#1
Which of the following is an example of a liquid asset?
Real Estate
Stocks
401(k) Retirement Account
Savings Account
#2
What does APR stand for in the context of loans and credit cards?
Annual Percentage Rate
Average Payment Ratio
Adjusted Principal Return
Annual Payment Requirement
#3
What does the term 'liquidity' refer to in personal finance?
The ability to access cash quickly without loss of value
The total value of assets owned
The amount of debt a person has
The ease of borrowing money
#4
What is the purpose of an emergency fund?
To invest in high-risk assets
To save for retirement
To cover unexpected expenses or loss of income
To purchase luxury items
#5
What is the term for the process of converting cash into assets that can earn a return?
Budgeting
Investing
Saving
Spending
#6
Which of the following is considered a liability in personal finance?
Real Estate
Savings Account
Credit Card Debt
Stocks
#7
What is the primary function of a budget in personal finance?
To restrict spending
To track income and expenses
To invest in the stock market
To obtain loans
#8
What does the term 'asset allocation' refer to in investing?
The process of liquidating assets
The distribution of investment funds among different asset classes
The process of buying high-risk stocks
The process of investing in real estate only
#9
What is the purpose of diversification in an investment portfolio?
To concentrate risk in a single asset
To minimize risk by spreading investments across different assets
To increase the volatility of the portfolio
To minimize potential returns
#10
Which of the following is NOT a factor typically considered in credit scoring?
Payment history
Age
Education level
Credit utilization
#11
What is the purpose of compounding interest in investment?
To reduce the principal amount
To decrease the overall interest rate
To increase the value of an investment over time
To limit the growth potential of the investment
#12
What is the term for the price of one currency in terms of another currency?
Interest Rate
Exchange Rate
Inflation Rate
Dividend Yield
#13
What is the 'Rule of 72' used for in personal finance?
To calculate credit card interest
To estimate how long it takes to double an investment
To determine mortgage payments
To calculate income tax
#14
What is the key difference between a traditional IRA and a Roth IRA?
Tax treatment of contributions
Eligibility requirements
Withdrawal penalties
Investment options
#15
What does the term 'asset depreciation' refer to?
Increase in the value of an asset
Loss of value over time
Profit generated from an asset
Rate of return on an asset
#16
What is the term for the difference between an asset's purchase price and its selling price?
Gross Profit
Net Profit
Capital Gain
Dividend Yield
#17
What is the primary purpose of a will in personal finance?
To specify how assets should be distributed after death
To minimize income taxes
To transfer debts to heirs
To create a trust fund