Final STUDY GUIDE- AFA

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What is the Rate of Return?

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The Rate of Return refers to the net gain or loss of an investment expressed as a percentage.

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What is a Savings Account?

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A Savings Account is a bank account that allows you to earn a small profit with zero risk of losing money.

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What is an Emergency Fund?

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An Emergency Fund is money set aside for unexpected expenses.

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How do you calculate the percentage of a down payment?

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To calculate the percentage of a down payment, use the formula: (Down Payment / Purchase Price) x 100.

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What does inflation mean for personal budgeting?

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Inflation means that your budget would become tighter, requiring you to cut back on spending.

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What are Opportunity Costs?

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Opportunity Costs refer to the potential benefits you miss out on when choosing one option over another.

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What is the purpose of Income Taxes?

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Income Taxes are levies imposed by governments on individuals' earnings to fund public services.

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What is a Certificate of Deposit (CD)?

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A Certificate of Deposit (CD) is a savings product that offers a fixed interest rate for a specified term.

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What is the difference between a Mutual Fund and a Savings Account?

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A Mutual Fund pools money from many investors to purchase securities, while a Savings Account is a deposit account that earns interest.

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What is the significance of understanding interest rates?

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Understanding interest rates is crucial for making informed decisions about loans, savings, and investments.