NTMY 2

• What is the primary purpose of a budget?

• • a) To track your friends' spending habits.

• • b) To plan how you will spend and save your money.

• • c) To invest in the stock market.

Which of the following is a common benefit of saving money in an emergency fund?

• a) It allows you to buy luxury items whenever you want.

• b) It provides a financial cushion for unexpected expenses like medical bills or job loss.

• c) It guarantees you a higher credit score.

What does "interest" generally refer to when you borrow money from a bank?

• a) The extra money you pay back to the lender in addition to the original amount borrowed.

• b) The bank's curiosity about your financial history.

• c) A discount you receive for paying on time.

Which of these is considered a good debt?

• a) Credit card debt for impulse purchases.

• b) A loan taken out for a lavish vacation.

• c) A mortgage for a primary residence.

What is the significance of a credit score?

• a) It determines how many friends you have.

• b) It's a numerical representation of your creditworthiness, influencing your ability to borrow money.

• c) It's a measure of your academic achievements.

Which of the following is an example of a financial asset?

• a) Corporate bonds

• b) A house you own.

• c) Building.

What is the concept of "diversification" important for in investing?

• a) To put all your money into one type of investment.

• b) To spread your investments across different assets to reduce risk.

• c) To only invest in companies you know personally.

What is the largest stock market exchange in the world by market capitalization?

• Nasdaq

• The London Stock Exchange

• The New York Stock Exchange

What is the primary goal of financial management in a corporation?

• A. To maximize sales revenue.

• B. To minimize expenses and operational costs.

• C. To maximize shareholder wealth.

What is the concept of 'compounding' in finance?

• A. Earning interest only on the initial principal amount.

• B. Earning returns on both the initial investment and on the accumulated interest from previous periods.

• C. The process of frequently buying and selling assets to generate quick profits.