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WorksheetsAdulting 101 - Finance
Total questions: 20
Worksheet time: 13mins
ROI stands for ______________.
rate of interest
return of interest
return on investment
rate of investment
What is DCA or Dollar-Cost Averaging?
It's when you buy something more than once and then figure the average cost.
It's when you invest a pre-determined amount at a pre-determined time for a long period of time.
It's when you invest a certain dollar amount and compute the average price you paid after the purchase.
It's when you buy an asset with dollars before being converted into other assets.
What is Market Cap or Market Capitalization?
It's the total price of an asset class.
It's the price you pay for an asset.
It's the value of an asset before taxes.
It's the valuation of an asset.
What is the formula for computing Market Capitalization?
Total Supply X Market Price = Market Cap
Total Supply - Market Price = Market Cap
Market Price / Total Supply = Market Cap
Total Supply + Market Price = Market Cap
What does it mean "to diversify" or Diversification?
Putting all your eggs in one basket so that you don't have as much risk.
Not putting all your eggs in one basket because you can't decide what to invest in so you invest in many different assets.
Not putting all of your investments or money into one asset or asset class due to the risk of losing all of your money.
Diversification means to buy an asset consistently over a long period of time.
Before investing, it's good to implement the meaning of the phrase, "Bet on the Jockey - not the horse," because....
you never know which horse will win a horse race.
you never want to bet on just one investment.
it's important to know how good the product is and it's track record before investing.
it's important to know who the leader of the company is and his or her track record before investing.
When investing, what is Risk Tolerance and how does it relate to Volatility?
Risk Tolerance is being able to comfortably handle the ups and downs, or Volatility, of an investment.
Risk Tolerance means that the more risk there is, the less Volatility there is.
The more Risk Tolerance you have, the less Volatility you can handle.
The less Risk Tolerance you have, the more Volatility you can handle.
Which best describes what Passive Income is and an example of it.
Passive Income is the process of receiving income while performing a task. An example is working as a nurse or doctor.
Passive Income is the process of receiving income without physically performing a task in order to receive the income. An example is owning income producing real estate.
Passive income is also known as making money while you sleep which means that you get paid for sleeping on the job or while at work. An example is working the night shift and being able to sleep during your shift.
Passive income is the best type of income because you actively earn it. An example is buying and selling products online.
Rich Dad's Cash Flow Quadrant by Robert Kiyosaki has four quadrants, what are they?
Quadrants E - S - C - I
Quadrants B - E - S - D
Quadrants S - E - I - D
Quadrants E - S - B - I
What does each Cash Flow Quadrant letter stand for?
E for Employee - S for Sole Provider - I for Investor - B for Business Owner
S for Sole Provider - E for Employer - B for Buyer - I for Investing
E for Employee - S for Self-Employed - B for Business Owner - I for Investor
E for Employer - S for Self Motivated - B for Business Venture - I for Investing
Which quarter section of the Cash Flow Quadrant is the worst when it comes to taxes.
Investor
Business Owner
Self-employed
Employee
Which side of the Cash Flow Quadrant is best when it comes to taxes?
Right Side
Left Side
Both Right and Left Side
None of the above
Which side of the Cash Flow Quadrant offers the best opportunity for Passive Income?
Right Side
Left Side
Both the Right and Left Side
None of the above
The Rule of 72 is a mathematical formula that provides which of the following?
How to invest in assets
How to determine a ROI on your money
How to compute compound interest on your money
How many years it takes to double your money
The formula for the Rule of 72 is _______________________.
72 multiplied by price = number of years to double your investment
72 divided by investment amount = number of years to double your investment
72 multiplied by the variable annual growth rate = number of years to double your investment
72 divided by the fixed annual growth rate = number of years to double your investment
APR stands for ______________________.
Annual Price Rate
Annual Percentage Rate
Annual Percentage Return
Annual Price Return
APY stand for ___________________________.
Annual Price Yield
Allowed Price Yeild
Annual Percentage Yield
Allowed Percentage Yield
Annual Percentage Rate (APR) is the cost you pay each year to borrow money, including fees, expressed as a percentage.
True
False
The annual percentage yield (APY) is the real rate of return earned on a savings deposit or investment taking into account the effect of compounding interest.
Think APY = amount paid to you.
True
False
What does "Pay Yourself First" mean as it relates to budgeting and/or investing?
Pay yourself first and invest for keeping up with a budget
Pay yourself first and invest every time you stay under your budget
Pay yourself first and invest every time you get paid from your job.
Pay yourself first and invest every time you go shopping.
