Commerce - Financial Literacy

Question 1

Saving

Answer 1

Setting aside money to spend later

Question 2

Investing

Answer 2

Putting money into shares, property or other financial schemes in the hope of making profit

Question 3

Debt

Answer 3

Sum of money that is owed

Question 4

Interest

Answer 4

The amount of money a person has to pay the lender in addition to the original amount borrowed

Question 5

Interest rate

Answer 5

The amount a borrower must pay to a lender for the use of assets such as money - usually expressed as a percentage of the total amounted borrowed

Question 6

Principle

Answer 6

Money that was originally invested or loaned

Question 7

Deposit

Answer 7

Sum of money paid into an account, which contributes to the full purchase price

Question 8

Shares

Answer 8

Units of ownership in a publicly listen company

Question 9

Investment Risk

Answer 9

The likelihood of losing money in a financial scheme

Question 10

Share market

Answer 10

A market in which shares in publicly listed companies and bought and sold

Question 11

Australian securities exchange (ASX)

Answer 11

operates Australia’s primary securities exchange; shares are one form of security that an be traded via ASX

Question 12

Scams

Answer 12

A scheme that is deliberately dishonest

Question 13

\Why do people save?

Answer 13

• To earn more
• To spend less

Question 14

How do you set saving goals?

Answer 14

1. Identify saving goal
2. Determine weekly goal
3. Identify time frame

Question 15

Simple Interest

Answer 15

Multiplying principle by interest rate by time

eg.
principal - $1000
interest rate - 10% per annum
time - 2 years
1000 x 10% x 2 = $1200

Question 16

Compound interest

Answer 16

Interest added to principal, then new amount is used to calculate the new interest

Question 17

Good debt

Answer 17

Money borrowed that is used to make more money

Question 18

Bad debt

Answer 18

Money borrowed that is used and value decreases

Question 19

Fixed expenses

Answer 19

An expense that doesn’t change from period to period
eg. Rent, Gas, Electricity

Question 20

Debt expenses

Answer 20

Money that you owe and have to repay back
eg. loan repayments, credit car payments

Question 21

Unpredictable expenses

Answer 21

Expenses that are random and generally have no foreseeable reason
eg. pet costs, car repairs

Question 22

Types of Scams

Answer 22

Scams that target emotions:
- Charity
- Psychic and clairvoyant
Investment and online account scams:
- Phishing emails
- Phone calls
COVID-19 :
- Online shopping
- Phishing
- Superannuation
Impersonation

Question 23

How to avoid scams

Answer 23

• Don’t click hyperlinks in text/social media messages or emails
• Never respond to a text, email or phone request for you personal or financial details, just press delete or hand up and block the number
• Never give remote access to your computer to a stranger
• Use an independent source to verify the legitimacy of the contact