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Financial Literacy Quiz - MONEY MANAGEMENT

Provided by the International Finance Corporation

Answer each question by selecting the letter that you believe to be the correct response. This survey will measure your level of financial literacy in the "money management" area. Overall competency in this category will enable you to organize personal finances and use a budget to manage cash flow. A financially literate person will be able to develop a plan for spending and saving, develop a system for keeping and using financial records, and apply consumer skills to purchasing decisions.

  1. Which of the following persons probably needs life insurance most?
    An unmarried college student
    A worker nearing retirement age
    A two-salary family with no children
    A widowed worker with a three-year-old child
  2. Making and following a budget promotes which of the following?
    Credit card debt
    Deficit spending
    Reaching goals
    High investment returns
  3. Which of the following is most likely to help a person increase his/her net worth?
    Increase credit card debt
    Purchase a new automobile for cash
    Reduce spending and increase income
    Play the lottery
  4. What is generally true about the relationship between insurance premiums and risk?
    The higher the risk, the higher the premium
    The higher the risk, the lower the premium
    The lower the risk, the higher the premium
    There is no relationship between premiums and risk
  5. An individual or business who does not purchase any insurance is actually:
    Avoiding the risk of loss.
    Retaining the risk of loss.
    Transferring the risk of loss to another party.
    Sharing the risk of loss with another party.
  6. Which of the following is best to do when you use an Automated Teller Machine (ATM)?
    Memorize your Personal Identification Number (PIN).
    Write your PIN on your ATM card.
    Use your phone number as a PIN.
    Make at least ten ATM cash withdrawals each month.
  7. Which of the following is an advantage of paying for things with cash rather than a credit card?
    It is easier to buy things over the telephone or on the computer.
    It is easier to keep a record of how you spend your money.
    It is easier to rent a car.
    It is easier to control the amount you spend.
  8. What is usually the number one rule for people to accumulate wealth over time?
    Pay the minimum on their credit cards
    Spend less than they earn
    Purchase a new car
    Buy expensive new clothing
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