Test Your Financial Knowledge!
Are you a financial genius? Take this quiz to see if your head is just filled with financial terms and concepts!
- 1.What is a Certificate of Deposit?
- A.
Percentage of the principal amount that is paid as an interest for the use of money
- B.
Promises the depositor the sum back along with appropriate interest.
- C.
Interest that is compounded on a sum of money that is deposited for a long time.
- D.
All of the above
- 2.What is a secured loan?
- A.
Clearing the current loan with the proceeds of a new one and using the same property for collateral
- B.
A loan for which the interest rate remains constant and fixed throughout the lifetime of the loan.
- C.
A loan which is backed by a pledging of real or personal property (collateral) by the borrower to the lender.
- D.
All of the above
- 3.The following are examples of earned income: wages, salaries, tips, commissions, and bonuses.
- A.
True
- B.
False
- 4.Interest is a charge that is paid by any borrower or debtor for the use of money, which is calculated on the basis of the rate of interest, time period of the debt and the principal amount that was borrowed.
- A.
True
- B.
False
- 5.What financial term is calculated by dividing the total financing costs associated with a loan divided by the principal amount?
- A.
Annual percentage rate (APR)
- B.
Debt to income ratio
- C.
An adjustable rate
- D.
All of the above
- 6.What does amortization mean?
- A.
The amount of interest owed to a lender
- B.
The process of liquidating a debt over a period of time
- C.
The process of determining the fair market value of an asset
- D.
All of the above
- 7.What is a balloon payment?
- A.
Bridge loan
- B.
Payment for party balloons
- C.
A lump-sum payment at a maturity of a balloon loan
- D.
Decrease in value of an asset over time
- 8.What does appreciation mean?
- A.
A certificate of debt
- B.
A short-term loan made until a longer term financing is obtained
- C.
Current assets
- D.
The measure of a continued rise in the worth of an asset
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