NGPF Investing: Quiz Review

What is a primary use of a savings account?

• A savings account is useful for building an emergency fund.

• A savings account is primarily used for daily transactions.

• A savings account is meant for long-term investments.

• A savings account is used to pay off debts.

What are stocks?

• Stocks are shares of ownership in a company.

• Stocks are loans made to a company.

• Stocks are a type of bond.

• Stocks are a form of currency.

What is inflation?

• Inflation is the increase in the general price level of goods and services.

• Inflation is the decrease in the value of currency over time.

• Inflation is the rise in unemployment rates in an economy.

• Inflation is the increase in the production of goods and services.

What is an asset?

• An asset is anything of value or a resource owned by an individual or entity.

• An asset is a type of liability that must be paid off.

• An asset is a financial obligation that an individual or entity owes.

• An asset is a temporary resource that loses value over time.

What is a liability?

• A financial asset that generates income.

• A financial obligation or debt owed to another party.

• A type of investment that increases in value.

• A legal document that outlines a contract.

What is the relationship between risk and return in investing?

• Higher risk indicates higher potential return.

• Higher risk guarantees higher returns.

• Lower risk leads to higher returns.

• Risk and return are unrelated.

What is compound interest?

• Interest calculated only on the initial principal amount.

• Interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods.

• A type of interest that is not calculated on previous interest.

• Interest that is paid only at the end of the loan term.

What is the definition of wealth?

• Wealth is defined as Income + Expenses.

• Wealth is defined as Assets + Liabilities.

• Wealth is defined as Assets - Debts.

• Wealth is defined as Savings + Investments.

What is a financial goal?

• A financial goal is a specific objective to be achieved through financial planning and management.

• A financial goal is an amount of money saved for emergencies.

• A financial goal is a type of investment strategy.

• A financial goal is a method of budgeting expenses.

What is a retirement account?

• A type of savings account for everyday expenses.

• A financial account that is specifically designed to hold funds for retirement.

• An investment account for purchasing stocks and bonds.

• A checking account used for regular transactions.