Think You Call Yourself a Money Expert? Only Geniuses Score 100% on This Brutal Finance Terminology Exam!

Compound interest is “interest on interest.” Your money grows faster because each period’s interest is added to the principal, and the next period’s interest is calculated on the new, larger amount.“Bull” = prices going up. People are optimistic and buying.A bull market occurs when stock prices rise, and investor optimism is high.Diversification reduces risk by not putting all eggs in one basket.Inflation is the rate of increase in prices over a given period of time. Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living in a country.When you buy stock, you own a tiny piece of the company.Bonds pay interest and return principal at maturity.ROI measures how much profit you make relative to what you invested.Professional managers invest the pooled money for you.Liquidity refers to the ability of a company or an individual to settle short-term liabilities easily and on time. It reflects how quickly and efficiently assets can be converted into cash without losing significant value.A credit score is a three-digit number, typically between 300 and 850, designed to represent your credit risk, or the likelihood you will pay your bills on time.Higher score = better loan terms and lower interest rates.Many employers match contributions, making it a powerful retirement tool.ETFs trade like stocks but hold a basket of assets (very popular and usually low-cost).Lower P/E can mean cheaper stock; high P/E means investors expect fast growth.This cash cushion protects you if you lose your job or face unexpected bills.Amortization shows how your loan payments change over time, from more of your monthly payment going toward interest at the beginning, to more of it going toward the principal.For individuals, net worth or wealth refers to an individual's net economic position: the value of the individual's assets minus liabilities.Very low fees and historically strong long-term performance.Includes interest + certain fees; always compare APR when shopping for loans.A budget is a plan you write down to decide how you'll spend your money each month. A budget shows you: how much money you make. how you spend your money.A FICO® score is a particular brand of credit score that helps lenders determine how likely you are to pay back a loan.Reduces the impact of volatility; you buy more shares when cheap and fewer when expensive.A liability is something that a person or company owes, usually a sum of money. Liabilities are settled over time through the transfer of economic benefits including money, goods, or services.Asset allocation refers to distributing or allocating your money across multiple asset classes, such as equity, fixed income, debt, cash, and others.Blue-chip stocks are shares of large, financially strong, and well-established companies with long records of reliability and profitability.Refinancing a loan involves replacing an existing loan with a new one, typically to secure better terms.An expense ratio is the total annual expenses of the fund divided by the fund's total net assets.Dividends are a percentage of a company's earnings paid to its shareholders as their share of the profits.Definition. Risk tolerance is the degree of uncertainty and financial loss that an investor is willing to take on an investment in exchange for a possible higher return.Time is the secret ingredient—$100/month from age 25 can grow dramatically by retirement.A mortgage is a type of loan used to help you buy a home.Bank deposits up to $250,000 per depositor, per bank.So you don’t lose money if your bank fails.Passive income is money that you don't have to actively work for;Many people aim to build streams of passive income for financial freedom.S&P 500 (Standard and Poor's 500) is a stock market index tracking the stock performance of 500 leading companies listed on stock exchanges in the United States.The rule of 72 is a handy way to estimate how long it will take for an investment to double in value.Savings accounts are low-risk and usually insured, making them ideal for emergency funds or short-term goals.It’s a marketplace (like the NYSE or Nasdaq) for trading ownership in public companies.Many people aim for FI by saving aggressively and investing wisely so their money works for them.Cash flow is the money that flows in and out of your business throughout a given period. Positive cash flow = you have money left after bills; negative = you’re spending more than you make.Banks usually charge $30–$35 per overdraft, even if you’re short by $5.$1–2 million extra liability coverage for usually $200–$400/year. Rich people’s secret weapon.You scored 0 out of 40You scored 1 out of 40You scored 2 out of 40You scored 3 out of 40You scored 4 out of 40You scored 5 out of 40You scored 6 out of 40You scored 7 out of 40You scored 8 out of 40You scored 9 out of 40You scored 10 out of 40You scored 11 out of 40You scored 12 out of 40You scored 13 out of 40You scored 14 out of 40You scored 15 out of 40You scored 16 out of 40You scored 17 out of 40You scored 18 out of 40You scored 19 out of 40You scored 20 out of 40You scored 21 out of 40You scored 22 out of 40You scored 23 out of 40You scored 24 out of 40You scored 25 out of 40You scored 26 out of 40You scored 27 out of 40You scored 28 out of 40You scored 29 out of 40You scored 30 out of 40You scored 31 out of 40You scored 32 out of 40You scored 33 out of 40You scored 34 out of 40You scored 35 out of 40You scored 36 out of 40You scored 37 out of 40You scored 38 out of 40You scored 39 out of 40You scored 40 out of 40

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What does “compound interest” mean?

Interest paid only on the original amount

Interest earned on both the original amount and previously earned interest

Interest paid twice a year

A type of bank penalty

Think you know money inside out?  You might toss around words like “diversification” and “leverage” at dinner parties, but can you actually define them when the pressure’s on?  This isn’t your high-school personal-finance class or some fluffy TikTok explainer.  This is a ruthless, no-mercy gauntlet of 40 advanced finance terms used daily by hedge fund managers, CFOs, investment bankers, and central bankers.  One tiny misunderstanding and you’re exposed.  Only the real deal — the top 1% who live and breathe markets — walk away with a perfect score.  Ready to find out if you belong in that elite group or if you’ve just been faking it all along?  Buckle up.  The exam starts now.

Financial Newbie

Think you know money inside out? You might toss around words like “diversification” and “leverage” at dinner parties, but can you actually define them when the pressure’s on? This isn’t your high-school personal-finance class or some fluffy TikTok explainer. This is a ruthless, no-mercy gauntlet of 40 advanced finance terms used daily by hedge fund managers, CFOs, investment bankers, and central bankers. One tiny misunderstanding and you’re exposed. Only the real deal — the top 1% who live and breathe markets — walk away with a perfect score. Ready to find out if you belong in that elite group or if you’ve just been faking it all along? Buckle up. The exam starts now.

Think You Call Yourself a Money Expert? Only Geniuses Score 100% on This Brutal Finance Terminology Exam!

What does “compound interest” mean?

Financial Newbie

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