Investing and Credit Fundamentals Quiz

What is a common type of investment that represents ownership in a company?

• Bond

• Stock

• Real Estate

• Mutual Fund

Which of the following is a factor that affects your credit score?

• Age

• Employment Status

• Payment History

• Marital Status

What is the primary purpose of a credit card?

• To save money

• To earn interest

• To borrow money for purchases

• To invest in stocks

Explain how diversification can reduce investment risk.

• By investing in a single asset

• By spreading investments across various assets

• By investing only in high-risk stocks

• By keeping all money in a savings account

What is the impact of paying only the minimum payment on a credit card balance?

• It reduces the balance to zero

• It incurs no interest charges

• It increases the total interest paid over time

• It improves your credit score

Compare the terms of a personal loan and a payday loan.

• Personal loans have higher interest rates than payday loans

• Payday loans have longer repayment terms than personal loans

• Personal loans typically have lower interest rates and longer repayment terms than payday loans

• Both have the same interest rates and repayment terms

Why is it important to have a good credit score?

• It determines your eligibility for student loans

• It affects your ability to rent an apartment, buy a car, or get a mortgage

• It increases the amount of money you can borrow from friends

• It decreases the amount of taxes you owe

Why is it important to have an emergency fund?

• To cover unexpected expenses without going into debt

• To spend on vacations and luxury items

• To invest in the stock market

• To lend money to friends

What does APR stand for?

• Annual Percentage Rate

• Automatic Payment Requirement

• Asset Protection Ratio

• Annual Payback Rate

Which of the following categories does a loan typically fall under?

• Healthcare services
• Entertainment solutions
• Financial services
• Educational programs
• Transportation systems