WorksheetsDon't Wait to Get Started
Total questions: 74
Worksheet time: 37mins
Fill in the blank: One of the keys to financial success is to ________ a financial plan.
make
ignore
delay
forget
Fill in the blank: One of the keys to financial success is to create a ________.
budget
party
painting
garden
Fill in the blank: One of the keys to financial success is to start saving and investing as soon as you’ve paid off your ________.
debts
taxes
bills
loans
What is one thing you might want to save and invest for?
a car
a sandwich
a pencil
a napkin
What is one thing you might want to save and invest for?
an education
a cup of coffee
a single-use pen
a paperclip
What is one thing you might want to save and invest for?
a comfortable social life
a broken pencil
yesterday's lunch
an empty box
What is one thing you might want to save and invest for?
emergencies
daily snacks
movie tickets
video games
What is one thing you might want to save and invest for?
periods of unemployment
buying candy every day
going to the movies every weekend
eating out for every meal
What is one thing you might want to save and invest for?
your future goals
a daily cup of coffee
impulse shopping
random internet memes
Which of the following is an example of a financial goal with a target time for achievement?
Save $10,000 for a car within 2 years.
List your top 5 financial goals and the time by when you want to achieve each.
Describe your financial habits in detail.
Explain the importance of budgeting.
According to the passage, if your assets are larger than your liabilities, do you have a positive or negative net worth?
Positive net worth
Negative net worth
If you have a negative net worth, you should:
Work to reduce your debts and increase your assets.
Ignore the situation and hope it improves.
Take on more loans to cover expenses.
Spend more money to boost your lifestyle.
According to the passage, what is the next step to keep track of your income and expenses every month?
Write down what you earn, and then your monthly expenses.
Spend money without tracking it.
Only keep receipts for large purchases.
Estimate your expenses at the end of the year.
What does the advice 'pay yourself first' mean according to the passage?
It means to save and invest by setting aside money for yourself before spending on anything else.
It means to always pay your bills before saving any money.
It means to spend money on entertainment before anything else.
It means to borrow money before you start saving.
Allowing your bank to automatically remove money from your paycheck and deposit it into a savings or investment account can help you save more easily.
True
False
If you are spending all your income and never have money to save or invest, what should you do according to the passage?
Look for ways to cut back on your expenses.
Start spending more on luxury items.
Ignore your financial situation and continue as usual.
Borrow more money to cover your expenses.
According to the passage 'Small Savings Add Up to Big Money,' how much would you spend in a year if you buy a bottle of soda every day for $2.00?
$365.00
$500.00
$730.00
$1,000.00
If you saved $730.00 for one year and put it into an investment that earns 5% a year, how much would it grow to after 5 years?
$931.69
$850.00
$765.00
$1,000.00
What is the power of 'compounding' as described in the passage 'Small Savings Add Up to Big Money'?
With compounding, you earn interest on the money you save and on the interest that money earns, so even a small amount saved can add up to big money over time.
Compounding means you only earn interest on your initial savings, not on the interest earned.
Compounding is a way to lose money quickly by saving less.
Compounding only works if you save very large amounts of money at once.
According to the passage, making a rule to wait 24 hours before buying something on impulse can help you save money.
True
False
According to the passage, what is one way to save money from your daily routine?
Empty your pockets and wallet of spare change at the end of each day and put that money aside.
Buy expensive coffee every morning.
Go shopping for new clothes every week.
Eat out at restaurants for every meal.
According to the passage, what is the wisest thing you can do if you owe money on your credit cards?
Pay off the balance in full as quickly as possible.
Ignore the debt and hope it goes away.
Only pay the minimum amount due each month.
Take out more credit cards to pay off the old ones.
Which of the following is NOT a tip for avoiding credit card debt mentioned in the passage?
Put away the plastic
Know what you owe
Pay off the card with the lowest rate
Pay off the card with the highest rate
Fill in the blank: Most credit cards charge high interest rates—as much as ___ percent or more—if you don’t pay off your balance in full each month.
18
5
10
25
The passage suggests that you should use a credit card only if your debt is at a manageable level and you know you’ll have the money to pay the bill when it arrives.
True
False
According to the passage, what are the two basic ways to make money?
