Money Lessons Quiz

What is a common misconception about people who appear wealthy?

• They are always financially secure.

• They might not actually be wealthy.

• They never use credit.

• They often live below their means.

What is the 'lump sum splurge' phenomenon?

• Saving all your money for a big purchase.

• Spending a large windfall as if it were regular income.

• Investing a large sum in stocks.

• Paying off all debts at once.

Why is it important to keep your credit utilization under 30%?

• To avoid paying high interest rates.

• To improve your credit score.

• To increase your spending power.

• To qualify for more credit cards.

What is a suggested reason for buying Bitcoin?

• To make quick profits.

• To replace all other investments.

• To hedge against traditional currency.

• To avoid taxes.

What is the recommended strategy for knowing how much money is enough?

• Always aim to earn more than your peers.

• Calculate 25 times your annual expenses.

• Save as much as possible without a specific goal.

• Invest in high-risk stocks.

Why should you automate your savings?

• To qualify for loans.

• To avoid spending all available money.

• To earn more interest.

• To increase your credit score.

What is the benefit of choosing low expense ratios in investments?

• Higher potential returns over time.

• Immediate high profits.

• Guaranteed returns.

• Increased investment options.

How is making money similar to building a muscle?

• It is a natural talent.

• It gets easier with practice and experience.

• It is only possible for some people.

• It requires no effort.

What is the role of diversification in investing?

• To avoid all risks.

• To protect against market volatility.

• To focus on a single stock.

• To maximize short-term gains.

Why is leverage important in making money?

• It is only useful for experienced investors.

• It increases potential returns with more capital.

• It reduces investment risks.

• It guarantees profits.