Investment, Savings, and Risk Management

When it comes to personal savings, what does the acronym PYF stand for?

• Prepare Your Future

• Pay Your Friends

• Pay Yourself First

• Prepay Your Finances

A saver who wants her savings insured by the FDIC (Federal Deposit Insurance Corporation) wants to use this savings option.

• Stocks

• Bonds

• Mutual Funds

• Savings Accounts

This type of investment is essentially an IOU with a set rate of return. The issuer promises to pay the buyer a certain sum of money at the end of a stated period plus interest payments at specific intervals. This type of investing doesn’t represent ownership in the corporation, government agency, or utility borrowing the money.

• Money Market Account

• Stock

• Bond

• Certificate of Deposit

A long-term investment usually means an investment period of one to three months

• True

• False

Stocks are insured against loss by most banks and credit unions.

• True

• False

By automatically reinvesting dividends, you are buying additional shares and increasing your investment.

• True

• False

Interest is the fee received for the use of money

• True

• False

The higher the probability that some event will happen, the more expensive the insurance premium to protect against that event will be.

• True

• False

List one long-term savings options (Options: Money Market Account, Stocks, Saving Accounts, Bonds, Certificate of Deposits, Savings Accounts, Mutual Funds)

List one short-term savings options (Options: Money Market Account, Stocks, Saving Accounts, Bonds, Certificate of Deposits, Savings Accounts, Mutual Funds)