1. You work for money. 2. Your money works for you.
1. You save all your money. 2. You never spend.
1. You borrow money. 2. You lend money.
1. You invest in gold. 2. You invest in real estate.
Fill in the blank: Someone pays you to work for them or you have your own business. This means ________.
You work for money.
You work for free.
You work for fun only.
You work for charity.
Fill in the blank: You take your money and you save or invest it. This means ________.
Your money works for you.
You lose your money.
You spend all your money.
You have less money.
How can your money work for you?
By earning a steady paycheck
By being spent on daily expenses
By increasing in value over time
By being kept under your mattress
When your money earns money, it may earn a steady paycheck or pay you interest or dividends.
True
False
What is an example given in the passage of something you might buy with your money that could increase in value over time?
Comic books
Groceries
Bus tickets
Bottled water
Your money can both earn a steady paycheck and increase in value at the same time by:
Investing in assets that pay regular income and appreciate over time
Keeping all your money in a checking account
Spending all your earnings immediately
Only saving cash under your mattress
According to the passage, what is a key difference between saving and investing?
Saving always earns more money than investing
Investing is always safer than saving
Saving is usually safer but earns less, while investing has more risk but can earn more
Saving is not federally insured
Fill in the blank: Savings products include savings accounts, checking accounts, and _________.
certificates of deposit
credit cards
auto loans
mortgages
True or False: The money you invest in securities, mutual funds, and other similar investments is typically federally insured.
True
False
What is one reason people put money into savings products, according to the passage?
To earn the highest possible return
To cover emergencies like sudden unemployment
To avoid paying taxes
To invest in stocks
Fill in the blank: If you leave all your money in a savings account for a long time and the interest it earns doesn’t keep up with _______, your money may lose value.
inflation
taxes
spending
savings
According to the passage, what could happen to your principal when you invest?
It is guaranteed to grow
It is federally insured
You could lose it
It is always safe
Match the following types of products to their correct category (Savings or Investments):
Savings
Savings accounts
Investments
Bonds
Savings
Certificates of deposit
Investments
Stocks
Savings
Checking accounts
Which of the following is NOT a type of investment product listed in the table?
A. Bonds
B. Stocks
C. Checking accounts
D. Real estate
According to the passage, what is important to understand before investing in stocks, bonds, or mutual funds?
It is important to understand that you could lose some or all of your money in any one investment.
You are guaranteed to make a profit in every investment.
Stocks, bonds, and mutual funds are risk-free investments.
You should only invest in stocks, not bonds or mutual funds.
The stock market has historically provided around 10% annual returns over the long term.
True
False
How long did it take for the stock market to return to its 1929 peak after the crash?
Over 20 years
5 years
10 years
15 years
What is the strategy called where investors spread their money among various investments to protect against risk?
Diversification
Speculation
Concentration
Arbitrage
What does the investment strategy of 'diversification' mean?
Diversification means not putting all your eggs in one basket, or spreading your investments across different assets to reduce risk.
Diversification means investing only in one type of asset to maximize returns.
Diversification means avoiding all forms of investment to eliminate risk.
Diversification means borrowing money to invest in high-risk assets.
Which of the following is NOT mentioned as an investment product in the passage?
A) Stocks
B) Real estate
C) Bond mutual funds
D) U.S. Treasury securities
Diversification guarantees that your investments will not lose value if the market drops.
True
False
According to the passage, what should you consider when deciding what are the best investments for you?
You should consider when you will need the money, your goals, and if you will be able to sleep at night if you purchase a risky investment.
You should only consider the investment with the highest return, regardless of your needs.
You should invest in whatever your friends are investing in.
You should only invest in government bonds, as they are always the best option.
What is a common mistake people make when investing for the long term, according to the passage?
A common mistake is putting money they will not need for a very long time in investments that pay a low amount of interest.
A common mistake is investing only in high-risk stocks for short-term gains.
A common mistake is withdrawing money from investments too frequently.
A common mistake is never reviewing or adjusting their investment portfolio.
If you are saving for a short-term goal, such as buying a car in five years or less, what type of investment should you avoid according to the passage?
You should avoid risky investments because you may have to sell at a loss if the value drops when you need the money.
