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Professional Development, Mathematics
11th
grade
Ramsey Classroom Chapter 4 Study Guide
30 questions
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- 1. Multiple Choice
45% of Americans have less than $1,000 saved for a(n) .
Emergency
New Car
Retirement
Smartphone
- 2. Multiple Choice
You'll have less freedom with your money if you . . .
Are paying for things in your past
Invest in the Stock Market
Put money in a bank account
Make less than 35K
- 3. Multiple Choice
Once you have a $500 emergency fund, you should . . .
Save it until an emergency
Start putting it toward debt
Invest in the stock market and grow your money
Use the money to pay for health insurance
- 4. Multiple Choice
The first step you should take when you want to make a large purchase is . . .
Decide how much you need to save and the time frame you need to save it
Ask your parents to loan you the money with low interest
Get a new Credit Card
Sell something and use the proceeds
- 5. Multiple Choice
The best way to build wealth is to start investing early. You should start investing money . . .
Once you're out of college, living debt free, and have 3-6 months of living expenses saved
When the stock market is performing really well
Once you have a fully funded emergency fund
As soon as you have extra cash
- 6. Multiple Choice
Why do some accounts, like savings accounts at your local bank, earn interest?
Because the bank pays to use your money
Because you deposit money, adding to your principal each month
Because of inflation
Because those accounts always have great interest rates
- 7. Multiple Choice
It's not IF an emergency will happen, but ...
When
How
Where
Why
- 8. Multiple Choice
If you really want to save money, you've got to . . .
Live on less than you make
Fly economy class
Invest in a Roth IRA
Have a financial advisor
- 9. Multiple Choice
The only place you should keep your emergency fund money is...
A savings account or money market account
A safe in your bedroom
A Roth IRA
An envelope in a safe place
- 10. Multiple Choice
If people saved the equivalent of a car payment each month for a year or two (instead of spending it on payments and interest), they could have enough money to buy a car with cash for much cheaper!
True
False
- 11. Multiple Choice
Which two habits are the most important for building wealth and becoming a millionaire?
Consistently investing money and patience to give it time to grow
Investing into the right stocks and using a private CPA
Always paying off your credit card on time and putting extra money into a retirement account
Working a high-paying job and relying on a trust fund
- 12. Multiple Choice
The interest rate on a savings account determines . . .
How much money you need to have to open the account
How much you will pay the bank to manage the account
The amount of time your money will be in the account
How quickly your money will grow over time
- 13. Multiple Choice
Debt is a tool to use to make you wealthy.
True
False
- 14. Multiple Choice
You should budget in this order: giving, savings, spending.
True
False
- 15. Multiple Choice
__________ is a millionaire's best friend.
Accrued interest
Compound growth
High returns
Profit sharing
- 16. Multiple Choice
The purpose of an emergency fund is to . . .
Be able to cover an unexpected expense with cash and protect you from having to pile up debt when something goes wrong.
Teach you how to invest in growth stock mutual funds.
. Have some extra money in a checking account in case you need to transfer some to your spending categories.
Teach you discipline—saving is purely a good exercise in self-control.
- 17. Multiple Choice
Why do stores rarely advertise the full price of big purchases like smartphones?
They are trying to keep their prices competitive.
Hiding the full price allows stores to change their pricing as the market fluctuates.
By showing you only the monthly payment, they make the product seem affordable.
They are trying to cheat you.
- 18. Multiple Choice
Compound interest is earned at a fixed rate, while is an average based on an investment's past performance.
The principal
Interest rate
The Fifth Foundation
Compound growth
- 19. Multiple Choice
What is the goal of an emergency fund?
To pay for large purchases
To save for your children's college expenses
To have cash on hand for unexpected events
To pay for health insurance
- 20. Multiple Choice
The main reasons for saving your hard-earned money are . . .
Emergencies, large purchases, and wealth building
Paying for your dream home, buying your dream car, and going on your dream vacation
Buying gifts, donating to charities, and building up a college fund for your kids
Investing, indulging, and influencing
- 21. Multiple Choice
Once you're out of school, have started your career, and have zero debt, your emergency fund should have .
3–6 months of income
3–6 months of living expenses
3,.000
5,000
- 22. Multiple Choice
What is the Third Foundation?
Pay cash for your car.
Pay cash for college.
Save for retirement.
Create a monthly budget.
- 23. Multiple Choice
The top three careers reported among millionaires were_________ ,_________ , and ___________ .
Pro athletes; bankers; CEOs
Lawyers; surgeons; accountants
Celebrities; developers; writers
Accountants; engineers; teachers
- 24. Multiple Choice
In order to outpace inflation when investing, your investments need to have a lower rate of return than the rate of inflation.
True
False
- 25. Multiple Choice
. While saving money isn't easy at first, it will make your life a lot __________ in the future if you make it a habit now.
Easier
Longer
Harder
Poorer
- 26. Multiple Choice
90% of millionaires make over $100,000 a year.
True
False
- 27. Multiple Choice
Which of these would count as a legitimate reason to use your emergency fund?
You forgot to budget for your mom's birthday gif
You have a fancy event coming up but you already spent all of your Clothing budget category
The smartphone you've wanted just went on sale
Your car battery died
- 28. Multiple Choice
The amount of interest charged on a debt but not yet collected is called . . .
Accrued interest
Interest rate
Same-as-cash
Growth Rate
- 29. Multiple Choice
One of the main reasons we build wealth is so that we can . . .
Give to those in need
Spend it all on ourselves
Impress the people around us
Prove that we are successful
- 30. Multiple Choice
Which principle says that a certain amount of money today is worth more than the same amount in the future?
Inflation
Rate of Return
The time value of money
Principal Interest
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