A Financial Literacy Quiz for your High School Senior
AI's response in regular print | Beverly Hills, CFP®, Joe O'Boyle's in italics
“A Financial Literacy Quiz for your High School Senior.”
What is a dividend?
A) A mathematical operation
B) A type of bond
C) A payment made by a corporation to its shareholders
D) A type of bank accountWhat is the main difference between a Roth IRA and a Traditional IRA?
A) Roth IRA is only for students; Traditional IRA is for adults
B) Roth IRA contributions are taxed up front, Traditional IRA contributions are taxed upon withdrawal
C) Roth IRA is a type of mutual fund; Traditional IRA is a type of bond
D) There's no differenceWhat is a bear market?
A) A market for selling bear products
B) A market characterized by falling prices for securities
C) A market with high inflation
D) A market for aggressive investorsWhat is a capital gain?
A) Money spent on business improvements
B) Profit from the sale of property or an investment
C) A famous landmark
D) An initial investment in a start-up companyWhat is an ETF (Exchange-Traded Fund)?
A) A government tax refund
B) A currency exchange service
C) A fund that typically tracks an index, commodity, or basket of assets
D) A banking serviceWhat is creditworthiness?
A) A credit card promotion
B) The ability to purchase anything on credit
C) A measure of how deserving one is of credit
D) The worth of all your credit cards combinedWhat does FICO score refer to?
A) A grade in school
B) A type of investment portfolio
C) A credit scoring model used by lenders
D) A financial company's stock ratingWhat does liquidity mean in finance?
A) The freshness of financial products
B) The ease with which an asset can be converted into cash
C) A company's profit margin
D) The amount of liquid assets a company holdsWhat is the difference between a savings account and a checking account?
A) A checking account can only be used for online purchases
B) A savings account generally earns interest, while a checking account is used for daily transactions
C) There is no difference
D) A savings account can only be used by businessesWhat is bankruptcy?
A) A profitable business strategy
B) A legal process involving a person or business that is unable to repay debts
C) An investment strategy
D) A type of business partnershipWhat is a deductible in terms of insurance?
A) The amount you get back after a claim
B) The monthly premium for the insurance
C) The amount you must pay before the insurance company starts to cover a loss D) A discount on insurance for good behaviorWhat is a portfolio in finance?
A) A collection of financial investments like stocks, bonds, cash, etc.
B) A briefcase used to carry financial documents
C) A financial company's advertising brochure
D) A ledger for recording financial transactionsWhat does leverage mean in finance?
A) The ability to lift heavy objects
B) Using borrowed money for an investment, expecting the profits made to be greater than the interest payable
C) A strict policy against lending money
D) The balance between liquid and non-liquid assetsWhat is a fixed-rate mortgage?
A) A mortgage with a rate that changes daily
B) A mortgage where the interest rate does not change over the term of the loan C) A mortgage for fixing houses
D) A mortgage that can only be used for purchasing fixed assetsWhat is fiscal policy?
A) A personal money management strategy
B) A government's policy regarding taxation, government spending, and public debt
C) A corporate policy regarding employee benefits
D) A central bank's rules regarding the printing of currencyWhat is depreciation?
A) Appreciation for a job well done
B) A decrease in the value of an asset over time
C) An increase in the value of an asset over time
D) A credit score below 500What is the purpose of a balance sheet in a company?
A) To balance the books at the end of the year
B) To show a company's financial position at a specific point in time
C) To list the company's yearly profits
D) To record the salaries of all employeesWhat is equity in a home?
A) The quality of being fair and impartial
B) A type of home insurance
C) The value of the homeowner's interest in their property, calculated by the market value minus the mortgage balance
D) An agreement between neighborsWhat is a progressive tax?
A) A tax that remains the same for everyone
B) A tax that increases with the level of income
C) A tax that is only paid by businesses
D) A tax that decreases as income increasesWhat is the time value of money (TVM)?
A) A philosophy about the importance of time and money
B) The idea that money available now is worth more than the same amount in the future due to its potential earning capacity
C) The amount of time it takes to double your money
D) The time required to earn a specific amount of money
Answers: 1-C, 2-B, 3-B, 4-B, 5-C, 6-C, 7-C, 8-B, 9-B, 10-B, 11-C, 12-A, 13-B, 14-B, 15-B, 16-B, 17-B, 18-C, 19-B, 20-B.
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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.