Unit 5 Personal Finance

Why would an investor choose an investment with greater risk?

• Higher potential rate of return

• Provide access to capital for people and businesses

• 401K

• Increases financial resources for business investment

Why is investing in a mutual fund considered to be a higher risk investment than a money market fund?

• Higher potential rate of return

• A mutual fund is not insured

• Increases financial resources for business investment

• Provide access to capital for people and businesses

Why are financial institutions important to economic growth?

• Higher potential rate of return

• A mutual fund is not insured

• Increases financial resources for business investment

• Provide access to capital for people and businesses

A line of credit that can be used to repeatedly within a certain credit limit is called

• Open ended credit

• Credit card

• Increases financial resources for business investment

• Provide access to capital for people and businesses

What type of retirement account is considered the most secure?

• Open ended credit

• Credit card

• 401K

• Provide access to capital for people and businesses

What is the best way to keep credit card use under control?

• Net worth

• Pay your balance in full each month

• Pay off your debts

• Federal government loans

Assets-Liabilities=

• Net worth

• You don’t have to carry cash around

• 401K

• Federal government loans

When you borrow a pencil from your teacher who requires something of value as collateral you have obtained a

• Credit card

• Open-ended credit

• Secured loan

• 401K

What is one benefit of charitable giving?

• ability to customize the property to your own likes and needs

• potential accumulation of equity and capital gains at time of sale

• easier mobility

• tax deductions

What is the main benefit of having a debit card to access the money in your checking account?

• Secured loans

• You don’t have to carry cash around

• Pay your balance in full each month

• Scholarships are merit based grants are need based