Personal Finance 1

Which of the following is a way to invest in a business?

• Purchase publicly-traded stock

• Start your own business

• Invest in someone else’s business

• All of the above

The most basic life insurance is

• Universal Life

• Whole Term

• Term Life

• Whole Life

A bond pays

• Profit

• Dividend

• Interest

• Premium

An auto loan

• Is available for terms of 3, 4, 5, and 15 years

• Is an installment loan which is paid monthly

• Usually requires no collateral

• Can only be offered for a car sold at sticker price

Renters insurance covers the

• Rent Payment

• Renters Dwellings

• Renter's Belongings

• Deductible

A down payment

• Increases risk to lender

• Must be 30%

• Is portion of what borrower puts up front

• Is never more than $10,000

Something of value that is pledged as security for a loan is called

• a lien

• collateral

• principal

• dividend

A grace period is a period of time during which you can

• Pay off balance and not incur a finance charge

• apply for a loan

• Make down payment

• exceed your credit limit

The main trade-off that all investors must consider is

• Risk V. Return

• Income V. Cost

• Stocks V. Bonds

• Profit V. Return

Diversification is important in investing because

• It help you to balance your risk across different investment types

• It increases your overall risk, which guarantees that you will make more money.

• It ensures that you only make low-risk investments.

• It help you gain the highest rate of return despite any risks.