RTSWS Intro. Quiz

What is the primary purpose of an emergency fund?

• To earn interest on savings

• To cover unexpected expenses

• To invest in the stock market

• To pay off long-term debts

What is a key feature of a savings account compared to a checking account?

• It is used for daily transactions

• It typically earns little to no interest

• It is used for long-term savings and earns interest

• It allows for unlimited withdrawals

How does compounding interest benefit your savings?

• It decreases the amount of interest earned over time

• It allows you to earn interest on your interest

• It prevents you from accessing your savings

• It immediately doubles your savings

What is the main difference between a credit card and a debit card?

• A credit card withdraws money directly from your checking account

• A debit card allows you to borrow money from the card issuer

• A credit card allows you to borrow money from the card issuer

• A debit card earns interest on transactions

How can you build good credit?

• By making on-time payments

• By applying for multiple credit cards at once

• By carrying high balances on credit cards

• By avoiding all forms of credit

What is one major difference between stocks and bonds?

• Stocks represent ownership in a company

• Bonds represent ownership in a company

• Stocks provide a fixed return

• Bonds are used for daily transactions

What is the purpose of having an emergency fund instead of relying on credit cards for unexpected expenses?

• To avoid paying interest on borrowed money

• To earn rewards points

• To reduce the number of credit inquiries

• To increase your credit limit