You should avoid savings accounts because they offer low interest rates.
You should avoid government bonds because they are too safe.
You should avoid certificates of deposit because they have fixed terms.
What is an investment?
Giving your money to a company or enterprise hoping it will be successful and pay you back with more money
Spending money on goods and services
Saving money in a piggy bank
Donating money to charity
According to the passage, what do many companies offer investors the opportunity to buy?
Cars and houses
Stocks and bonds
Computers and laptops
Gold and silver
Fill in the blank: If you buy the stock, you take on the risk of potentially losing a portion or all of your ______ investment if the company does poorly or the stock market drops in value.
initial
monthly
future
guaranteed
If you buy the stock, what do you become in the company?
An owner of the company
A customer of the company
A manager of the company
A creditor of the company
What is the interest rate paid twice a year on the bonds offered by the computer company in the example?
2%
3%
4%
6%
According to the passage, what is one advantage of buying stock over bonds?
You may see the stock increase in value beyond what you could earn from the bonds.
Stocks always pay higher interest than bonds.
Stocks are guaranteed to never lose value.
Bonds cannot be sold once purchased.
An investor might feel confident about buying bonds from the computer company in the example because:
the company is financially stable and likely to repay its debts.
the company has a history of missing payments.
the company operates in a declining industry.
the company has recently declared bankruptcy.
What is one main difference between stocks and bonds?
Stocks promise to return money plus interest, while bonds may pay dividends.
Stocks may go up in value and pay dividends, while bonds promise to return money plus interest.
Stocks are risk-free, while bonds are risky.
Bonds pay dividends, while stocks pay interest.
Fill in the blank: If the company goes bankrupt, your money may be lost, but if there is any money left, you will be paid before _________
stockholders
employees
creditors
managers
Which of the following is a risk of investing in stocks?
The company may do poorly, and you’ll lose a portion or all of your investment.
The company promises to return your money plus interest.
You will always make money.
You are paid before stockholders if the company goes bankrupt.
You can potentially make money in an investment in a company if:
The company performs better than its competitors.
Other investors recognize it’s a good company.
The company makes profits to pay you interest or dividends.
All of the above.
You can lose money if consumers don’t want to buy the company’s products or services.
True
False
Which of the following is a risk mentioned for investors in a company?
The company's officers mismanage the business and spend too much money.
The company always makes a profit.
The market is always up.
The company never faces fraud.
What is a mutual fund or ETF? Fill in the blank: A mutual fund or ETF is a pool of money run by a professional or group of professionals called the _________?
investment adviser.
accountant.
shareholder.
auditor.
Investors in mutual funds or ETFs may pay a fee when they buy or sell their shares in the fund.
True
False
What do investment advisers do in a managed fund?
Pick the stocks or bonds of companies and put them into a fund.
Only invest in one company.
Avoid investigating companies.
Set the prices of all stocks.
According to the passage, why is it important to look carefully at how much a fund costs before investing?
Because even small fees can add up and eat into a significant chunk of the returns a fund is likely to produce.
Because funds with higher costs always perform better than those with lower costs.
Because the cost of a fund determines how quickly you can withdraw your money.
Because looking at costs is the only way to predict future market trends.
What is an index fund?
A fund that tries to pick and choose stocks of individual companies
A fund that seeks to equal the returns of a major stock market index
A fund with the highest annual fees
A fund that guarantees no risk
The fees for index mutual funds and ETFs are generally higher than the fees for managed funds.
True
False
Fill in the blank: Historical data shows that index funds have, primarily because of their ________, enjoyed higher returns than the average managed fund.
lower fees
higher risk
active management
complex strategies
Like any investment, index funds involve risk.
True
False
According to the passage, what is 'high turnover' in the context of investment funds?
A) Trading quickly in and out of stocks
B) Holding stocks for a long period
C) Avoiding taxes on profits
D) Investing only in bonds
What does turnover in a fund create, as mentioned in the passage?
Taxable capital gains
Tax-free income
Losses for shareholders
Higher dividends
Fill in the blank: All funds are now mandated by the SEC to show both their ______ and after-tax returns.
before-
gross-
net-
estimated-
