WorksheetsFin Lit Mod 7-9 Review
Total questions: 35
Worksheet time: 18mins
Does this description match the Traditional IRA or the Roth IRA:
Don't pay taxes on initial investment, but you will have to pay taxes on your profits when you withdraw money in the future.
Traditional IRA
Roth IRA
Which type of retirement account often includes an employer match of employee contributions?
Traditional IRA
401K
Roth IRA
Pension
Which investment usually has less risk?
Bonds
Stocks
If Ralph invest $1000 dollars at 6% interest, how long will it take for his investment to double?
21
12
6
24
Earning interest on interest is called
Extra interest
Inflation interest
Simple interest
Compound interest
The "time value of money" means that
money paid out today is worth less than if the money is paid out in the future
money received today is worth more than the same amount of money received in the future
the more time a person has to save, the lower the return on the money
the longer money is held, the less likely it will be spent
Why shouldn't we invest our emergency fund or other short-term savings?
Investments are risky and can drop in value, especially in the short term.
Investments are safe and can grow in value, especially over the long term.
We should invest all of our money so it can grow quickly and we can become rich.
We should never invest any money because we could lose it all.
What is an emergency fund?
A savings account set aside for unexpected situations.
A way to invest for retirement.
Something most people don't need, because emergencies are rare.
An investment account that can grow over time.
This short phrase tells us that we should make sure saving and investing are the highest priority in our budget
Treat Yourself
Pay Yourself First
Pay Yourself Last
Money doesn't grow on trees
This investing strategy is short-term, higher-risk, and is often based on a hunch or opinion
speculation
diversification
401k
buy and hold
What does it mean to buy a stock or share?
Lending money to a company.
Own part of a company.
Owning a company's products.
Borrowing money from a company.
Which statement best describes how diversification impacts risk when you are investing?
Diversification means spreading your money across multiple investments, which decreases risk.
Diversification means spreading your money across multiple investments, which increases risk.
Diversification means putting all of your money into one investment, which decreases risk.
Diversification means putting all of your money into one investment, which increases risk.
Every driver in the US must have ______ insurance.
full coverage
comprehensive
liability
The type of insurance that pays all or part of your medical bills:
This type of insurance should pay for damages if a tree goes through your roof.
Product
Health
Homeowners
Life
The cost to the individual insured when an accident happens...
Premium
Deductible
George signed a document giving his wife permission to act on his behalf during his illness. Which term identifies the type of document George signed?
Common law
Power of attorney
Will
Trust
A DOCUMENT THAT IS SIGNED DURING YOUR LIFETIME THAT DISTRIBUTES YOUR PROPERTY UPON DEATH
WILL
POWER OF ATTORNEY
BEQUEST
TESTATE
A legal arrangement that transfers assets to a trustee, who then oversees and manages the assets on behalf of beneficiaries
trust
will
power of attorney
520 is considered a very good credit score.
true
false
Which company is NOT one of the 3 Credit Bureaus?
Equifax
Experian
Centurian
TransUnion
What is the most important factor in a credit score?
Types of credit
Payment History
Amount of debt
Inquires
A high credit score means you will get the highest interest rates when applying for a loan
True
False
Which of the following might request your credit report?
Insurance companies
Banks
Apartment Complex
All of the above
Which is not one of the 3 C's of Credit
Commission
Capacity
Character
Capital
__________ is the amount you borrow and __________ is the extra money you pay the bank for borrowing
principal, interest
interest, principal
interest, balance
balance, principal
I can avoid paying a PMI if I make a down payment of __________________ or more.
This is a visual representation of all the interest and principal paid over the life of the loan
Amortization
Allocation
Rotation
Collateral
Which of the following is NOT an advantage of renting
Invest in Real Estate
You can get a second mortgage on a home if your home is worth more than you owe on your first mortgage. This is called a:
Refinance
Home Equity Loan
Reverse Mortgage
Mortgage payments include:
interest
taxes
insurance
principal
