Personal Finance and Income Management Quiz
Test your knowledge on fixed expenses, investment strategies, retirement accounts, and more in this comprehensive income management quiz!
#1
Which of the following is an example of a fixed expense?
Grocery shopping
Rent or mortgage
Entertainment
Dining out
#2
What does APR stand for in relation to loans and credit cards?
Average Percentage Rate
Annual Percentage Rate
Adjusted Payment Rate
Accumulated Principal Return
#3
What does ROI stand for in finance?
Return on Investment
Rate of Interest
Risk of Inflation
Revenue of Income
#4
What is the 'emergency fund' commonly recommended for?
Paying off credit card debt
Investing in high-risk stocks
Covering unexpected expenses
Buying a new car
#5
What does 'Dollar-Cost Averaging' involve?
Investing a fixed amount of money at regular intervals
Buying and selling currencies
Investing only in companies listed in the Fortune 500
Trading commodities
#6
Which of the following is a characteristic of a Roth IRA?
Contributions are tax-deductible
Withdrawals are tax-free in retirement
There are mandatory withdrawals at age 72
Contributions are limited to $10,000 per year
#7
What is the primary benefit of diversification in an investment portfolio?
Maximizing returns
Minimizing risk
Avoiding taxes
Speeding up capital gains
#8
What is the debt-to-income ratio used for?
To calculate credit card interest
To measure a person's ability to repay debt
To determine the stock market performance
To assess the value of a home
#9
Which of the following is a characteristic of a 401(k) retirement account?
Contributions are not tax-deductible
Withdrawals are tax-free
There are no penalties for early withdrawals
Contributions are not subject to annual limits
#10
In the context of credit scores, what does 'FICO' stand for?
Financial Indicator and Credit Obligation
Federal Insurance and Credit Oversight
Fair Isaac Corporation
Fiscal Integrity and Credit Options
#11
What is the rule of 72 used for in finance?
To calculate compound interest
To estimate the number of years for an investment to double
To determine mortgage payments
To assess stock market volatility
#12
What is the term for the interest rate set by the Federal Reserve for lending to other banks?
Prime rate
Libor rate
Discount rate
Federal funds rate
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