Financial Literacy

Front

Most of the time, the higher the risk of an investment the higher the potential return.

Back

True

Front

The more liquid [available] an investment is, the more likely it is to have a higher return.

Back

False

Front

Even when people use credit cards “responsibly” they typically spend more than those paying in cash.

Back

True

Front

The more you diversify your savings and investments, the lower your risk is of losing money.

Back

True

Front

Which of the following options is NOT an example of how to use a credit card responsibly?
Options:
Only use them for things you were already going to buy, and that you can afford.
Always pay off your balance in full each month.
Read the fine print on anything you sign.
Pay your minimum payment until your entire balance is paid off regardless of the balance.

Back

Pay your minimum payment until your entire balance is paid off regardless of the balance.

Front

When trying to establish your monthly budget, which of these categories is allotted the highest percentage over all other categories, but still should be around 25-35% of your net income? Options: transportation, savings, utilities, housing

Back

savings

Front

Which of these statements best describes a situation where compound interest is working AGAINST you? Taking out a 30-year mortgage to purchase your new home. Investing your retirement savings in a mutual fund through your 401(k). Neither of these situations is describing compound interest working against you. Both situations are describing compound interest working against you.

Back

Taking out a 30-year mortgage to purchase your new home.

Front

Which of these statements best describes a situation where compound interest is working FOR you?
Options:
Taking out a 30-year mortgage to purchase your new home.
Investing your retirement savings in a mutual fund through your 401(k).
Neither of these situations is describing compound interest working for you.
Both situations are describing compound interest working for you.

Back

Investing your retirement savings in a mutual fund through your 401(k).

Front

The first step you should take when it comes to saving and investing is:

Back

Build up an emergency fund of either $500 or $1,000 depending on your income.

Front

In order to really see a big return on your investment through compound interest, it is recommended to invest wisely ____________.

Back

long-term over 30+ years in a mutual fund.