A Financial Literacy Quiz for your 8th Grader
AI's response in regular print | Beverly Hills, CFP®, Joe O'Boyle's in italics
“A Financial Literacy Quiz for your 8th Grader.”
What does it mean to diversify your investments?
A) Put all your money in one stock
B) Spread your money among different types of investments
C) Buy only the most expensive stocks
D) Invest all your money in goldWhat is a 401(k) plan?
A) A type of phone
B) A model of a car
C) A retirement savings account offered by employers
D) A type of music bandWhat is inflation?
A) Getting a good grade in school
B) The act of inflating a balloon
C) A general increase in prices and fall in the purchasing value of money
D) A type of investment strategyWhat is a mortgage?
A) A type of plant
B) A promise to be nice
C) A loan taken out to buy property or land
D) A kind of weather phenomenonWhat is compound interest?
A) Interest that is paid only on the original amount of money
B) Interest that is calculated on the initial principal and also on the accumulated interest
C) A science experiment involving compounds
D) A type of school subjectWhat does "living within your means" mean?
A) Buying anything you want
B) Spending less than what you earn
C) Living inside a mean person’s house
D) Spending all your money on foodWhat is a credit score?
A) A score for a video game
B) A number assigned to a person that indicates their ability to repay a loan
C) A grade in a school subject
D) A musical score played on creditWhat is the stock market?
A) A market where you buy groceries
B) A market for selling livestock
C) A place where stocks and shares of companies are bought and sold
D) A store for kitchen utensilsWhat is a mutual fund?
A) A friendly agreement between two people
B) A fund that only benefits one person
C) A fund invested in stocks, bonds, or other assets — can be managed by professionals
D) A fund created by friends to buy mutual giftsWhat is the principal amount in a loan?
A) The original amount of money borrowed before interest
B) The interest paid on a loan
C) The total amount paid after the loan is repaid
D) The principle of giving loansWhat is a liability?
A) An asset
B) Something you're responsible for, or a debt
C) A type of investment
D) An ability to lieWhat does it mean to liquidate an asset?
A) To turn an asset into a liquid
B) To sell an asset and turn it into cash
C) To freeze an asset
D) To inflate the price of an assetWhat is a bond?
A) A type of glue
B) A friendship connection
C) A debt security, similar to a loan or IOU
D) A famous movie characterWhat's the difference between a debit card and a credit card?
A) They're the same
B) Debit cards withdraw money directly from your account; credit cards borrow money to be repaid later
C) Debit cards are only for students; credit cards are for adults
D) Debit cards are blue; credit cards are redWhat is net worth?
A) The value of your internet connection
B) The value of all your fishing nets
C) The total value of your assets minus liabilities
D) The worth of a networkWhat does it mean to have a balanced budget?
A) A budget that weighs the same on both sides
B) A budget where expenses equal income
C) A budget that you can balance on one finger
D) A budget that includes balanced mealsWhat is a financial risk?
A) Taking a risky jump on a skateboard
B) A risk associated with horse racing
C) The chance of losing money or the potential to gain money from an investment D) The risk of a computer virusWhat is an asset?
A) A sneezing attack
B) A mistake in judgment
C) Something of value owned by a person or company
D) A type of soft drinkWhat is opportunity cost?
A) The cost of buying an opportunity
B) The loss of potential gain from other alternatives when one alternative is chosen
C) The price of your favorite product
D) The cost of school opportunitiesWhat is a budget deficit?
A) A diet plan
B) When spending is less than income
C) When spending exceeds income
D) A new video game
Answers: 1-B, 2-C, 3-C, 4-C, 5-B, 6-B, 7-B, 8-C, 9-C, 10-A, 11-B, 12-B, 13-C, 14-B, 15-C, 16-B, 17-C, 18-C, 19-B, 20-C.
What did you think? How did AI do?
About OpenAI’s ChatGPT tool:
GPT (short for "Generative Pre-training Transformer") is a type of language model developed by OpenAI that is trained to generate human-like text. ChatGPT is specifically designed for generating text in a conversational style. It is a machine learning model and has been trained on large datasets of real-world conversations in order to learn the patterns and styles of human communication.
Joe O'Boyle is the founder and principal of O'Boyle Wealth Management, a full service financial planning and investment management firm, located in Beverly Hills, California. Joe O’Boyle was named to InvestmentNews 40 under 40 class of 2016, and has a catalog of financial planning and investing articles on Money.com & U.S. News. Disclosure information.