Financial Literacy

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

• True

• False

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

• True

• False

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

• True

• False

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

• True

• False

Which of the following options is NOT an example of how to use a credit card responsibly?

• 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.

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?

• transportation

• savings

• utilities

• housing

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.

Which of these statements best describes a situation where compound interest is working FOR 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 for you.

• Both situations are describing compound interest working for you.

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

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

• Pay off any and all debt you have from loans, credit cards, family, etc.

• Build wealth by investing 15% of all income you earn.

• Go to college and major in something that pays really well.

When dealing in debt, payments scheduled for a fixed amount of time and tied to something tangible of value are most commonly associated with which of these types of debt?

CHOOSE ALL THAT APPLY – CAN CHOOSE MORE THAN ONE!

• secured

• unsecured

• installment

• revolving