#1
Which of the following is a fundamental principle of personal finance?
Procrastination
Diversification
Impulse buying
Ignoring budgeting
#2
In the context of investing, what does 'ROI' stand for?
Return on Investment
Rate of Inflation
Risk of Investment
Revenue on Interest
#3
What is the purpose of an 'emergency fund' in personal finance?
To fund luxury purchases
To cover unexpected expenses
To invest in the stock market
To pay off credit card debt
#4
In the context of budgeting, what does 'fixed expenses' refer to?
Expenses that change regularly
Expenses that remain constant each month
Variable income sources
Unplanned expenditures
#5
In the context of budgeting, what does 'discretionary spending' refer to?
Necessary expenses for survival
Expenses that can be adjusted or eliminated
Fixed monthly expenses
Variable income sources
#6
What does the term 'APR' stand for in the context of loans and credit cards?
Average Percentage Rate
Annual Percentage Rate
Accrued Payment Ratio
Asset Protection Reserve
#7
What is the 50/30/20 rule in personal finance?
Rule of 72
Emergency fund ratio
Budgeting rule
Debt repayment strategy
#8
What does the term 'FICO score' represent in personal finance?
A measure of financial independence
A credit score
A tax deduction
A retirement plan
#9
What is the purpose of a '529 plan' in personal finance?
Retirement savings account
College savings plan
Emergency fund account
Tax evasion strategy
#10
What is the concept of 'tax deduction' in personal finance?
A reduction in taxable income
An additional tax on income
A penalty for late tax filing
An exemption from paying taxes
#11
What is the concept of 'opportunity cost' in financial decision-making?
The actual cost of an opportunity
The cost of choosing one alternative over another
The interest rate on investments
The cost of living
#12
What is the purpose of a '401(k)' in personal finance?
Home mortgage deduction
Retirement savings account
Emergency fund account
Credit card rewards program
#13
What is the concept of 'compounding interest' in savings and investments?
Interest calculated on the principal amount only
Interest calculated on the total amount, including previous interest
Interest calculated daily
Interest waived for a certain period
#14
What is the purpose of a 'Roth IRA' in personal finance?
A type of health insurance
A retirement savings account with tax-free withdrawals
A high-risk investment fund
A home mortgage deduction
#15
What is the purpose of 'asset allocation' in investment strategy?
Increasing debt portfolio
Diversifying investments across different asset classes
Ignoring investment risks
Maximizing short-term gains