9- Compound interest allows you to______________?

Earn interest on the original deposit plus interest earned

Earn interest on your original deposit only

Pay interest for borrowing money

What is the first basic principle of investing?

Wait to invest until after college

Don’t invest – it is too risky

Always invest for the short term

Financial advisors are available to you in case

Need help and advise on investing

Before you invest money, you need to be aware of

That higher risk equals higher returns

That lower risk equals lower returns

When investing in the stock market, it is best to

Invest your money in a number of different stocks

Invest all your money in one stock

Invest money in companies you know nothing about

Choose the item that best represents what a mutual fund is.

A collection of different stocks to minimize risk

A way for someone with a smaller amount of money to invest in the stock market without having to buy all of one stock

It has a particular strategy of investment

23- Does gender impact auto insurance premiums?

Yes. Men tend to have more accidents and pay higher premiums.

People under 25 years of age pay higher premiums.

Yes. The more one drives, the more likely an accident may occur. The rates typically rise when vehicles are driven more than 7,500 miles per year.

Yes. Married people, statistically speaking, have fewer auto accidents and pay lower premiums.

The payment you receive is based on the replacement cost of an item minus depreciation

A list or other documentation of personal belongings, with purchase dates and cost information

A claim settlement method in which the insured receives the full cost of repairing or replacing a damaged or lost item

Provides payment to others if a member of the insured household accidentally causes harm to other people or property.

Possessions such as jewelry, furniture, and boats

Careless neglect, often resulting in injury

Creating a budget can make you feel powerful! Why?

A budget puts you in control of your spending and saving, so you make good decisions and feel more confident

People who budget earn more money, so they can live a better life

You can't really budget unless you have an important job, which means that other people look up to you

Budgeting is extremely easy, so once you set it up, you are done for good and can spend time on other things

The two main portions of a budget are...

the money coming in (income) and the money you're spending (expenses)

the money coming in (expenses) and the money you're spending (income)

the cash you are spending in stores and the bills you are paying online

the items you want to buy and the money you need to save for retirement

Why is it important to be able to decide if an item is a NEED or a WANT?

When you budget, you should make sure all your needs are met first, then you can decide to spend on wants

Needs are worth spending money on, but you should never spend on a want

Needs can be very expensive, but wants are usually far less expensive so you don't need to keep track of them

You cannot create a budget that has both needs and wants included -- you need them each in a separate budget

Ethan is considering updating his cell phone plan to include unlimited data. In which situation could unlimited data be a NEED for Ethan?

He has an hour-long bus ride each direction to and from school, and he needs that time to complete homework and submit it all online

He loves watching movies, and he's already paid for all the streaming services, so now he needs the data

Unlimited data will allow him to play video games with his friends even when he's not at home, and he LOVES video games

He has so many social media accounts, and he needs to be able to check them throughout the day, even while in school

Marsha is trying to determine if an item at the mall is a NEED or a WANT. Which question will be most helpful?

Will something bad happen if I don't have this item?

Do any of my friends have this item?

How happy will this item make me?

Will my teachers be excited if I buy this item, or will they be disappointed?

Justine's part-time job pays her 8 euros per hour. She works for 10 hours this pay period. How much is her gross pay?

80 euros, minus any taxes she has to pay

80 euros, plus any taxes she has to pay

Why should you use your NET pay when creating a budget?

Your net pay is a more accurate picture of how much money you have available to spend or save

Your net pay will always be higher, so you'll have more money to spend

Your employer knows what your gross pay is, but you only know what your net pay is

Once you have your net pay, you can figure out how much to deduct in taxes, and then you can do your budget

Kylie plans on using the 50/30/20 rule for budgeting. How will she split her budget?

50% needs, 30% wants, 20% savings

50% budget, 30% needs, 20% wants

50% saving, 30% needs, 20% wants

50 euros needs, 30 euros wants, 20 euros savings

What does it mean to "pay yourself first"?

Any time you get paid, set aside some portion to save before you do any spending

On payday, take some money out to reward yourself with some fun spending

Save money when you are young so you can spend more money when you are older

Spend money on yourself first, then your immediate family, then friends or other relatives

What is the financial benefit of compound interest?

When you earn compound interest, you earn interest on both the principal and any interest you've already earned

The interest rates banks offer for compound accounts are always higher than for simple accounts

When earning compound interest, you don't accumulate as many bank fees

When you earn compound interest, you earn interest ONLY on the principal

What is a key difference between saving and investing?

Saving is setting aside money you don't spend now for emergencies or for a future purchase and Investing is buying assets such as stocks, bonds, mutual funds

Saving is for long-term goals; investing is for short-term goals

Saving earns a much higher rate of return than investing your money

Saving earns compound interest while investing earns simple interest

Select the best definition of compound interest.

Compound interest is earning interest on the original amount you deposited plus any interest earned.

Compound interest is earning interest on the original amount you deposited.

Compound interest is the amount of interest you are charged on your bank account each month.

Compound interest is earning a fixed dollar amount on your bank account each month.

A stock is a share of ownership in a company.

A stock is a lending investment to the government or a company.

A stock is an insured bank account with high risk.

A stock is a type of investment that uses money from investors to purchase many different investment types.

Duncan plans to invest all of his money in individual stocks. Why is this likely a bad investment strategy?

Purchasing individual stocks has a high amount of risk and little diversification.

He will need a large amount of money to invest in individual stocks.

Purchasing individual stocks has a very low amount of risk and a low return.

He will need to open multiple brokerage accounts for each stock he purchases.

Select the best definition of an insurance premium.

Your insurance premium is the amount of money you pay for the insurance policy.

Your insurance premium is the amount you pay out-of-pocket if a loss occurs.

Your insurance premium is the amount you pay only when you need to use your insurance.

Your insurance premium is the level of insurance coverage you have.

Why is it important for you to understand YOUR risk tolerance before you start investing?

You should create an investment portfolio that includes an amount of risk you are comfortable with.

it is recommended that people with a low risk tolerance shouldn't invest at all.

If you have a high risk tolerance, you will likely pay less in investment fees.

You must be willing to take a high amount of risk to begin investing.

Consumer Education - Final Exam Review

9th - 12th Grade

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Jose Fernandez

Used 36+ times

FREE Resource

Bodily injury for all the people in an accident that involves at least four people.

Property damage for the person at fault

Bodily damage for a single person in an accident that is not at fault

Property damage for the person not at fault in an accident

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Comprehensive insurance covers what kind of damage to an automobile?

Only repairs needed due to a collision with another automobile

Damage caused due to a collision with an animal

Damage caused by a tree that falls on the car

Only b & c

None of the above

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the three types of savings accounts requires you to agree to the money being deposited for a specified period of time?

Regular savings

Money market account

Certificate of deposit

Mutual funds

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Companies are now required to offer private health insurance plans to employees. *

Comprehensive automobile insurance is required when you finance a car.

House insurance will help cover the cost of fixing damage to a house caused natural disasters.

It is wise to get multiple quotes for any type of insurance to compare coverage and cost.

The fist number of liability coverage (50/100/25) indicates that what is insured for $50,000?

Comprehensive insurance covers what kind of damage to an automobile?

Which of the three types of savings accounts requires you to agree to the money being deposited for a specified period of time?

Which of the three types of savings accounts typically requires you to maintain a minimum balance?

9- Compound interest allows you to______________?

What is the first basic principle of investing?

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