What do you know about personal finance? Would you like to put your knowledge to the test? Personal finance is a term that covers budgeting your money as well as savings and investing. It involves banking, insurance, mortgages, investment, retirement preparation, and tax and estate organizing. The term often refers to the all-inclusive industry that provides financial services. Try this quiz and see how much you know about personal finance.
Most millionaires are celebrities or professional athletes.
Most millionaires work over 40 hours per week.
Most millionaires inherit their fortune or win the lottery.
Most millionaires drive new Cadillacs instead of used Fords.
True
False
We can only get free lunches on Tuesdays.
Only parents can get free lunches.
Lunches go on sale occasionally.
There is no such thing as a free lunch.
The next best alternative that isn’t chosen.
The price of a natural resource.
Goods used to produce other goods and services.
Funding for human capital.
Making impulse purchases.
Dropping out of school to work and make money.
Saving money early in life, and making responsible financial decisions with the money you don’t save.
Using credit to buy things you can’t afford to pay for.
True
False
Net pay is savings plus deductions.
Net pay is gross pay minus deductions.
Net pay is gross pay minus savings.
Net pay is savings plus expenses.
$350
$310
$225
$200
Federal income tax
State income tax
FICA
Charity
Saving early allows compound interest to work to your advantage, because your interest earns more interest.
People who save early earn higher interest rates on credit cards.
Saving is easy when you’re young.
It’s harder to save when you’re older, because you make less money.
Time
Weather
Rate of Return
Investment Size
Risk is the rule of determining how long it takes money to double at a particular rate of return.
Risk is shares of ownership in a corporation.
Risk is a reward that influences choices.
Risk is the chance that you might not get your money back.
True
False
The amount you earn when you use your credit card.
A deduction from your monthly credit card payment.
The compensation the lender expects to receive for extending credit to you.
The spending limit set by the lender.
Low risk loans usually carry high interest rates.
Risk doesn’t influence the interest rate.
High risk loans usually carry high interest rates.
High risk loans usually carry low interest rates.
You shouldn’t; it’s not important.
Because you could find a better annual percentage rate (APR) and pay less annual fees.
Because you want an APR of 40 to 50%.
Because you want a short grace period.
True
False
True
False
It means you pay variable expenses before you pay fixed expenses.
It means you pay all of your bills before you put money into savings.
It means you use a credit card to treat yourself before you pay your bills.
It means you set aside money for savings before you spend money.
True
False
True
False
True
False
It means your liabilities are greater than your assets.
It means your savings are less than your bills.
It means your assets are greater than your liabilities.
It means your assets are less than you liabilities.
True
False