2.5 Savings, Emergency Funds, Investing, and Insurance

Multiple Choice

Which of the following best describes saving?

• Spending all your income

• Income not spent

• Borrowing money

• Investing in stocks

Multiple Choice

What is one main advantage of keeping your money in a savings account rather than in a piggy bank or under your mattress?

• It is easier to access

• It earns interest

• It is safer from theft

• It is more fun

Open Ended

Explain the difference between saving and investing, and give an example of each.

Multiple Choice

Why is it important to save money?

• To reach financial goals

• To cover emergencies

• To make major purchases

• All of the above

Multiple Choice

Based on the information from the slides, which of the following are important factors to consider when saving money?

• Return

• Liquidity

• Convenience

• All of the above

Multiple Choice

Which type of savings account typically offers higher interest rates and is backed by the bank, but has limited check-writing ability?

• Money-Market Deposit Account

• Traditional IRA

• Mutual Fund

• Common Stock

Multiple Choice

Which of the following retirement plans are tax-free?

• Roth IRA

• CD accounts

• 401 K

• IRA

Multiple Choice

Which of the following best describes a mutual fund?

• An investment pool where people combine money to buy a variety of stocks and bonds

• A savings account with limited check-writing

• A retirement account with tax benefits

• Shares of ownership in a single company

Multiple Select

Which of the following are tips for investing mentioned in the lesson?

• Use 401K

• Buy high expense mutual funds

• Buy and hold

• Flee the bank for higher yielding investments

Multiple Choice

Historically, what is the average return for stocks as mentioned in the lesson?

• 5%

• 11%

• 33%

• 72%