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Unit 2: Savings, Investing & Money Management Flashcards | StudBud
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Unit 2: Savings, Investing & Money Management
Unit 2: Savings, Investing & Money Management
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Cash Management, Time Value of Money, Rule of 72, Stocks
Flashcards
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Answers
1
A bank pays a fixed amount of interest, on a fixed amount of money, for a specific time.
Savings Bond
Money Market
Certificate of Deposit
Savings
2
Characteristics of Certificates of Deposit are
all of the above
government insured
low risk and no fees
Time restricted access
3
A low interest earning account used to hold money not spent on consumption.
Money Market
Checking
CD
Savings
4
Inflation can be characterized as
The number of times rates are compounded
A steady rise in the general level of prices
Making a large deposit into any account
Projected value of an investment
5
Which is not an example of a cash management tool?
Savings
Savings Bond
Safety Deposit Box
Money Market
6
A share of stock represents ownership in a company.
True
False
7
How liquid is a savings account?
All of the above
More liquid than cash
Less liquid than mutual funds
More liquid than stocks and bonds
8
What are some reasons people save?
All of the Above
Emergencies
Expenses and future purchases
Investing
9
What is the definition of liquidity?
a beverage
how quickly you can melt a coin
how quickly the account can be converted to cash
turning dollars into gold
10
What account is the most liquid?
Money Market
Savings Bond
Checking
CD
11
The NY Stock Exchange is the oldest and largest stock exchange.
True
False
12
Cash Management Tools are defined as...
The method of saving and investing
Keeping your cash under your mattress
The daily routine of handling money
A place where you keep your cash safe
13
70-20-10 rule says
70% saved, 20% spent, and 10% invested.
70% spent, 20% saved, and 10% invested.
14
How can you get to your money in a checking account?
Online banking
All of the above
Checks
ATM
15
An investment you can purchase from the government at 50% of the face value?
Low Interest Savings
Mutual Fund
Savings Bond
Certificate of Deposit
16
Which savings tool might earn you the most interest?
Certificate of Deposit
Savings Bonds
Checking Account
Money Market
17
How much income should an individual have saved up for emergencies?
6-12 months
3-6 months
1-3 years
1-2 months
18
Define: Dow Jones Industrial
A mix of 500 of the largest companies.
The 30 most significant stocks in the stock market.
A way to purchase stocks through the NYSE
A an industry based company
19
The rule to figure the number of years it takes to double principal using compound interest.
70-20-10 rule
Rule of 72
Financial Risk Pyramid
Interest Rate Rule
20
When you invest you want
High interest rates
Low Interest rates
21
Original amount of money invested or saved is referred to as ________________.
Rule of 72
Interest Rate
Principal
22
Purchasing of assets with the goal of increasing future income.
Liquidity
Time value of money
Investing
Financial Plan
