Compound interest is interest paid on interest previously earned. |
True |
It is important to build up your FICO score by taking out credit cards and car loans. |
False |
The purpose of insurance is to transfer risk. |
True |
Opportunity cost is the value of the option you chose to do. |
True |
It is not necessary to record debit card transactions in your check register because accounts are now online. |
False |
One of the most important factors to consider when choosing a career is income potential |
False |
Diversification is one of the many benefits of Mutual Funds. |
True |
According to Dave Ramsey, Baby Step 1 is $10,000 in an emergency fund. |
False |
A Roth IRA is used for retirement savings. |
True |
The Rule of 92 is a way to estimate the time or interest rate you’d need to double your money in an investment. |
False |
A written budget will help you identify how and where you spend your money. |
True. |
You are entitled to a free credit report once a year from each of the three major credit bureaus. |
False |
Don’t fund your 401(k) if your employer does not offer a match. |
… |
The higher the risk of the investment, typically the higher the return on that investment. |
True |
A credit card is an example of installment type of credit. |
True |
Discretionary income is the money people use to pay for the necessities of life. |
False |
A fixed rate, fixed term mortgage is a conventional type of mortgage. |
True |
Elasticity of demand indicates that when prices get lower, more people will buy the product. |
True |
Sally has an annual income of $90,000, net worth of $400,000 and expense of $94,000. She is insolvent. |
False |
Term life insurance costs far more than cash-value life insurance. |
False |
How I spend my money is a reflection of my values. |
True |
Money is the root of all evil. |
False |
Buying a home is always better than renting. |
False |
The one thing that God looks at to determine His trust for us is how we spend our money. |
False |
Bankruptcy is a “do over” when it comes to finances, with little (if any) negative consequences. |
False |
Lower monthly payments are better than higher monthly payments when it comes to a loan. |
False |
To be successful in negotiating, one must be willing to walk away from the deal. |
True |
The more liquid the investment, the more risk associated with the investment. |
False |
Credit can be used to own expensive products sooner. |
True |
Tax-exempted income is preferable to tax-deferred/sheltered income. |
True |
Earthquake insurance is covered under the standard homeowner’s insurance policy. |
False |
A budget surplus demonstrates that you are spending more than you make, relying on credit to make up the difference. |
False |
The preferred stage of the economic cycle is the contraction phase. |
False |
Life insurance proceeds are taxable to the beneficiary. |
False |
PMI – mortgage insurance is usually required when the down payment is less than 40%. |
False |
Maturity is learning to delay pleasure. |
True |
If you cut up your credit card, the account is effectively closed. |
False |
Liquidity is the speed and ease with which an asset can be converted to cash. |
True |
The goal of monetary asset management is to minimize interest earned to avoid having to pay taxes. |
False |
Inflation is defined as a steady rise in the general level of prices. |
True. |