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Dave Ramsey Test: Financial Literacy Exercises and Questions, Exams of Economics

University of Missouri - Kansas City (UMKC)Economics

A series of questions and answers related to dave ramsey's financial principles. It covers topics such as diversification, risk, investment strategies, emergency funds, debt management, and retirement planning. A valuable resource for understanding and applying dave ramsey's financial philosophy.

Typology: Exams

2024/2025

Available from 03/05/2025

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Dave Ramsey Test | 100% Correct
Answers | Verified | Latest 2024 Version
Spread around the risk. - ✔✔Diversification
Degree of uncertainty of the return on an investment. - ✔✔Risk
Risk goes up, return goes up - ✔✔Risk return ratio
Imagine that the interest rate on your savings account is 1 percent a year and inflation is 2 percent a
year. After one year, would the money in the account buy more than it does today, exactly the same or
less than today? - ✔✔Less than it does today
Increasing your 401k deduction will __________ your gross pay. - ✔✔Not change
Always check this record when investing. - ✔✔5-10 year track record
Piece of ownership in company stock - ✔✔Share
List of your investments - ✔✔Portfolio
Liquidity means to spread around and lower risk. - ✔✔False
Buying a single company's stock usually provides a safer return than a stock mutual fund. - ✔✔False
A single stock is the best place to keep your emergency fund. - ✔✔False
A certificate of deposit is the best place to keep an emergency fund. - ✔✔False
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Dave Ramsey Test | 100% Correct

Answers | Verified | Latest 2024 Version

Spread around the risk. - ✔✔Diversification Degree of uncertainty of the return on an investment. - ✔✔Risk Risk goes up, return goes up - ✔✔Risk return ratio Imagine that the interest rate on your savings account is 1 percent a year and inflation is 2 percent a year. After one year, would the money in the account buy more than it does today, exactly the same or less than today? - ✔✔Less than it does today Increasing your 401k deduction will __________ your gross pay. - ✔✔Not change Always check this record when investing. - ✔✔ 5 - 10 year track record Piece of ownership in company stock - ✔✔Share List of your investments - ✔✔Portfolio Liquidity means to spread around and lower risk. - ✔✔False Buying a single company's stock usually provides a safer return than a stock mutual fund. - ✔✔False A single stock is the best place to keep your emergency fund. - ✔✔False A certificate of deposit is the best place to keep an emergency fund. - ✔✔False

Diversification lowers your risk when investing. - ✔✔True What is the KISS rule of investing? - ✔✔Keep it simple stupid How much money did John pay in Federal taxes, excluding Medicare and Social Security? - ✔✔$153. (Federal Withholding) A savings account with a certificate is a: - ✔✔C.D. Baby steps 1&3 have to do with: - ✔✔Both a and b (emergency fund and getting out of debt) You should save for the following: - ✔✔All of the above (Emergency fund, purchases, wealth building) How many baby steps are there? - ✔✔ 7 Interest is money paid to a saver by a financial institution. - ✔✔True Dave's 80/20 rule says when it comes to money, 80% is head knowledge and 20% is behavior - ✔✔False The _______IRA grows tax-free - ✔✔Roth Which is not a benefit of the Roth IRA? - ✔✔Unlimited contributions Pre-tax means the government is letting you invest money before taxes have been taken out. - ✔✔True An IRA is a specific type of investment. - ✔✔False

A collection of money from different investors, which is used to purchase stocks, bonds, or other investments, and is managed by a fund manager is called: - ✔✔Mutual Funds What advice would you give to someone that was starting to develop a financial plan for themselves from the information you learned from the Automatic Millionaire and Dave Ramsey? - ✔✔Essay response How much has lots-O-Watts Energy charged for energy this billing cycle? - ✔✔$68. If you bought 120 shares of Disney at its highest price of the year, and sold it at its lowest price of the year, what would be your gain/loss? - ✔✔%1,164 capital loss What was the closing price for PapaJohns stock on 4/19/06 - ✔✔$28. Based on the rule of 72, if you invested money and earned 6% interest, your money would double in - ✔✔12 years The statement "risk and reward are related" implies: - ✔✔the higher the risk the higher the reward This week ABC stock's price increased from... which stock showed the greatest percentage gain in value?

  • ✔✔XYZ Owning a share of stock means: - ✔✔you own part of a company How can automating my finances save me time, protect my credit, and earn me extra money? - ✔✔Both a and c Choose the answer that best describes how to automate your finances - ✔✔Have your employer direct deposit your paycheck, set up automatic bill-pay, set up automatic transfers to your savings account, and track all your finances on the mint.com website

Which loan term is best if you want to reduce the total amount you will pay over the life of the loan? - ✔✔3 year If you are unable to pay off the entire balance you owe in credit card debt, the best way to pay off the balance is to _________. - ✔✔Pay the max amount your budget allows on the card with the highest interest rate Buying a single company's stock usually provides a safer return stock than a mutual fund. - ✔✔False Suppose you owe $1,000 on a loan and the interest rate you are charged is 20% per year compounded annually. If you didn't pay anything off, at this interest rate, how many years would it take for the amount you owe to double? - ✔✔ 2 - 4 years