Copy of Extra Credit: Understanding the Importance of Financial Literacy

Income is which of the following?

• your salary - how you make your money

• it is the term for what you spend on entertainment

• it is the taxes you pay on your salary

• it is the term for investing money in the stock market

Do you have to make a lot of money to be financially literate?

• No

• Yes

Expenses are described as which of the following

• the taxes you pay on your salary

• the money going out - what you pay from your salary or for a good or service

• another term for investing in the stock market

• another term for international markets

What is the one financial activity every person should do with their money and investments?

• spend it recklessly

• spend it all at once

• create a budget to follow

• give it all to charity

Fixed expenses (rent, car payment, etc) needs to be lower than your income.

• TRUE

• FALSE

Which of the following rules should individuals follow to achieve a good balance of their finances?

• 80/10/10- 80% towards housing/bills, 10% towards saving and 10% towards entertainment

• 50/20/30 - 50% towards Housing/bills, 30% towards financial debt/savings and 20% towards entertainment

• 50/25/25 - 50% towards entertainment, 25% towards housing/bills and 25% savings

• 60/40/20: 60% savings, 40% housing/bills and 20% entertainment

Assets are described as which of the following

• the things you own - house, car, savings

• taxes you pay on luxury items

• payroll taxes

• another tern for rent

The suggestion is that even high school students should start doing which of the following to set a future of good financial habits?

• buying a house right out of high school

• investing in risky stocks

• purchasing a car right out of high school

• saving $5 to $10 a week; getting into the habit of doing this

Is it a smart move to make your savings account a fixed expense which comes directly from your checking account into your savings once you are paid?

• Yes

• No

Investing is smart however, you should do it in a smart way. If you purchase stock in a company which of the following is true?

• you are purchasing a mutual fund

• you are purchasing the entire company

• you are purchasing a piece of that company with the hopes of making a return on your investment

• you are now a member of the Securities and Exchange Commission