WorksheetsUnit 1 Test
Total questions: 30
Worksheet time: 3600secs
Inner values are best described as:
Beliefs about how money should be used
Personal morals and beliefs that guide decisions
The desire to fit in with others
The physical items you want to own
Buying the newest iPhone because your friends all have one is an example of:
Inner values
Physical values
Social values
Financial values
Financial values are important because they:
Decide what career you will have
Shape long-term money habits like saving or investing
Help you make friends
Tell you how much something is worth in dollars
True or False: Family, peers, culture, and media are all areas of influence on financial decisions.
True
False
Loss aversion means:
People love taking risks with money
People fear losing money more than they value gaining it
People ignore the risks when investing
People always make logical financial choices
Hedonic adaptation means:
People always value new things more than old ones
People stop appreciating something once they get used to it
People avoid losses at all costs
People believe happiness from money lasts forever
What do we assess to make choices based on what we value as important?
Our time, energy, and money
Our hobbies and interests
Our friends and family
Our future goals
Which of the following is an example of physical values?
Following your friends' spending habits
Saving money for the future
Believing in honesty and kindness
Wanting to own the latest laptop
True or False: Overconfidence bias can cause people to underestimate financial risks.
False
True
How many types of "life values" can impact your habits around money?
Two
Four
Five
Seven
Social values include our desire for belonging with which of the following groups?
Competitors and rivals
Strangers and tourists
Family members and coworkers
Customers and clients
What is a characteristic of someone with strong financial values?
They often ignore the sustainability of their money.
They think more about the sustainability of their money and have more in reserve.
They are less prepared for financial emergencies.
They spend impulsively without considering future needs.
Which of the following are areas of influence for Inner Values? Select all that apply
Need for personal space
Desire for freedom and independence
Desire to be alone or with others
Appreciation of art and fashion
Which of the following are areas of influence for Physical Values? Select all that apply
Desire for pleasure and comfort
Desire for freedom and independence
Degree to which we are satisfied and fulfilled by material possessions
Bargain hunting and getting a good deal
How do judgments based on your values affect your behavior?
They make you spend more.
They make you less decisive.
They reveal patterns specific to you.
They lead to impulsive decisions.
How can social media impact financial decisions?
It can lead to impulsive buying due to targeted ads.
It has no effect on financial decisions.
It always helps in making better financial decisions.
It guarantees financial success.
Cognitive bias is…
An error in the way we think that can influence our decisions
The desire to seek out information that confirms our existing beliefs
The belief that our abilities are better than they actually are
The concept of placing more value on an item when we own it
What is a strategy to manage the influence of FOMO when faced with spending choices?
Always buy the latest products
Spend without planning
Follow all trends
Compare needs versus wants
What are cognitive biases primarily used for in our brains?
To slow down decision-making
To serve as mental shortcuts
To create systematic errors
To rely on actual facts
Why do cognitive biases not rely on actual facts?
They are based on perceptions and observations
They are always accurate
They are designed to be factual
They enhance logical reasoning
Which of the following is a sign of cognitive bias?
Ignoring evidence that contradicts beliefs
Making decisions based on logic alone
Always seeking new information
Being open to all perspectives
What is the cognitive bias where people value something more highly simply because they own it?
FOMO
Endowment Effect
Hedonic Adaptation
Overconfidence
Behavioral economics…
Is a field of economics that studies people who make rational and objective decisions.
Analyzes how different economies around the world behave over time.
Tracks and examines stock market trends over a certain period of time
Combines economics and psychology to study why people behave the way they do in the real world
You go to a restaurant and order a big meal. Even though you’re full, you keep eating because it was expensive. This is an example of...
Mental Accounting
The Sunk Cost Fallacy
Fear of Missing Out
The Endowment Effect
Naresh started a new job and is having some of his paycheck deposited directly into a savings account. Which of the following values BEST explains why Naresh does this on a regular basis?
Inner
Social
Physical
Financial
You overhear your friend Ginny say, "I made a budget for myself in my personal finance class and used my values to decide how I want to use my money." What does Ginny mean by this?
Ginny used the value of her bank account balance to decide how to use her money
Ginny asked her friends and family for advice to decide how to use her money
Ginny followed recommendations she saw on social media to decide how to use her money
Ginny identified what is important to her and used that knowledge to decide how to use her money
What are social values, as they pertain to money?
How you, personally, care and think about finances
How your family, friends, and community members impact your feelings about money
How companies and advertisement make you feel about money
How banks and other financial institutions treat you and your money
Which of the following is TRUE about cognitive biases?
It is easy to recognize when cognitive biases are influencing our own decisions
There is rarely anything you can do to combat a cognitive bias’ influence
There are only a handful of cognitive biases that exist
Awareness is often the first step to overcoming the influence of a cognitive bias
Andrew wants to buy a specific model of a new car. He conducts research and finds many resources that highlight the benefits of that car model.
Which cognitive bias might be influencing Andrew’s decision making?
Confirmation Bias
Hedonic Adaptation
The Sunk Cost Fallacy
Overconfidence
Mina wants to start using an investment app that all of her friends are raving about. She hasn’t done any research on the app, but she trusts her friends’ judgment. At home, Mina’s mom points out that Mina is being influenced by FOMO and herd mentality.
All of the following are things Mina can do to overcome these cognitive biases EXCEPT…
Take time to reflect and identify why she is so eager to use the app
Watch a positive video about the app, download the app, and start using it that day
Ask people outside her friend group for their opinions and perspectives
Seek out reviews that talk about the disadvantages of using the app
