PF 5.02 Flashcard

Front

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

Back

More liquid than a Certificate of Deposit

Front

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

Back

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

Front

Which of the following statements correctly describes the security level of savings tools? Savings tools are not secure because they have a high risk of losing money., Savings tools are secure because they are protected by the U.S. government against loss., Savings tools are very secure because there are not risks involved with saving or investing., None of the above is true. It would be safer to keep the money at home in a shoe box.

Back

Savings tools are secure because they are protected by the U.S. government against loss.

Front

Hannah needs a savings tool to help her manage her everyday purchases. The savings tool needs to be very liquid and accessible. Which savings tool should Hannah choose? Options: Certificate of deposit, Checking account, Money market deposit account, Any of the above savings tools would help Hannah

Back

Checking account

Front

Which of the following is a feature of a money market deposit account? No minimum balance requirements, Unlimited transactions every month, Tiered interest rates, The money must remain in the account for a specific period of time

Back

Tiered interest rates

Front

Brett plans to save money toward purchasing a car. His co-worker is telling him about a Money Market Account he has that offers a tiered interest rate. What is Brett’s co-worker talking about?

Back

The amount of money he earns depends on the balance, i.e. the higher the account balance the higher the interest rate he would earn.