CIL Financial Literacy Quiz Review 2

What type of credit allows you to borrow money up to a certain limit and only pay interest on the amount borrowed?

• Unsecured Credit

• Revolving Credit

• Installment Credit

• Collateralized Credit

Which investment option involves ownership of a fraction of a corporation?

• Bonds

• Stocks

• Annuity

• Mutual Funds

What is a common method to manage financial risk by spreading investments across various financial instruments?

• Premium

• Risk Retention

• Diversification

• Compounding

Which type of insurance policy is designed to cover costs associated with car accidents?

• Property Insurance

• Auto Insurance

• Health Insurance

• Life Insurance

What is the term used to describe the process of paying off a loan over time in regular installments?

• Compounding

• Amortization

• FAFSA

• Annuity