Finance Quiz 1

Pataasin ang iyong marka sa homework at exams ngayon gamit ang Quizwiz!

Who is most likely to accumulate more wealth?

the person who is willing to take risk after adequate research

someone who strongly agrees with a) the thought of taking risk is exciting, b) high returns are more important than safety, and c) making money in stocks and bonds is based on knowledge is most likely:

willling to take more financial risk

which of the following strategies is most likely to increase your confidence about your financial future? 1) saving money on a regular basis. 2) paying down debt as quickly as possible. 3) borrowing money to improve GDP.

1 and 2 only

your friend Lucia is a procrastinator. How can you best help her overcome this weakness? 1) create deadlines. 2) encourage hyperbolic discounting. 3) strengthen her confirmatory bias.

1 only

Examples of human capital include which of the following? 1) formal education 2) health 3) skill development

1, 2, and 3

which of the following elements influence your view of the financial world? 1) your risk tolerance 2) how much you believe you control your financial future 3) knowledge about personal finance topics

1, 2, and 3

Loraine is thinking about her future retirement goals and needs. She has 25 years until retirement. She needs to save quite a bit of money in order to reach her retirement goal. Unfortunately, Loraine's risk tolerance is low. Given these facts, what the best recommendation for Loraine?

Invest more aggressively knowing that she has time on her side to withstand any temporary setbacks with these riskier investments.

it is possible to increase your financial risk tolerance over time. What is the process of risk tolerance change?

Knowledge leads to confidence, which leads to experience, understanding, and an increase in risk tolerance

which of the following people is most likely to be considered financially knowledgeable?

Michelle, who gives regularly to charity, reads about investing, and is self-confident

the uncertainty associated with any physical, social, emotional, environmental, workplace, or financial activity

Risk

What is the S in SMART goals

Specific

someone who feels that investing is too difficult to understand likely:

has a lower level of financial literacy

Jerry recently earned $200 on an investment. Unfortunately, the investment fell in value, and he lost $200. Afterward, Jerry felt miserable. He hated losing the money much more than he enjoyed seeing the investment grow. Jerry's experience is an example of:

loss aversion

Nigel believes that most "rich people" obtained their wealth either through hard work or by investing wisely. Assuming Nigel adopts this same perspective as a guide to his own spending and saving behavior, he is most likely to become:

more knowledgeable about the financial marketplace over time and increase his personal wealth

Swarn is a risk-taker. His core life philosophy is that nothing bad can happen to him. When he thinks back over life, he can't remember any serious negative events. When he looks ahead, he simply can't imagine a painful loss occuring to him. Swarn likely suffers from an

optimism bias


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