#1
Which of the following is considered a liquid asset?
Savings account
ExplanationEasily accessible and convertible to cash.
#2
What does APR stand for in the context of loans?
Annual Percentage Rate
ExplanationReflects the yearly cost of borrowing.
#3
What is the purpose of an emergency fund?
To cover unexpected expenses
ExplanationProvides financial security during emergencies.
#4
Which type of insurance typically covers damage to your car in an accident?
Auto insurance
ExplanationProtects against financial loss from car accidents.
#5
What is the purpose of a 401(k) retirement plan?
To save for retirement
ExplanationHelps accumulate funds for retirement.
#6
Which of the following factors can affect your credit score?
Length of credit history
ExplanationShows your credit management experience.
#7
What is the purpose of a term life insurance policy?
To provide coverage for a specific period of time
ExplanationCovers the insured for a fixed term.
#8
What is the purpose of diversification in investment?
To reduce risk by investing in a variety of assets
ExplanationMinimizes the impact of poor performance in one asset.
#9
What is the purpose of a Roth IRA?
To allow tax-free withdrawals in retirement
ExplanationProvides tax-free retirement income.