WorksheetsNew PFLE unit 2 Flash card review
Total questions: 20
Worksheet time: 10mins
Imagine you're a financial wizard like Priya or Daniel! The magical mantra "pay yourself first" in personal finance means:
Prioritizing personal expenses over bill payments
Setting aside savings before spending on other expenses
Paying off all debts before saving any money
Investing in high-risk stocks for quick returns
Imagine you're in a classroom with Mia, Abigail, and James discussing investments. Which of the statements below BEST describes the relationship between risk and return when considering an investment?
a. Investors expect to earn a lower return when they invest in a high risk asset.
b. Investors expect to earn a higher return when they invest in a low risk asset.
c. Investors expect to earn a higher return when they invest in a high risk asset.
What is the primary purpose of an emergency fund?
To invest in high-risk stocks
To cover unexpected expenses
To pay off long-term debt
To purchase luxury items
Which typically has fixed interest payments?
Stocks
Bonds
Mutual funds
Real estate
Imagine you're on a thrilling adventure with Arjun and Charlotte, exploring the world of investments! Why is it crucial to understand your risk tolerance before diving into this financial journey?
It helps you decide if you want to participate in your employer’s match program for your 401(k)
It is recommended that people with a low risk tolerance should NOT invest at all.
If you have a high risk tolerance, you may be eligible for lower fees since you won’t care if your portfolio drastically loses value.
You should tailor your investment portfolio so that it assumes an amount of risk you are comfortable with.
Imagine you're on a quest to become a savings wizard! Which of the following strategies would Isla, Daniel, and Henry use to master the art of personal saving?
Wait until the end of the month and save whatever is left in your checking account.
Save a certain percentage of each paycheck and deposit it directly into a savings account.
Cover all of your wants and needs and save whatever is left over.
Take out a payday loan so you can save before you receive your paycheck.
What is a benefit of a bank account?
High returns
Ownership in companies
FDIC insurance
Voting rights in corporations
A money market account is a.
An investment in foreign currencies
A high-risk investment option
A type of checking account with no restrictions
A savings account with check-writing privileges and higher interest rates
Why is diversification a recommended investment strategy?
Investing in a diversified portfolio guarantees that you won’t lose money with your investments.
If you tell your fund manager to use diversification, they’ll charge you lower fees.
Diversifying your portfolio helps reduce risk.
If you diversify your portfolio, you will definitely earn a high return.
Arjun and Sophia are discussing the stock market. Can you help them figure out what the term "bull market" refers to?
A market in decline.
A market showing sustained increase in stock prices.
A market dominated by bearish investors.
A market where stocks are traded for animals.
Which of the following is a key difference between a bank and a credit union?
Only banks offer checking accounts
Credit unions are for-profit institutions
Banks are owned by their customers
Credit unions are owned by their members
What is an advantage of bonds?
Ownership in a company
Voting rights for a corporation’s board of directors
Predictable income stream
Highest potential returns
Avery and Abigail are discussing financial terms. Can you help them out? What term describes individuals who do not have an account with a bank or similar financial institution?
Underbanked
Financially excluded
Unbanked
Credit-challenged
Rohan and Arjun are discussing their investment strategies. What is a potential downside of investing in stocks that they should consider?
Too safe
No potential for growth
Market volatility
Imagine you're in a finance class with Anika, Benjamin, and Mia. The teacher asks: Which of these typically offers the highest returns?
Savings account
Bonds
Checking account
Stocks
Isla and Avery are on a financial adventure! Which of the following transactions will make their checking account balance drop IMMEDIATELY?
Isla writes her monthly rent check, planning to mail it tomorrow.
Avery uses her debit card to pay for groceries at the supermarket.
Isla uses her credit card to buy school books.
Avery deposits a check at a local bank branch.
Sophia and Grace are chatting about their future plans. Sophia asks, "When do you think is the BEST time to start saving for retirement?"
As soon as you have your first full-time job.
Right after you pay off your student loans.
Once you are debt-free, including paying off all credit cards, auto loans, and your mortgage.
At age 45, so you have exactly 30 years until retirement.
Liam and Maya are discussing their investment strategies. What is the primary benefit of having a diversified investment portfolio?
It guarantees high returns.
It reduces risk by spreading investments across various assets.
It focuses on a single asset class for maximum growth.
It eliminates all investment risks.
What is a bond?
A type of stock
A loan to a company
A savings account
An ownership share
Michael and Evelyn are discussing their savings options. What is a common feature of a certificate of deposit (CD) that they should consider?
High liquidity with no penalties for early withdrawal.
Fixed interest rate for a specified term.
Variable interest rate based on market conditions.
Unlimited check-writing privileges.
