Savvy Investor Badge Pre-AssessmentBy Holly Henry / March 18, 2024 You have one attempt to complete this pre-assessment. This assessment will measure your existing knowledge of the topics presented in this module. Click Start Quiz to begin. After you select a response, click Next to progress through each question. When you complete the assessment, click the blue Submit button at the bottom right of the page. You'll receive a pre-assessment score and a copy of your results to review. Click Mark Complete to finish this lesson. 1. You can lower your tax obligations by all EXCEPT: Choosing the correct and most advantageous filing status Taking advantage of appropriate tax credits Saving into tax-advantaged retirement accounts Making more money None 2. For federal income tax, which date determines your marital status for tax filing? Marital status on your tax filing date Marital status on Dec 31 of the tax year Marital status on April 15th of the tax year It depends on the state None 3. Which of the following is a good reason to file as married filing separately? You don't trust your spouse. It provides more tax advantages than married filing jointly. It provides a filing extension. You are divorced. None 4. Which of the following does not influence the amount of your federal tax withholding? The amount you earn. Your marital status. Number of dependents. Your health insurance benefits. None 5. Which of these is not a federal tax filing status? Single Married Divorced Widowed None 6. The main difference between a stock and a bond is: A bond is easier to purchase than a stock A stock represents ownership while a bond is a loan Stocks and bonds have no differences A stock is more expensive than a bond None 7. Building wealth is the combination of which TWO options: A. A few large purchases made at one point in time.B. A series of consistent choices made across one’s lifetime.C. Diversified assets which can include stocks, bonds, mutual funds, homeownership, and business ownership. D. Inheriting wealth from family or through marriage. D & A C & D B & C A & C 8. Savings accounts and money market accounts are most appropriate for: Long-term investment Emergency fund and short-term goals Earning a high interest rate All of the above None 9. Why is compound interest important when investing for the long run? Compound interest helps you to make your investment risk-free. Compound interest makes your money grow faster because interest is calculated on the accumulated interest over time as well as on your original principal. Compound interest is not relevant for long-term investing. Compound interest only matters in savings accounts, not investments. None 10. Which of these investment tools gives the highest return in the long run (10 or 20 years) and has the highest fluctuation over time? savings bond stocks savings account money markets None 11. When an investor spreads his or her money among different assets, does the risk of losing a lot of money increase, decrease, or stay the same? Increase. Decrease. Stay the same. None 12. What aspect of investing allows it to accomplish financial goals and increase wealth? Compound interest Time Simple interest Principal None 13. Tax advantaged investment accounts, or qualified accounts, include all of the following EXCEPT: Individual Retirement Account (IRA) Health Savings Account (HSA) Brokerage Account 401(k) Education Savings Account (529 Plan) None 14. Diversification is explained by which common phrase? A bird in the hand is worth two in the bush. Don’t put all your eggs in one basket. Easy come, easy go. Hitting two birds with one stone. None 15. Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After 1 year, would you be able to buy more than, exactly the same as, or less than today with the money in this account? More than today. Exactly the same as today. Less than today. None 16. Taxes, trading fees, and growth on the account are important considerations in the overall evaluation of investment accounts. True False None 17. Risk tolerance should include: Loss aversion Potential gains Time horizon Purpose of invested funds All of the above None 18. Which TWO of the following statements about cryptocurrency are true: A. Is a long-standing and established investment opportunity. B. Is a terrible addition to a balanced portfolio and financial plan.C. Is based on decentralized blockchain technology.D. Will change over time as tax and legal implications adjust. A & C C & B A & B C & D 19. If you were to invest \$ 1000 in a stock mutual fund, it would be possible to have less than \$ 1000 when you withdraw the money. True False None 20. Your friends Marco and Jada are twins. At age 20, Marco started to save \$ 20 a month. After 20 years, when he was age 40, he stopped adding to his savings but left the money in the account. Jada didn’t start to save until she was 40. Then, she saved \$ 20 a month until she retired 20 years later at age 60. Suppose both Marco and Jada earned a 3% return each year on their savings. When they both retired at age 60, who had more money? Marco Jada They had the same amount. Not enough information to know the ending balances. None 21. Assume after graduation you will be offered two jobs and want to select the job with a salary that will provide you with a higher standard of living for the next few years. Company A is located in City A and offers a 3% raise every year, while Company B is located in City B and won’t give you a raise for the next few years. The price of goods and services today are about the same in both cities, however, prices are expected to rise by 4% in City A every year and stay the same in City B. If your first priority is to maximize your purchasing power, which job should you take? Company Raise every year City Expected increase in prices A 3% A 4% B No raise increase B No expected increase Job A Job B Either one: you will be able to afford the same future standard of living in both places. None 22. Assuming the same scenario as above, which job would you take if you wanted to get the best return on your homeownership investment over 5-7 years? Job A Job B Either one: you will be able to expect the same increase in real estate in both cities. None When you're ready to submit your Assessment, please click the blue Submit button. Once you have the results of your Assessment, please make sure to click the MARK COMPLETE button below or you will NOT be able to continue into the badge content and will have to retake this Assessment. Time's up
