A Trivia Quiz On The Fundamentals Of Business
- 1.
An Asset is?
- A.
Something that loses money
- B.
Something you own
- C.
Something You owe
- D.
Something that makes you money
Correct Answer
B. Something you ownExplanation
An asset refers to something that an individual or a company owns. It can be a tangible item, such as property or equipment, or an intangible item, such as patents or trademarks. Assets are considered valuable and are typically expected to generate future economic benefits for the owner.Rate this question:
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- 2.
A Portfolio is:
- A.
The record the credit card company keeps on your payments
- B.
The collection of your investments
- C.
The record the insurance company keep on your claim
Correct Answer
B. The collection of your investmentsExplanation
A portfolio refers to the collection of investments that an individual or entity holds. It typically includes a variety of financial assets such as stocks, bonds, mutual funds, and other securities. The purpose of maintaining a portfolio is to diversify investments and potentially earn a return on investment. By having a mix of different types of assets, individuals can spread out their risk and increase their chances of achieving their financial goals.Rate this question:
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- 3.
The one characteristic all businesses share is:
- A.
They all have employees
- B.
They all make a profit
- C.
They all try to solve a problems
- D.
They all pay taxes
Correct Answer
A. They all have employeesExplanation
The one characteristic all businesses share is that they all have employees. Employees are an essential component of any business as they help in the day-to-day operations, contribute to the production or delivery of goods and services, and play a crucial role in the overall success of the business. Without employees, it would be challenging for a business to function effectively and achieve its goals. Therefore, the presence of employees is a common characteristic shared by all businesses.Rate this question:
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- 4.
A financial advisor is best used for:
- A.
Helping you get rich quick
- B.
Creating a plan and seeing you stick to it
- C.
Gauging where the economy is headed
Correct Answer
B. Creating a plan and seeing you stick to itExplanation
A financial advisor is best used for creating a plan and helping you stick to it because they have the expertise and knowledge to analyze your financial situation, set realistic goals, and develop a comprehensive plan to achieve those goals. They can provide guidance on budgeting, saving, investing, and managing debt. Additionally, they can monitor your progress, make adjustments as needed, and hold you accountable to stay on track towards your financial objectives. Ultimately, their role is to provide ongoing support and guidance to ensure you make informed financial decisions and achieve long-term financial success.Rate this question:
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- 5.
One of the easiest places to cut back on your spending is:
- A.
Rent
- B.
Your Daily Routines
- C.
Mortgage Payments
- D.
Student Loan Payments
Correct Answer
B. Your Daily RoutinesExplanation
Cutting back on daily routines can be an effective way to reduce spending because these routines often involve small, regular expenses that can add up over time. By examining and potentially eliminating unnecessary expenses like eating out, buying coffee, or subscribing to multiple streaming services, individuals can save a significant amount of money. Additionally, making small changes to daily habits, such as reducing energy usage or finding free alternatives for entertainment, can also contribute to cost savings.Rate this question:
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- 6.
What is Good Debt:
- A.
Is only good if there is no debt at all
- B.
Is incurred for a goal
- C.
Is borrowed for a long time so you have plenty of time to pay it back
Correct Answer
B. Is incurred for a goalExplanation
Good debt is incurred for a goal. This means that borrowing money is considered good if it is done with a specific purpose in mind, such as investing in education, starting a business, or buying a home. Unlike bad debt, which is incurred for unnecessary or frivolous expenses, good debt is seen as an investment that can potentially generate future returns or improve one's financial situation.Rate this question:
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- 7.
When shopping for a car, the two most important things to consider are:
- A.
Safety and Price
- B.
Financing and Service
- C.
Fuel efficiency and warranty
- D.
Time of Year and reputation of dealer
Correct Answer
A. Safety and PriceExplanation
When shopping for a car, safety and price are the two most important factors to consider. Safety should always be a priority when choosing a car, as it directly affects the well-being of the driver and passengers. Price is also crucial because it determines affordability and long-term financial commitment. By considering both safety and price, car shoppers can make a well-informed decision that balances their budget and the safety features they desire.Rate this question:
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- 8.
Trading in your old car is usually:
- A.
A good deal because the state gives a tax deduction on trade ins
- B.
A good deal because the dealer give you more than what you could sell it
- C.
