It is best to have the rate of return on an investment __________ than the rate of inflation.

Higher, to maintain purchasing power

In relation to the other options, how liquid is a savings account?

More liquid than a Certificate of Deposit

Which of the following statements correctly describes the security level of savings tools?

They're secure b/c they're protected by gov't against loss

When taking advantage of the time value of $, which is most likely to result in largest return?

Invest as long as possible,at highest interest rate possible

Which of the following statements is true in regards to paying taxes on investments?

Taxes are often owed on profits generated from investments

Which of the following is a feature of a certificate of deposit (CD)?

Funds deposited in CD are held for a certain length of time.

Simple interest is best defined as:

Interest earned on the principal investment

Which statement is TRUE of mutual funds?

Mutual Funds are diversified investments

Type of debt that co. issues 2 investors 4 specified time.

What is meant by a savings tool that has a tiered interest rate?

The amount of money he earns depends on the balance

A diversified portfolio is desirable because it:

decreases risk by investing $ in variety of investment tools

Which statement best describes inflation?

The rise in the general level of prices

Which statement best reflects the philosophy of “pay yourself first”?

Set aside predetermined amnt 4 saving b4 using $ 4 spending

Which of the following is NOT true in regards to investing in stock?

You will always receive a profit when the stock is sold.

Which statement is the most correct description of liquidity?

How quickly and easily an asset can be converted into cash

The most common relationship between risk and return in investing can be stated as:

higher risk indicates higher return

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Savings and Investing Review

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Take Charge Today Saving & Investing Review

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Questions 22

Answers

1
Who would you contact to purchase stocks?
You should complete this transaction on your own
A brokerage firm
A real estate agent
The New York Stock Exchange
2
Which of the following is a feature of a money market deposit account?
Unlimited transactions every month
$ must remain in the account for a specific period of time
Tiered interest rates
No minimum balance requirements
3
Which tool is very liquid, accessible and can help manage your daily purchases?
Any of the following savings tools would help Hannah
checking account
Certificate of deposit
Money market deposit account
4
It is best to have the rate of return on an investment __________ than the rate of inflation.
Lower, in order ot minimize risk
Higher, to maintain purchasing power
Lower, in order to minimze taxes
Higher, to minimize risk
5
In relation to the other options, how liquid is a savings account?
More liquid than a Certificate of Deposit
More liquid than cash
Less liquid than mutual funds
More liquid than a checking account
6
An investment that is structured to have tax benefits:
Speculative investments
Tax‐advantaged investements
Tax rated bonds
Index funds
7
Which of the following statements correctly describes the security level of savings tools?
Savings tools=not secure b/c they have high risk of losing $
Secure b/c there's no risks involved w/saving/investing
They're secure b/c they're protected by gov't against loss
It would be safer to keep the money at home in a shoe box.
8
When taking advantage of the time value of $, which is most likely to result in largest return?
Inv sm amnt of $ 4 short period at highest int rate possible
Invest at high int rate b/c int is only factor affect return
Invest as long as possible,at highest interest rate possible
Invest large principal amnt, then make no add'l investments.
9
Which of the following statements is true in regards to paying taxes on investments?
Taxes are often owed on profits generated from investments
Taxes always paid on investments-when money's put in/removed
Taxes only paid on employer‐sponsored investment accounts.
Investments=unearned income, taxes not paid on earnings.
10
Which statement shows complete understanding of compound interest?
The effect interest has on the total return on investment
Earning interest on interest
Any form of interest earned from saving or investing
Interest earned on the principal investment
11
Which of the following is a feature of a certificate of deposit (CD)?
Funds deposited in a CD are very liquid.
Funds deposited in CD can be accessed via check/debit card.
Funds deposited in CD are held for a certain length of time.
Funds deposited in a CD have tiered interest rates.
12
Simple interest is best defined as:
Any form of interest earned from saving or investing
Interest earned on the principal investment
The effect interest has on the total return on investment
Earning interest on interest
13
Giving up food from vending machine in order to achieve the goal of saving $100/month is:
opportunity cost
trade-off
interest
specific part of the SMART goal
14
Which statement is TRUE of mutual funds?
Mututal Funds are speculative investments
Mutual Funds are a form of real estate investment
Mutual funds are superior to purchasing a single stock
Mutual Funds are diversified investments
15
A bond is:
A type of investment that is only offered by banks
Type of debt that co. issues 2 investors 4 specified time.
Investment with potential 4 signif fluctuations over time
A share of ownership in a company
16
What is meant by a savings tool that has a tiered interest rate?
The rate of interest earned increases over time
The amnt of $ he earns depends on # of accts had at bank
A tiered account is promoted by scam artists
The amount of money he earns depends on the balance
17
A diversified portfolio is desirable because it:
Indicates investor=good predictor of return on investment
increases the risk/return ratio
limits investors choices to only one or two investment tools
decreases risk by investing $ in variety of investment tools
18
Which statement best describes inflation?
The uncertainty about the return on an investment
Projected value of investment at end of specified time frame
The rise in the general level of prices
The number of times something happens to money
19
Which statement best reflects the philosophy of “pay yourself first”?
You should save whatever $ is left over after paying bills.
You should pay fixed expenses b4 paying flexible expenses.
Set aside predetermined amnt 4 saving b4 using $ 4 spending
Spend $ on items & activities enj. b4 paying other expenses
20
Which of the following is NOT true in regards to investing in stock?
You will always receive a profit when the stock is sold.
A stockholder owns a part of a company.
A stockholder may or may not receive a dividend
Stockholders may pay different prices for the samestock
21
Which statement is the most correct description of liquidity?
Amount of $ needed 2 pay 4 necessities/comforts enjoyed now
The amount of savings available
How quickly and easily an asset can be converted into cash
Measurement of how much person owns once all debts are paid
22
The most common relationship between risk and return in investing can be stated as:
higher risk indicates higher return
higher risk indicates lower return
ower risk indicates higher return
No relationship exists between risk and return

Savings and Investing Review Flashcards | StudBud