Saving and Investing

If you want your investment or savings account to be easily turned into cash without losing its value, you should consider the _____.

• rate of return

• yield

• risk

• liquidity

If Sam invested $3,000, earning $300 over six months, his principal is _____.

• $3000

• $300

• $3300

Anne is comparing savings accounts. One account has an interest rate of 1.2 percent compounded yearly, and one account has an interest rate of 1.2 percent compounded monthly. Which account will earn more money in interest?

• the account that earns 1.2 percent compounded monthly

• the account that earns 1.2 percent compounded yearly

Amelia has money in a CD earning 2 percent interest. How long will it take for the money to double?

• thirty-six years

• twenty-four years

• seventy-two years

• eighteen years

An account that earns a higher rate of interest when you make large deposits is called _____.

• basic savings account

• savings account at a credit union

• IDA

• money market account

Felix's parents would like to start saving for their son's college expenses. Which type of savings account should Felix's family open?

• a money market account

• a 529 plan

• an IDA

• a basic savings account

When selecting a savings account, you should look at all the following factors except _____.

• fees

• interest thresholds

• annual percentage yield (APY)

• minimum balance

• taxes paid on the interest

An organized way for people to buy and sell stocks and for corporations to raise money is called the _____.

• stock market

• stock quote

• mutual fund

• stock table

Which of the following is not one of the four common investments?

• retirement accounts

• real estate

• mutual funds

• junk bonds

• stock

Diversifying means _____.

• investing in a variety of types of investments in order to minimize risk

• buying and selling a variety of stock

• contacting a stock broker to invest you money

• withdrawing money from a retirement account