A bad deal because there is a 10% tax penalty on trade ins
- D.
A bad deal because the dealer give you less than what you could sell it for
Correct Answer
D. A bad deal because the dealer give you less than what you could sell it forExplanation
Trading in your old car is usually a bad deal because the dealer typically offers you less money for your car than what you could sell it for privately. Dealers need to make a profit when reselling the car, so they will offer you a lower price to ensure they can sell it at a higher price later. Selling your car privately allows you to negotiate a higher price and potentially get more money for your old car.Rate this question:
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- 9.
You pay taxes:
- A.
All year
- B.
Once a year in April
- C.
At the end of the year in December
- D.
At the beginning of the year in January
Correct Answer
A. All yearExplanation
Paying taxes "all year" means that taxes are deducted from your income throughout the year, typically through regular paycheck deductions. This is the most common method of tax payment, where a portion of your earnings is automatically withheld and sent to the government as taxes.Rate this question:
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- 10.
Inflation:
- A.
Increases your purchase power
- B.
Erodes your purchase power
- C.
Increases your taxes
- D.
Deceases your taxes
Correct Answer
B. Erodes your purchase powerExplanation
Inflation erodes your purchasing power because it causes the general price level of goods and services to rise over time. This means that the same amount of money will buy fewer goods and services in the future. As prices increase, the value of money decreases, making it more difficult to afford the same standard of living. Therefore, inflation reduces the amount of goods and services that can be purchased with a given amount of money, ultimately eroding purchasing power.Rate this question:
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- 11.
A company goes "public" in order to
- A.
Increase brand awareness
- B.
Raise Money
- C.
Qualify for government loans
Correct Answer
B. Raise MoneyExplanation
When a company goes "public," it means that it sells its shares to the general public through an initial public offering (IPO). This allows the company to raise money by selling ownership stakes in the business to investors. Going public is a way for companies to access a larger pool of capital and raise funds for various purposes such as expanding operations, investing in research and development, paying off debts, or acquiring other companies. By selling shares to the public, the company can generate significant funds that can be used to fuel growth and meet financial objectives.Rate this question:
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- 12.
The most drawbacks to retirement account are:
- A.
You can't get the earning out until you reach 59 1/2
- B.
You cannot buy stock with them
- C.
They only apply to people with incomes above $100,000
Correct Answer
A. You can't get the earning out until you reach 59 1/2Explanation
The correct answer is that you can't get the earnings out until you reach 59 1/2. This is a drawback because it restricts access to the funds in the retirement account until a certain age, limiting the ability to use the earnings for other purposes such as emergencies or large expenses.Rate this question:
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- 13.
If you take out the money you contribute to your 401(k) out before age 59 1/2 and you do not meet any of the exceptions, then:
- A.
No taxes are owed if you've been in the plan for least five years
- B.
You don't pay income tax but you do pay a 10% penalty
- C.
You will pay regular income tax on the money you withdraw
- D.
You will pay regular income tax plus a 10% penalty on the money you withdraw
Correct Answer
D. You will pay regular income tax plus a 10% penalty on the money you withdrawExplanation
If you take out the money you contribute to your 401(k) before age 59 1/2 and you do not meet any exceptions, you will have to pay regular income tax on the money you withdraw. In addition to the income tax, you will also incur a 10% penalty on the withdrawn amount. This penalty is imposed as an additional consequence for early withdrawal from the retirement account.Rate this question:
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- 14.
You should sell an investment:
- A.
When unemployment starts to rise
- B.
When inflation starts to rise
- C.
When your original reason for buying it no longer apply
- D.
When interest rates start to rise
Correct Answer
C. When your original reason for buying it no longer applyExplanation
When your original reason for buying an investment no longer applies, it is advisable to sell it. This is because the investment was initially purchased with a specific goal or purpose in mind. If that goal or purpose is no longer relevant or achievable, it would be wise to sell the investment and redirect the funds towards something more aligned with the current financial objectives.Rate this question:
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- 15.
A mortgage is:
- A.
An agreement attached to a property as collateral for a loan
- B.
