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Savings and Investing Tools Flashcards | StudBud
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Savings and Investing Tools
Savings and Investing Tools
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1
Which statement best describes inflation?
the number of times someone loses money
the projected value of an investment at its maturity date
the rise in the general level of prices
the uncertainty about the return on an investment
2
The most common relationship between risk and return in investing can be stated as
higher risk indicates lower return
lower risk indicates higher return
there is no relationship between risk and return
higher risk indicates higher return
3
In relation to the other options, how liquid is a savings account?
more liquid than a checking account
more liquid than cash
less liquid than mutual funds
more liquid than a certificate of deposit
4
Which of the following is a feature of a money market deposit account?
unlimited transactions each month
money must remain in the account for a specific time period
no minimum balance requirements
tiered interest rates
5
Which of the following statements correctly describes the security level of savings tools?
it's best to keep your money at home in a shoe box
savings tools are not secure; there is high risk of losing $
they're secure; there's no risk with saving or investing
they are secure b/c they are protected by the U.S. gov't
6
Which of the following is NOT true in regards to investing in stock?
a stockholder owns a part of a company
a stockholder may or may not receive dividends
a stockholder will always profit when the stock is sold
stockholders may pay different prices for the same stock
7
Which savings tool should Hannah choose to manage her everyday purchases?
mutual fund
CD
checking account
money market deposit account
8
Which of the following is a feature of a certificate of deposit (CD)?
funds in a CD can be accessed with a check or debit card
funds in a CD are held for a certain length of time
funds in a CD are very liquid
funds in a CD have tiered interest rates
9
A diversified portfolio is desirable because it
decreases risk by investing in a variety of investment tools
limits investors' choices to fewer investment tools
indicates the investor will receive his expected return
increases the risk/return ratio
10
Which statement is TRUE of mutual funds?
they are a form of real estate investment
they are riskier than purchasing a single stock
they are speculative investments
they are diversified investments
