#1
Which of the following is an example of a short-term financial goal?
Saving for retirement
Buying a house
Building an emergency fund
Purchasing a new car
#2
What is the purpose of creating a budget in personal financial planning?
To restrict spending
To allocate resources effectively
To increase debt
To complicate financial matters
#3
What is the purpose of an emergency fund in personal finance?
To invest in the stock market
To cover unexpected expenses
To purchase luxury items
To pay off debts
#4
Which of the following is NOT a component of the FICO credit score?
Payment history
Length of credit history
Investment portfolio
New credit accounts
#5
What is the purpose of a debt snowball method in personal finance?
To accumulate more debt
To pay off debts systematically
To invest in stocks
To ignore debts completely
#6
Which of the following is NOT a type of insurance typically included in a comprehensive insurance policy?
Liability insurance
Health insurance
Collision insurance
Comprehensive insurance
#7
Which of the following best describes the concept of compounding interest?
Interest earned only on the initial investment
Interest earned on both the initial investment and any interest accumulated over time
Interest earned at a fixed rate
Interest earned through speculative investments
#8
What does 'ROI' stand for in finance?
Return on Investment
Rate of Income
Revenue over Interest
Risk of Inflation
#9
What is the purpose of asset allocation in investment?
To minimize taxes
To diversify risk
To maximize spending
To speculate on individual stocks
#10
What is the rule of 72 used for in finance?
To calculate mortgage payments
To estimate how long it takes for money to double at a given interest rate
To determine credit card interest rates
To predict stock market fluctuations
#11
What is the purpose of the Securities and Exchange Commission (SEC) in the United States?
To regulate stock exchanges
To manage public transportation
To oversee agricultural production
To supervise educational institutions
#12
What is the concept of dollar-cost averaging in investing?
Buying a fixed dollar amount of a particular investment regularly
Investing in high-risk assets only
Selling investments at a loss
Investing a lump sum at once
#13
Which of the following is a characteristic of a Roth IRA?
Contributions are tax-deductible
Withdrawals are tax-free if certain conditions are met
Withdrawals are subject to penalties regardless of age
There are no limits on contributions
#14
Which of the following best describes a 401(k) retirement plan?
A government-sponsored retirement plan
A type of pension plan for government employees
A tax-advantaged retirement savings plan offered by employers
A high-risk investment vehicle
#15
Which of the following is an advantage of renting a property compared to owning it?
Building equity
Stable monthly payments
Flexibility to move
Tax deductions
#16
What is the primary function of a financial advisor?
To sell financial products
To provide personalized financial advice
To speculate on stock market trends
To minimize taxes
#17
Which of the following is NOT considered a factor in determining auto insurance premiums?
Driving record
Credit score
Vehicle make and model
Annual income