Personal Finance For Highschool Students Quiz

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Questions: 10 | Attempts: 1,643 | Updated: Aug 16, 2023

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Personal Finance For Highschool Students Quiz - Quiz

How good is your knowledge of personal finances? Take this personal finance for high school students quiz to see how much you know. Personal finance is basically the financial management that a person performs to spend monetary resources over time, considering the various financial risks and future life events. If you know it well, it is time to test your knowledge with this high school quiz and get a 100% score on this.

Questions and Answers

1.

A percentage paid to a lender for the use of borrowed money is called
- A.
  
  Credit
- B.
  
  Debit
- C.
  
  Loan
- D.
  
  Interest
Correct Answer
D. Interest

Explanation
Interest is the correct answer because it refers to the percentage paid to a lender for the use of borrowed money. When someone borrows money, they are charged interest by the lender as a fee for using their funds. This interest rate is usually expressed as a percentage of the loan amount and is added to the total amount owed by the borrower.

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2
0
2.
When deciding between which of the two items to purchase, one should always:
- A.
  
  Choose an item after the comparison of costs and benefits of both items.
- B.
  
  Choose the item that costs less.
- C.
  
  Choose the item with the greatest benefits.
- D.
  
  There is nothing in particular.
Correct Answer
A. Choose an item after the comparison of costs and benefits of both items.

Explanation
When deciding between two items to purchase, it is important to consider both the costs and benefits of each item. By comparing the costs and benefits, one can make an informed decision and choose the item that offers the best value for their needs. This approach ensures that the decision is not solely based on the price of the item, but also takes into account the advantages and disadvantages of each option.

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1
0
3.

Which of the following statements about saving is true?
- A.
  
  You only need to save for your long-term goals.
- B.
  
  You can categorize expenses under-saving if you got a discount on them.
- C.
  
  Saving money consistently each month can help you prepare for the future.
- D.
  
  None of the above
Correct Answer
C. Saving money consistently each month can help you prepare for the future.

Explanation
Consistently saving money each month is a true statement because it allows individuals to accumulate funds over time and create a financial cushion for future needs or emergencies. By regularly setting aside a portion of their income, individuals can build savings that can be used for long-term goals such as buying a house, funding education, or retirement. This practice also promotes financial discipline and helps individuals develop good money management habits.

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4.

Which of the following functions is primary in case of insurance?
- A.
  
  Making risk disappear.
- B.
  
  Making someone else pay for an accident or loss.
- C.
  
  Pooling and sharing risk among the insured.
- D.
  
  None of the above
Correct Answer
C. Pooling and sharing risk among the insured.

Explanation
The primary function of insurance is to pool and share risk among the insured. Insurance works by collecting premiums from a large group of individuals and using that money to compensate those who experience losses or accidents. By sharing the risk among the insured, the financial burden of any individual loss is spread out, making it more manageable for everyone involved. This allows individuals to protect themselves against potential financial hardships and provides a sense of security.

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2
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5.

What is a bear market?
- A.
  
  A time when investors are acting aggressively.
- B.
  
  A time when stock prices are rising.
- C.
  
  A time when stock prices are inappropriate.
- D.
  
  A time when stock prices are falling.
Correct Answer
D. A time when stock prices are falling.

Explanation
A bear market refers to a period when stock prices are falling. This means that the overall market sentiment is negative, and investors are selling their stocks, causing prices to decline. A bear market is typically characterized by pessimism, fear, and a lack of confidence in the market. It is the opposite of a bull market, where stock prices are rising. In a bear market, investors may adopt a more cautious approach and may seek to protect their investments by moving towards safer assets.

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6.
Which of these has historically had the highest rate of return over long periods of time?
- A.
  
  Stocks
- B.
  
  Bonds
- C.
  
  Bank savings account
- D.
  
  Funds
Correct Answer
A. Stocks

Explanation
Stocks have historically had the highest rate of return over long periods of time compared to bonds, bank savings accounts, and funds. This is because stocks represent ownership in a company, and as the company grows and becomes more profitable, the value of the stock increases. While stocks can be more volatile and risky in the short term, over the long term they have consistently outperformed other investment options, providing higher returns for investors.

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1
0
7.

What does FDIC Insured mean?
- A.
  
  The bank has insurance against fires and floods for up to $250,000.
- B.
  
  The federal government will repay your deposits of up to $250,000 if the bank fails.
- C.
  
  The bank will owe you $250,000 if they make a mistake.
- D.
  
  All of the above
Correct Answer
B. The federal government will repay your deposits of up to $250,000 if the bank fails.

Explanation
FDIC Insured means that the federal government will guarantee the safety of your deposits up to $250,000 in the event that the bank fails. This ensures that you will not lose your money even if the bank goes bankrupt or is unable to return your deposits.

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8.
Which of these would be expected to hold its value best during a time of inflation?
- A.
  
  A house
- B.
  
  A deposit certificate
- C.
  
  A corporate bond
- D.
  
  A car
Correct Answer
A. A house

Explanation
A house would be expected to hold its value best during a time of inflation because it is a tangible asset that typically appreciates over time. Inflation causes the prices of goods and services to rise, which can lead to an increase in the value of real estate. Additionally, owning a house provides a sense of stability and security, making it a desirable investment during times of economic uncertainty.

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9.

What do you mean by interest?
- A.
  
  The amount you earn for keeping money in a savings account is expressed as a percentage.
- B.
  
  The amount you pay for borrowing money is expressed as a percentage.
- C.
  
  Both of the above
- D.
  
  None of the above
Correct Answer
C. Both of the above

Explanation
The correct answer is "Both of the above". This means that interest can refer to both the amount you earn for keeping money in a savings account and the amount you pay for borrowing money. In both cases, interest is expressed as a percentage.

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10.

Which of these is not a fee that is sometimes charged to a checking account?
- A.
  
  Overdraft fee
- B.
  
  Minimum balance fee
- C.
  
  ATM fee
- D.
  
  Excessive withdrawals fee
Correct Answer
D. Excessive withdrawals fee

Explanation
Excessive withdrawals fee is not a fee that is sometimes charged to a checking account. The other options mentioned, such as overdraft fee, minimum balance fee, and ATM fee, are commonly associated with checking accounts. However, excessive withdrawals fee is typically associated with savings accounts, where there may be limitations on the number of withdrawals that can be made in a given period.

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Current Version
Aug 16, 2023

Quiz Edited by
ProProfs Editorial Team
Oct 26, 2022

Quiz Created by
Sophia Smith

Personal Finance For Highschool Students Quiz

A percentage paid to a lender for the use of borrowed money is called

When deciding between which of the two items to purchase, one should always:

Which of the following statements about saving is true?

Which of the following functions is primary in case of insurance?

What is a bear market?

Which of these has historically had the highest rate of return over long periods of time?

What does FDIC Insured mean?

Which of these would be expected to hold its value best during a time of inflation?

What do you mean by interest?

Which of these is not a fee that is sometimes charged to a checking account?