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WorksheetsFinancial Literacy
Total questions: 20
Worksheet time: 10mins
What is saving?
Accumulation of excess funds by intentionally spending less than you make
Cash set aside to cover the cost of unexpected events
A monetary asset that contributes to your net worth
Money available today that is worth more if received in the future
What is emergency savings?
Transferring money into your savings before you pay your bills
Original amount of money saved or invested
Cash set aside to cover the cost of unexpected events
Maximizing your return by selling stocks at a higher price than what you paid for
When is an item considered an asset?
While you are making monthly payments on time
Converting an asset into cash
When cash is used for emergencies
When it is fully paid off and can be sold for cash
How much money should you save for emergencies?
2 months worth of expenses
6 months worth of expenses
Cash in whatever stocks you have to pay for an emergency
As a neighbor for a loan if needed
How does time effect money?
The more money you save the more you will make
Saving for a short period of time proves long term investments
The longer you save your money the more you will make
What is investing?
Possibility that an investment will fail to pay the expected return
Money invested is usually used to pay for long-term goals
Assets purchased with the goal of providing additional income from the asset itself but with the risk of loss
The danger that money won’t be worth as much in the future as it is today.
Stocks are:
A share of ownership in a company
Organization pays interest to the lender
Form of lending to a company or the government
A specified time in the future when the principal amount of the bond is repaid to the bondholder
What is a bond?
A share of profits distributed in cash to stockholders
A share of ownership in a company
When an organization pays interest to the lender (purchaser) until the maturity date is reached
A Form of lending to a company or the government
Investments are important to building:
For emergencies
For your future net worth
A trade-off to higher returns is lower liquidity and higher risk
Tax-advantaged investments
Money invested is usually used to pay to:
Achieve long-term goals
For emergencies
To purchase expensive items
To pay off loans
Which is not part of a checking account?
ATM card
Checks
Stocks
Online bill pay
What is a check?
An automated teller machine
A plastic card that requires a pin number and is attached to your bank account
A form of savings
Pre-printed form of payment that is attached to you bank account
Which is not a positive aspect of using a debit card:
Opens your account to credit fraud
Its small and convenient to use
Allows you to carry less cash
Allots for overspending
When does overdraft occur?
When liquidity occurs
When stocks are sold at a high price then it was bought for
When your withdrawal from a bank account exceeds the available balance
When you purchase an item on credit
What does electronic banking do?
Acts as a debit card when you purchase an item
Gives you ownership of a company
Does not allow you to pay bills from your bank account
Gives people access to bank accounts and cash in a fast and paperless way
What is the highest credit score you can achieve?
800
1000
850
550
Which is NOT a credit agency that calculates your credit score?
Experian
Federal Reserve
Trans Union
Equifax
What is credit?
Receiving goods and services now and paying for them later
The process of depositing money into your savings the day you receive it so you have savings later
Having ownership of a company based on how many stocks you have bought
Accumulating money each month for emergencies
When is interest paid?
When the company you have bought stock in has earned you a profit
When you borrow money from a lender and they charge you for the convenience of giving you a line of credit
When you put money into your savings
When you over withdrawal in your bank account and you are charged a fee
If managed properly, having credit can:
Decrease your credit score and allow you to purchase more on credit if you pay it back
Give you an edge over people who are applying for the same job as you
Allow you to receive discounts on hotels and travel
Increase your credit score and allow you to purchase items on credit
