Financial Literacy for Young People

What is the term for the increase in the value of an investment over time?

• Depreciation

• Appreciation

• Amortization

• Inflation

How can compound interest benefit your savings over time?

• It reduces your debt

• It increases the interest rate

• It earns interest on both the principal and the accumulated interest

• It only applies to short-term savings

Which of the following is considered a short-term financial goal?

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What is the first step in creating a budget?

• Investing in stocks

• Setting Financial Goals

• Ignoring spending habits

• Tracking income and expenses

What does ROI stand for when we talking about Investments?

• Return on Investment

• Revenue from operations

• Risk of inflation

• Rate of income

What is the primary purpose of a financial plan?

• To avoid investing

• To create a roadmap for achieving financial goals

• To achieve short-term goals only

• To limit spending

Select two examples of a variable monthly expense?

• Rent or Mortgage

• Groceries

• Entertainment

Which of the following is an example of a fixed expense?

• Dining out

• Entertainment

• Mortgage

• Groceries

What is the purpose of diversifying an investment portfolio?

• To concentrate risk in a single asset

• To avoid investments altogether

• To guarantee high returns

• To minimize risk by spreading investments across different assets

Why is it important to understand the concept of inflation in financial planning?

• Inflation erodes the purchasing power of money over time

• Inflation has no impact on financial planning

• Inflation only affects short-term financial goals

• Inflation increases the value of savings