PF2

Question 1

Income

Answer 1

is the starting point of personal finance. It is the entire amount of cash inflow
that you receive and can allocate to expenses, savings, investment, and protection.

Question 2

Spending

Answer 2

is an outflow of cash and typically where the bulk of income goes.

Question 3

Savings

Answer 3

refers to the portion of your disposable income that you set aside rather than
spend on consumption.

Question 4

Investing

Answer 4

involves purchasing assets, usually stocks and bonds, to earn a return on the
money invested.

Question 5

Protection

Answer 5

refers to the methods people take to protect themselves from unexpected
events, such as illnesses or accidents, and as means to preserve wealth.