Building Wealth Exam

Investing is primarily a short-term strategy for quick profits.

• True

• False

Diversification is a key strategy for managing risk in investing.

• True

• False

Higher-risk investments always guarantee higher returns.

• True

• False

Compounding interest helps your money grow faster over time.

• True

• False

Investing is only for the wealthy.

• True

• False

The Rule of 72 is used to estimate:

• The time it takes for your investment to double.

• The interest rate you need to earn.

• The amount of money you need to invest.

• The risk level of an investment.

Which of the following is NOT a reason to invest?

• To achieve financial goals.

• To build wealth over time.

• To guarantee a high income.

• To fund retirement.

Investing always involves:

• High returns.

• Risk.

• Short-term gains.

• Guaranteed profits.

Which of the following is a critical component of wealth building?

• Saving money in a piggy bank.

• Spending all your income.

• Investing.

• Avoiding all financial risks.

Diversification means:

• Putting all your eggs in one basket.

• Investing in a variety of assets.

• Only investing in low-risk options.

• Avoiding the stock market.