PF Final

Front

Which of the following is an effective strategy for personal saving? Cover all your wants and needs and save what is left over, Save a certain percentage of each paycheck and deposit it directly into a savings account., Take out a payday loan so you can save before you receive your paycheck., Wait until the end of the month and save whatever is left in your checking account.

Back

Save a certain percentage of each paycheck and deposit it directly into a savings account.

Front

Joelle wants to have an emergency fund to cover 6 months of expenses. Her gross pay is $4,000 and her monthly expenses are $2,000. If she plans to save 10% of her gross pay each month, how long will it take her to build her emergency fund?

Back

30 months

Front

All of the following statements about bank accounts are true EXCEPT:
Historically, savings accounts earn higher returns than investments in the stock market.
If the bank is FDIC-insured, your money up to the FDIC limit is safe, even if the bank fails.
Many banks pay interest on the money you deposit into your savings account.
Money in a checking account is usually easy to access via ATM, debit card, or check.

Back

Historically, savings accounts earn higher returns than investments in the stock market.

Front

If you follow the 50-30-20 rule of budgeting, you'll be putting 50% of your monthly income toward __________, 30% of your monthly income toward __________, and 20% of your monthly income toward ____________.

Back

Needs, Wants, Savings

Front

Experts recommend that you accumulate enough to cover 3 to 6 _________ of expenses in your emergency fund.

Back

Months

Front

Which represents the BEST time to start saving for retirement?

Back

As soon as you have your first full-time job.

Front

You are at the checkout counter at the local supermarket and use your debit card to pay for groceries. Where does the money for this purchase come from?

Back

It is deducted directly from your checking account.

Front

Which of the statements below BEST describes the relationship between risk and return when considering an investment? Investors expect to earn a higher return when they invest in a high risk asset., Investors expect to earn a lower return when they invest in a high risk asset., Investors expect to earn a higher return when they invest in a low risk asset., Investors expect to earn zero return when investing in a low risk asset.

Back

Investors expect to earn a higher return when they invest in a high risk asset.

Front

How is a bond different from a stock?

Back

A bond is a loan you give to an organization while a stock is partial ownership in a company.

Front

As a shareholder in a public company, what are the benefits available to you?

Back

You may receive dividends from the company, if the company pays them, and have ownership of the portion of the company.