| 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. |
