Personal Finance Unit 7 Semester 2

1) What is the process of earning interest on interest that you’ve already earned?

• a. Interesting
• b. Compounding
• c. Accumulating
• d. Saving

2) What is an advantage of a savings account?

• a. The money is available for an emergency
• b. The money can double or triple in a short period of time
• c. The account is riskier that investing in stocks
• d. All of the above

3) What is true about investing?

• a. It is less risky than using a savings account.
• b. It is used to generate money.
• c. Investing includes only common stocks.
• d. All of the above

4) The broad types of investments are known as which of the following?

• a. Asset classes
• b. Speculative investments
• c. High risk types
• d. Dividends

5) What is when someone invests in a variety of places to reduce the overall risk of investing?

• a. Asset classes
• b. Asset speculation
• c. Asset allocation
• d. Asset bonds

6) Speculative investments are which of the following?

• a. No risk
• b. Low risk
• c. Medium risk
• d. High risk

7) A stock is a share of what?

• a. Dividends
• b. Money
• c. Bonds
• d. Ownership

8) What is a legal document that outlines all of the conditions of the bond?

• a. Bond indenture
• b. Bond asset
• c. Bond contract
• d. Bond allocation

9) Municipal bonds are issued by whom?

• a. Federal government
• b. State or local government
• c. Corporations
• d. All of the above

10) What is an advantage of government bonds?

• a. They have a high interest rate.
• b. They are difficult to find.
• c. They are relatively risk-free.
• d. All of the above