Mod 10 test

What type of goals are you setting if you set aside money for your child�s education when they are born?

• Long-term goal

• Short-term goal

• Intangible goal

• Medium-term goal

What offers the most predictable income?

• High quality stock

• Gold

• U.S. savings bond

• Mutual funds

What does �paying yourself first� suggest?

• Paying your bills before spending on entertainment

• Setting aside money for regular savings before paying bills

• Spending money on entertainment before paying bills

• Placing your money in risky investments first

How much should a person save in order to be financially secure?

• $500.00

• Six months of expenses

• 10% of your expenses

• Enough money to pay for short term goals

Which of the following is NOT an important reason to have savings that are considered �liquid�?

• Pay for short term goals

• Begin financial security

• Have funds in case of an emergency

• Generate income through investments

Some savings and investment choices have potential for higher earnings. These investments may also be difficult to use right away if you need the money. What does this balance refer to?

• Liquidity risk

• Interest rate risk

• Income risk

• Insurance risk

When comparing and contrasting savings and investments, what is true?

• Savings should be used to pay for medium or long term goals

• Savings is less liquid than investments

• Savings allow for higher returns to be obtained on your money

• Savings should be built first, then investments will follow for longer term goals

Which of the following is the most liquid savings tool?

• Savings account

• Certificate of deposit

• Mutual funds

• Stock in Microsoft

Mary is saving for the down payment on a new vehicle and hopes to have the down payment within 6 months. What type of saving option would you recommend for Mary?

• Stock

• Real estate

• Certificate of Deposit

• Mutual fund

What is wealth?

• Total value of a person�s money in the bank minus what he or she owes

• Total value of what a person owns

• Total value of a person�s money in the bank and certificates of deposits

• Total value of what a person owns minus what he or she owes