F.1 CES - Chapter 1.3 - Revision

Which of the following financial products are relatively risky?

• Time deposit

• Bonds

• Stocks

• Insurance

What are the risks of not being able to repay your debts?

• Lowering credit scores

• Leading to bankruptcy

• Causing stress

• Not being able to apply for credit cards in the future

What is meant by "Mortgage"?

• A mortgage is a loan secured by real estate.
• A mortgage is a government grant.
• A mortgage is a rental agreement.
• A mortgage is a type of insurance.

What is meant by "Overdraft"?

• An overdraft is a financial situation where a bank account balance goes below zero due to withdrawals exceeding available funds.
• A method of saving money in a bank account.
• A fee charged by banks for account maintenance.
• A type of loan that must be repaid immediately.

What is meant by "Insurance"?

• Insurance guarantees profit on investments.
• Insurance is a government program for free healthcare.
• Insurance is a contract that provides financial protection against risks.
• Insurance is a type of investment.

What is meant by "Credit cards"?

• Credit cards are a type of payment card that enables users to borrow money for purchases.
• Credit cards are a form of cash that does not require repayment.
• Credit cards are only used for online shopping.
• Credit cards are a type of loan that must be repaid with interest.

What is meant by "Stocks"?

• Stocks are shares that represent ownership in a company.
• Stocks are physical goods stored in a warehouse.
• Stocks are cash reserves held by a company.
• Stocks are government bonds.

What is meant by "Bonds"?

• Bonds are physical assets like real estate or machinery.
• Bonds are debt instruments used to raise capital, representing a loan made by an investor to a borrower.
• Bonds are short-term investments that guarantee high returns.
• Bonds are stocks that represent ownership in a company.

Which of the following factors need to be considering in "Borrowing"?

• Principal

• Interest rate

• Borrowing period

• Cost

What is meant by overspending?

• Overspending is investing in profitable ventures.
• Overspending is saving money for future use.
• Overspending is spending beyond one's financial means.
• Overspending is budgeting effectively for expenses.