Financial Literacy Quiz

Anel and Olivia are discussing different types of insurance policies. Which type of insurance policy provides coverage for medical expenses and hospitalization?

• Life Insurance

• Health Insurance

• Auto Insurance

• Homeowners Insurance

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DOK Level 2: Skill/Concept

Ariana and Ty are discussing how to manage investment risk. How does diversification help in managing investment risk?

• By concentrating investments in a single asset class

• By spreading investments across various asset classes

• By investing only in high-risk assets

• By avoiding investments altogether

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DOK Level 2: Skill/Concept

Olivia made an investment with an annual interest rate of 5%, compounded annually. What will be the value of her $1,000 investment after 3 years?

• $1,150.00

• $1,157.63

• $1,200.00

• $1,250.00

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DOK Level 2: Skill/Concept

• 40%

• 50%

• 30%

• 25%

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DOK Level 2: Skill/Concept

Isaac and Olivia are discussing how inflation impacts the real return on their investments. How does inflation impact the real return on investments?

• It increases the real return

• It decreases the real return

• It has no effect on the real return

• It stabilizes the real return

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DOK Level 2: Skill/Concept

Emma and Isaac are discussing different types of insurance policies. Which type of insurance policy is specifically designed to provide financial protection against damage to a vehicle?

• Life Insurance

• Health Insurance

• Auto Insurance

• Homeowners Insurance

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DOK Level 2: Skill/Concept

Ariana and Kenyatta are discussing their investment strategies. What is the primary reason for an investor to diversify their portfolio?

• To maximize returns by investing in a single asset

• To minimize risk by spreading investments

• To avoid paying taxes

• To invest only in high-risk assets

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DOK Level 2: Skill/Concept

Isaac invested in a savings account with a nominal interest rate of 6%. If the inflation rate is 2%, what is the real interest rate?

• 8%

• 4%

• 6%

• 2%

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DOK Level 2: Skill/Concept

Jayelin buys a bond for $1,000 that pays an annual coupon of $50. If the bond is sold for $1,100 after one year, what is the total return on the investment?

• 10%

• 15%

• 5%

• 20%

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DOK Level 2: Skill/Concept

Isaac and Jayelin noticed that the prices of their favorite snacks have increased over the past year. How does inflation erode the purchasing power of money over time?

• By increasing the value of money

• By decreasing the value of money

• By stabilizing the value of money

• By having no effect on the value of money

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DOK Level 2: Skill/Concept