Ferg CCHS Accounting EOPA Practice 3

The federal government encourages people to use direct deposit for payments such as tax refunds and Social Security benefits.

• True

• False

A savings account usually earns a lower interest rate than a certificate of deposit.

• True

• False

A certificate of deposit allows deposits and withdrawals at any time without financial penalty.

• True

• False

Money market fund depositors have check-writing privileges and can withdraw funds at any time without penalty.

• True

• False

A mutual fund pools the money of many investors primarily for the purchase of stocks and bonds.

• True

• False

Treasury instruments are short-term securities sold to finance the cost of running the government.

• True

• False

Businesses frequently avoid investing in Treasury bonds because of their high-risk potential.

• True

• False

Investors who enjoy taking risks in hopes of earning more money would likely buy stock in newly developed corporations.

• True

• False

Investors diversify by placing money in different categories of investments instead of just one.

• True

• false

That interest rate on TIPS (Treasury Inflation Protected Securities) remains the same for the term of the security while the principal is adjusted to reflect the current CPI (Consumer Price Index).

• True

• False