UGBA 135 PERSONAL FINANCE QUIZ QUESTIONS
1. What is not a major Credit Bureau?- Answers - Moody's
2. Which factors directly affect your credit score?- Answers - All choices directly attect credit score
3. Which factor has the largest direct impact on your credit score?- Answers - Payment
history
4. In the video "Prioritizing Savings" which of the following do I NOT recom-
mend?- Answers - Save first for your children's education, ten for your own retirement
5. Lenders use credit reports to help them decide whether to loan you money and
what interest rate to charge- Answers - True
6. If you buy a company's stock...- Answers - you own a part of the company
7. If you buy a company's bond...- Answers - you have lent money to the company
8. If a company files for bankruptcy, which of the following securities is most at risk of
becoming virtually worthless?- Answers - The company's stock
9. Holding a diversified portfolio of stocks rather than an undiversified portfo- lio-
Answers - increases the likelihood that you will own at least one stock that performs poorly
10. Svi Bodie invests in- Answers - inflation protected U.S. bonds
11. Asset allocation refers to deciding which individual stocks to buy- Answers - False
12. In most cases, as people approach retirement age, it is recommended that they
increase the percentage of their financial investments held in stocks and decrease
the percentage held in bonds- Answers - False
13. Most target date funds decrease their allocation to stocks over time- Answers -
True
14. Benjamin Graham recommended holding no more than 75% of one's port- folio
in stocks and no less than 25% in gold- Answers - False
15. It is harder to predict which sports team will win a game than which sports team
1/
16
,will beat the spread- Answers - False
16. If the market drops 30%, it is certain to recover during the next year- Answers -
False
17. Investments with higher risk always have higher expected returns- Answers -
False
18. Most individual investors who trade commodities are simply speculating- Answers -
True
19. The retirement portfolio of most people in the U.S. should include a 10%
allocation in gold- Answers - False
20. Which of the following is a good use of a security fund (also called an
emergency fund or a rainy day fund)?- Answers - To help you pay your bills if you lose
your jobs
21. Most people's emergency (security or rainy day) fund should be invested in the
stock market- Answers - False
2/
16
, 22. Should most people save first for retirement or for their children's educa- tion?-
Answers - Their retirement
23. Suppose you put $100 in a bank savings account that pays 7% annual interest (and
charges no annual fee). You keep that money in the account for two year (with no
withdrawals or additional deposits). How much money will you have at the end of two
years?- Answers - More than $114
24. A good strategy for saving for retirement is- Answers -- Answers - Set up automatic
contributions to your retirement savings account
25. Jamie and Joe are the same age, have the same job, and earn the same salary. Both
Jamie and Joe estimate that they will need $3 million to retire. At age 25, Jamie sets
up automatic contributions of 15% of his salary to his 401(k). Joe doesn't start
contributing to his 401(k) until age 40. If Joe wants to retire at the same age as Jamie he
will need to.- Answers - Save more each month than Jamie saves
26. Strategies to save more include which of the following- Answers -- Answers - All are
strategies to save more
27. Thaler and Benartzi's "Save More Tomorrow" plan is to wait until you've been at a
job for at least six months and then sign up for the 401(k) plan- Answers - False
28. Which of the following does NOT describe a credit card- Answers - The card provides
access to free money
29. In the book "All Your Worth", Elizabeth Warren and Amelia Warren Tyagi
recommend- Answers - that you budget no more than 50% of after-tax income for expense that you must pay every
month
30. Which on the following should be a higher priority?- Answers - Paying ott credit card debt as
soon as possible
31. What is more valuable- Answers - $1000 today or $1000 a year from now- Answers -
$1000 today
32. Compound interest is interest paid on the principal and not on accrued
3/
16
1. What is not a major Credit Bureau?- Answers - Moody's
2. Which factors directly affect your credit score?- Answers - All choices directly attect credit score
3. Which factor has the largest direct impact on your credit score?- Answers - Payment
history
4. In the video "Prioritizing Savings" which of the following do I NOT recom-
mend?- Answers - Save first for your children's education, ten for your own retirement
5. Lenders use credit reports to help them decide whether to loan you money and
what interest rate to charge- Answers - True
6. If you buy a company's stock...- Answers - you own a part of the company
7. If you buy a company's bond...- Answers - you have lent money to the company
8. If a company files for bankruptcy, which of the following securities is most at risk of
becoming virtually worthless?- Answers - The company's stock
9. Holding a diversified portfolio of stocks rather than an undiversified portfo- lio-
Answers - increases the likelihood that you will own at least one stock that performs poorly
10. Svi Bodie invests in- Answers - inflation protected U.S. bonds
11. Asset allocation refers to deciding which individual stocks to buy- Answers - False
12. In most cases, as people approach retirement age, it is recommended that they
increase the percentage of their financial investments held in stocks and decrease
the percentage held in bonds- Answers - False
13. Most target date funds decrease their allocation to stocks over time- Answers -
True
14. Benjamin Graham recommended holding no more than 75% of one's port- folio
in stocks and no less than 25% in gold- Answers - False
15. It is harder to predict which sports team will win a game than which sports team
1/
16
,will beat the spread- Answers - False
16. If the market drops 30%, it is certain to recover during the next year- Answers -
False
17. Investments with higher risk always have higher expected returns- Answers -
False
18. Most individual investors who trade commodities are simply speculating- Answers -
True
19. The retirement portfolio of most people in the U.S. should include a 10%
allocation in gold- Answers - False
20. Which of the following is a good use of a security fund (also called an
emergency fund or a rainy day fund)?- Answers - To help you pay your bills if you lose
your jobs
21. Most people's emergency (security or rainy day) fund should be invested in the
stock market- Answers - False
2/
16
, 22. Should most people save first for retirement or for their children's educa- tion?-
Answers - Their retirement
23. Suppose you put $100 in a bank savings account that pays 7% annual interest (and
charges no annual fee). You keep that money in the account for two year (with no
withdrawals or additional deposits). How much money will you have at the end of two
years?- Answers - More than $114
24. A good strategy for saving for retirement is- Answers -- Answers - Set up automatic
contributions to your retirement savings account
25. Jamie and Joe are the same age, have the same job, and earn the same salary. Both
Jamie and Joe estimate that they will need $3 million to retire. At age 25, Jamie sets
up automatic contributions of 15% of his salary to his 401(k). Joe doesn't start
contributing to his 401(k) until age 40. If Joe wants to retire at the same age as Jamie he
will need to.- Answers - Save more each month than Jamie saves
26. Strategies to save more include which of the following- Answers -- Answers - All are
strategies to save more
27. Thaler and Benartzi's "Save More Tomorrow" plan is to wait until you've been at a
job for at least six months and then sign up for the 401(k) plan- Answers - False
28. Which of the following does NOT describe a credit card- Answers - The card provides
access to free money
29. In the book "All Your Worth", Elizabeth Warren and Amelia Warren Tyagi
recommend- Answers - that you budget no more than 50% of after-tax income for expense that you must pay every
month
30. Which on the following should be a higher priority?- Answers - Paying ott credit card debt as
soon as possible
31. What is more valuable- Answers - $1000 today or $1000 a year from now- Answers -
$1000 today
32. Compound interest is interest paid on the principal and not on accrued
3/
16
