Saving & Investment Strategies Final Assessment

Which of the following describes the degree to which an asset can be quickly bought in the market without affecting the asset’s price?

• Liquidity

• Cash flow

• Value

• Interest

Which of the following involves restricting expenses and keeping the unspent money in one’s own custody for the purpose of accumulating it?

• Investing

• Compounding

• Saving

• Evaluating

Which of the following is interest calculated on the initial principal as well as the accumulated interest of previous periods?

• Compound interest

• Simple interest

• Fixed interest

• Variable interest

How much would $10,000 on deposit at a five percent annual simple interest rate for three years earn?

• $1,250

• $1,500

• $1,576.25

• $2,576.25

Which of the following is a saving certificate with a fixed maturity date and specified fixed interest rate?

• Money market fund

• Certificate of deposit

• High-yield bank account

• Annuity

Which of the following is an employer-sponsored retirement savings plan?

• 401K Plan

• Annuity

• Money market fund

• Savings account

Which of the following is considered to be a long-term goal?

• Purchasing household furniture

• Saving up for a family vacation

• Saving for a college education

• Establishing an emergency fund

Which of the following is a correct statement about mutual funds?

• It is made up of a pool of funds collected from many investors

• It is managed by investors

• It is more risky than individual stocks and bonds

• It puts assets together into one security

Which of the following types of returns are inversely related to interest rates?

• Stock

• Bonus

• Bond

• Mutual fund

Which of the following is a risk management technique which spreads assets into a portfolio with a wide variety of investments?

• Compounding

• Diversification

• Appreciation

• Investment