Exam 1 Review (Budgeting, Saving & Investing)

Evelyn, Noah, and Zoe are discussing their financial plans. They want to know the recommended amount to save for an emergency fund. What is the suggested amount?

• 1-2 months worth of expenses

• 3-6 months worth of expenses

• 7-9 months worth of expenses

• 10-12 months worth of expenses

Priya and Michael attended a financial seminar. They learned about two key habits to building wealth. What are those habits?

• Budgeting and saving

• Investing and spending

• Borrowing and spending

• Earning and spending

Why does Robert's rich dad say poor and rich are mindsets?

• Because poor people have less money than rich people

• Because poor people have a negative mindset while rich people have a positive mindset

• Because poor people are lazy while rich people are hardworking

• Because poor people are unlucky while rich people are lucky

What is the first lesson in the book?

• Work hard and save money

• Invest in the stock market

• Don't work for money, make money work for you

• Get a good education and find a high-paying job

Priya, Rohan, and Scarlett are discussing the role of fear in their financial decisions. According to them, what role does fear play in making money?

• Priya believes that fear motivates them to make more money

• Rohan thinks that fear prevents them from making money

• Scarlett says that fear has no impact on their ability to make money

• They all agree that fear only affects poor people

What is a stock market index?

• A measurement of a section of the stock market

• A type of stock that represents part ownership in a company

• A financial market that trades shares of ownership of public companies

• A security that offers fixed income payments in retirement

Zoe is considering investing in a fixed annuity. What would be the purpose of this investment for her?

• To provide Zoe with low, guaranteed rates of interest

• To vary in value based on the performance of mutual funds

• To increase Zoe's wealth over time for long-term financial goals

• To trade shares of ownership of public companies

Olivia wants to invest in a liquid asset. What type of investment is she looking for?

• An asset that can be easily bought or sold

• A list of her investments

• A tax-advantaged investing account

• A distribution from the net profits of a company to its shareholders

What is the key to financial independence?

• winning the lottery

• saving and investing wisely

• spending all your money

• ignoring financial planning

Priya wants to build wealth for her future. What is the recommended way for her to achieve this goal?

• Saving, investing, and increasing income

• Borrowing money

• Spending all her money

• Winning the lottery