Personal Financial Planning - CDs, IRAs & Other Savings Plans

CDs are similar to savings accounts because of which of the following?

• They have high interest rates

• They have a fixed term

• They have a fixed rate

• They accrue interest

Savings accounts are like money market accounts because of which of the following?

• They have a limited number of withdrawals

• They have a low rate of return

• They have a high minimum balance required

• Check writing is authorized

Unlike Roth IRAs, traditional IRAs have which of the following characteristics?

• Restricts the amount of cash which can be contributed

• Allows individuals to save for retirement

• Has tax benefits

• Requires taxes be paid on interest

Mutual funds can be described as which of the following statements?

• Comes in two types, common and preferred

• Are professionally managed

• Provides ownership in a company

• Provides cushion for unforeseen financial conditions in an emergency

CDs are a common way to save money and are offered by most financial institutions. In this instance, CD stands for which of the following?

• Compact disc

• Certificate of development

• Certificate of deposit

• Canadian dollar