Unit 6/7 Review

The recommended starting point for an emergency fund is __.

• $400

• $1,000

• $5,000

After your starting point, what is recommended to have in your emergency fund?

• $1,000

• 1 - 2 months living expenses

• 3 - 6 months living expenses

Why is a certificate of deposit (CD) considered such a safe investment?

• It has a high degree of liquidity

• It is only issued by a savings bank

• It pays a known rate of interest

Which of the following statements about 401K plans is accurate?

• It is the same as a 403b

• Employees and employers can contribute to the account

• Pension plans are replacing 401K plans

Which type of interest allows an investor to earn "interest on interest?"

• Simple interest

• Developed interest

• Compound interest

An investment vehicle that combines your money with other investors that trades in diversified holdings and is professionally managed is a...

• Preferred stock

• Corporate bond

• Mutual fund

CD stands for...

• Can of dirt

• Celine Dion

• Certificate of Deposit

All of the following are true about ROTH IRA's except:

• Money can be withdrawn in retirement tax free

• Money is put into the account pre-tax

• With very few exceptions, money cannot be withdrawn until age 59 1/2 without penalty

Which of these represents the amount of money you would pay for an insurance policy to HAVE the policy?

• Deductible

• Policy holder

• Premium

Insurance can help you...

• Minimize monthly expenses

• Financially protect against accidents

• Reduce the chances of getting into an accident