial leverage