#1
What is the primary function of a savings account?
To earn high returns through investments
To facilitate daily transactions
To provide a safe place to store money
To pay off debts
#2
What is the purpose of a budget in personal finance?
To maximize spending without limitations
To track and plan income and expenses
To invest in high-risk assets
To avoid taxes
#3
What is the purpose of an emergency fund in personal finance?
To fund luxury purchases
To cover unexpected expenses and financial emergencies
To invest in high-risk ventures
To pay off long-term debts
#4
What is the concept of net worth in personal finance?
Total income earned in a year
Total assets minus total liabilities
Total debt incurred
Total savings in a bank account
#5
What does APR stand for in the context of loans and credit cards?
Average Payment Rate
Annual Percentage Rate
Accrued Principal Return
Asset Portfolio Ratio
#6
What is the purpose of a credit score?
To track monthly spending habits
To determine eligibility for loans and credit
To calculate income tax
To manage investment portfolios
#7
Which of the following is a characteristic of a fixed-rate mortgage?
The interest rate changes periodically
The interest rate remains constant throughout the loan term
The loan term is flexible
No down payment is required
#8
What does FDIC stand for in the context of banking?
Federal Department of Investment and Credit
Financial Disclosure and Insurance Corporation
Federal Deposit Insurance Corporation
Foreign Deposit and Investment Council
#9
What is the difference between a debit card and a credit card?
Debit cards have a higher interest rate than credit cards
Credit cards are linked to a savings account, while debit cards are not
Debit cards use the cardholder's money, while credit cards involve borrowing money
Credit cards have no spending limit, while debit cards do
#10
What is the role of a financial advisor?
To manage daily expenses
To provide legal advice
To offer guidance on financial planning and investment strategies
To handle tax filings
#11
What is the concept of compound interest?
Interest calculated only on the initial principal
Interest calculated on both the initial principal and the accumulated interest
Interest deducted from the principal
Interest waived for a certain period
#12
What is the purpose of a 401(k) retirement account?
To provide health insurance during retirement
To facilitate international travel after retirement
To save and invest for retirement with tax advantages
To pay off mortgages after retirement
#13
In the context of investing, what is diversification?
Putting all investments into a single asset
Spreading investments across different assets to reduce risk
Investing only in real estate
Focusing on short-term gains only
#14
What is the purpose of a will in estate planning?
To distribute assets after death
To establish a trust fund
To determine tax liabilities
To manage daily expenses
#15
In the context of taxes, what is a deductible expense?
An expense that cannot be subtracted from taxable income
An expense that can be subtracted from taxable income, reducing the amount subject to taxation
An expense related to luxury items
An expense that only applies to business owners
#16
What is the purpose of the Federal Reserve in the United States?
To regulate international trade
To oversee environmental policies
To control the money supply and interest rates
To manage foreign relations