Financial Literacy Certification Test Review #1 questions and answers

Buying insurance is a way to protect against the risk of potential losses Why are mutual funds considered a wise investment? they diversify a persons portfolio among a number of stocks Individuals should work towards having six month emergency fund that may be used to pay expenses in the event of job loss What is the disadvantage of making a check payable to cash? there is no way to record the check in the check register Which factors do an insurance company consider important in determining the premium for automobile insurance? past claims and type of car owned Which factor would most likely help someone obtain a favorable interest rate on a bank loan? having a good credit Which of the following is a sign that a person is having financial problems? paying bills with credit card and cash advances A rising rate of inflation is most difficult for people who are small business owners One way to establish credit is to take a small loan using a saving account as collateral and pay it back on time