A loan one obtain to purchase a home
- C.
a legal process by which a bank takes a person's house due to lack of payment
Correct Answer
A. An agreement attached to a property as collateral for a loanExplanation
A mortgage is an agreement attached to a property as collateral for a loan. This means that when someone takes out a mortgage to purchase a property, the property itself becomes the collateral for the loan. If the borrower fails to repay the loan, the lender has the right to take ownership of the property through a legal process. Therefore, a mortgage is not just a loan to purchase a home, but also a binding agreement that secures the loan with the property.Rate this question:
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- 16.
A Prenuptial agreement:
- A.
It's worth considering for all couples
- B.
Really only benefits rich people
- C.
Cost so much money it's not worth setting up
- D.
Really benefits couples were one spouse is much wealthier than the other
Correct Answer
A. It's worth considering for all couplesExplanation
A prenuptial agreement is worth considering for all couples because it allows them to establish financial expectations and protect their individual assets in the event of a divorce. Regardless of wealth, a prenup can provide clarity and fairness in the division of assets, debts, and spousal support. It can help couples have open and honest conversations about money and prevent potential conflicts in the future. Therefore, it is beneficial for all couples to consider a prenuptial agreement as a way to protect their interests and ensure a smoother process in case of a separation.Rate this question:
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- 17.
The average cost of a wedding is:
- A.
More than $20,000
- B.
Less than $5000
- C.
Between $5000-$10,000
- D.
Between $10,000-$20,000
Correct Answer
A. More than $20,000Explanation
The correct answer is "More than $20,000" because weddings are generally expensive events that involve various costs such as venue rental, catering, decorations, attire, and more. These expenses can quickly add up, resulting in an average cost that exceeds $20,000.Rate this question:
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- 18.
Buying life insurance for your child:
- A.
Is a bad idea because your child probably doesn't have an income, without income a person does not need life insurance
- B.
Is a good idea because your current policy probably doesn't cover your child
- C.
Is a bad idea because your current policy probably covers your child
Correct Answer
A. Is a bad idea because your child probably doesn't have an income, without income a person does not need life insuranceExplanation
Buying life insurance for a child is generally considered a bad idea because children typically do not have an income that needs to be replaced in the event of their death. Life insurance is typically purchased to provide financial support for dependents in case the insured person passes away. Since children do not have dependents or financial responsibilities, they do not typically need life insurance. Therefore, it is not necessary to buy life insurance for a child who does not have an income.Rate this question:
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- 19.
When buying insurance, it's a smart idea to first ask yourself:
- A.
Does my existing policy already cover it?
- B.
How much are the premiums?
- C.
Can I get a better rate with a higher deductible?
- D.
Can I get a discount if I buy two policies from the same company
Correct Answer
A. Does my existing policy already cover it?Explanation
It is important to ask yourself if your existing policy already covers the insurance you are considering buying because it may save you from purchasing duplicate coverage and paying unnecessary premiums. By reviewing your existing policy, you can determine if the insurance you need is already included or if you need to make any adjustments to your current coverage. This can help you avoid overlapping coverage and potentially save money in the long run.Rate this question:
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- 20.
When financial planning for yourself and your family:
- A.
It is often best to start a trust fund
- B.
It's best to open up a 401(k)
- C.
It's best to take money out of your retirement plan
- D.
It's best to organize your own personal financial life, because the best tax breaks are available to you and not your family
Correct Answer
D. It's best to organize your own personal financial life, because the best tax breaks are available to you and not your familyExplanation
When financial planning for yourself and your family, it is best to organize your own personal financial life because the best tax breaks are available to you and not your family. This means that by managing your own finances, you can take advantage of tax deductions and credits that are specific to your individual circumstances. By organizing your personal finances, you can optimize your tax planning strategies and potentially reduce your overall tax liability.Rate this question:
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- 21.
An Asset is:
- A.
Something that loses money
- B.
Something you own
- C.
Something You owe
- D.
Something that makes you money
Correct Answer
B. Something you ownExplanation
An asset is something that you own. It is a valuable resource or property that has economic value and can be utilized to generate future benefits or income. Assets can include physical possessions like real estate, vehicles, or equipment, as well as intangible assets like patents, copyrights, or investments. Owning assets can contribute to one's financial stability and wealth accumulation.Rate this question:
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Current Version
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Mar 21, 2023Quiz Edited by
ProProfs Editorial Team -
Jan 30, 2011Quiz Created by
DrHutch40
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