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PF Unit 5 (Saving & Investing) Flashcards | StudBud
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PF Unit 5 (Saving & Investing)
PF Unit 5 (Saving & Investing)
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Questions
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Answers
1
It is best to have the rate of return on an investment ____________ than the rate of inflation.
Higher, to maintain purchase power
Higher, to minimize risk
2
A diversified portfolio is desirable because it:
decreases risk by investing in a variety of investments
increases risk by investing in a variety of investments
3
Funds deposited in a CD are held for a certain length of time.
TRUE
FALSE
4
Mutual Funds are diversified investments.
TRUE
FALSE
5
Tax-advantaged investments have tax benefits.
TRUE
FALSE
6
Money Market Account offers a tiered interest rate, which means....
the higher the balance, the higher the lower rate earned
the higher the balance, the higher the interest rate earned
7
Higher risk indicates higher return
TRUE
FALSE
8
Taxes are often owed to the government on profits generated from investments.
FALSE
TRUE
9
Compound interest is best defined as:
The only interest option available
Earning interest on interest.
10
Who would one contact to purchase stocks?
A brokerage firm
The New York Stock Exchange
11
Which savings tool is very liquid and accessible?
Certificate of Deposit
Checking account
12
A stockholder will ALWAYS receive profit when the stock is sold.
FALSE
TRUE
13
Investing as LONG as possible & at the HIGHEST interest rate should result in a large return.
FALSE
TRUE
14
Liquidity is how quickly and easily an asset can be converted into cash.
FALSE
TRUE
15
Which statement best describes inflation?
The fall in the general level of prices
The rise in the general level of prices
16
A type of debt that a COMPANY or the GOVERNMENT issues to investors for a period of time is a:
Bond
Stock
17
Paying Yourself First is when an individual should:
pay all fixed expenses first
set aside money for saving before spending it
18
Savings tools are secure because they are protected by the U.S. government against loss.
TRUE
FALSE
