Mastering Financial Vocabulary and Investments

What is the primary purpose of a financial advisor?

• To manage a company's investments.

• To sell insurance products exclusively.

• To provide tax preparation services.

• To provide financial guidance and planning.

Which of the following is considered a liquid asset?

• Real estate

• Stocks

• Bonds

• Cash

What does it mean to live within a budget?

• Living within a budget requires borrowing money to cover expenses.

• To live within a budget means to spend less than or equal to your income.

• To live within a budget means to spend freely without limits.

• It means to ignore all financial constraints and enjoy life.

Tags

CCSS.RI.11-12.4

CCSS.RI.7.4

CCSS.RI.8.4

CCSS.RI.9-10.4

CCSS.RI.9-10.4

What is the difference between stocks and mutual funds?

• Mutual funds are only for retirement accounts.

• Stocks are safer than mutual funds.

• Stocks are individual company shares; mutual funds are pooled investments in a diversified portfolio.

• Stocks are always more profitable than mutual funds.

How does a mortgage work?

• A mortgage is a type of insurance for homeowners.

• A mortgage is a rental agreement for commercial spaces.

• A mortgage is a government grant for buying property.

• A mortgage is a loan to buy property, secured by the property itself.

What is the significance of a credit card statement?

• It is only used for tracking rewards points.

• It is a legal document for loan applications.

• The significance of a credit card statement is to provide a detailed record of transactions and help manage finances.

• It serves as a promotional tool for credit card companies.

Tags

CCSS.RI.11-12.4

CCSS.RI.7.4

CCSS.RI.8.4

CCSS.RI.9-10.4

CCSS.RI.9-10.4

What is fiscal policy?

• Fiscal policy is the government's approach to managing the economy through spending and taxation.

• Fiscal policy is the strategy used by businesses to maximize profits.

• Fiscal policy is the central bank's method of controlling inflation.

• Fiscal policy refers to the regulation of interest rates by the government.

What are the risks associated with investing in the stock market?

• Political risk

• Market risk, liquidity risk, credit risk, interest rate risk, and management risk.

• Inflation risk

• Currency risk

How can an entrepreneur benefit from financial planning?

• Entrepreneurs benefit from financial planning by improving resource allocation, forecasting, cash flow management, and risk preparation.

• Elimination of all business risks

• Increased personal wealth without planning

• Guaranteed success in all ventures

What is the role of interest in loans and investments?

• Interest is a fee paid only by borrowers to the bank.

• Interest is solely a tax imposed by the government on loans.

• Interest compensates lenders for risk in loans and provides returns on capital in investments.

• Interest has no impact on the profitability of investments.