Consumer Econ - Savings and Investing Review Sem 1 2018-19

Your present self impacts your future self

• true

• false

Which of the following activities will NOT improve your well being?

• Opening a savings account

• Going out for dinner with your sister

• Staying up all night to finish writing a paper

• Hanging out with your friends

When setting financial goals and planning for the future, at what point should you stop planning?

• When your current financial goals have been met.

• When your money management plan has established your high well‐being.

• When you are 65 and ready to retire

• Never - financial planning is an ongoing process

Laila would like to save $100 per month for six months so she can purchase a new phone. This is an example of what type of goal?

• short term

• long term

• mid term

• buying a new phone is not a goal

When fully funded this will cover 6 months worth of expenses.

• financial plan

• umbrella policy

• emergency fund

• principal

When taking advantage of the time value of money, which of the following is most likely to result in the largest return (profit from an investment)?

• Invest a large amount of money and then make no additional investments

• invest as much as possible as long as possible at the highest rate possible, starting when you're young.

• Invest a small amount of money for a short period of time at the highest interest rate possible

• Invest at a high interest rate because interest is the only factor that affects return

Which of the following best explains compounding interest?

• The money he is paying the bank for his car loan

• Any form of interest earned from saving or investing

• Earning interest on the initial amount deposited plus interest already earned; repeating as long as the money is in the investment

• Interest earned on the principal investment

When a goal has been set to save $100.00 a month for an emergency fund of $2000.00, giving up food from the vending machine or coffee every morning to achieve that goal is the:

• opportunity cost

• trade off

• interest

• hardest part

Pay yourself first means

• spend on the fun stuff, then pay the bills

• pay the bills, then spend on fun stuff, then save some.

• put money in your savings first, then pay bills, then spend on fun stuff

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

• higher risk, higher return

• higher risk, lower return

• lower risk, higher return

• No relationship exists between risk and return