Savings Review Quiz

What does LIQUIDITY mean?

• How quickly and easily an asset can be converted into cash

• A combination of a checking and savings account that tends to pay higher interest than a savings account

• An account at a bank against which checks can be drawn by the account depositor.

What is a Checking Account?

• A combination of a checking and savings account that tends to pay higher interest than a savings account

• An account at a bank against which checks can be drawn by the account depositor.

• A savings account is an account to hold money and make interest. This could be your emergency savings.

What is a Savings Account?

• A combination of a checking and savings account that tends to pay higher interest than a savings account

• An account at a bank against which checks can be drawn by the account depositor.

• An account to hold money and make interest. This could be your emergency savings.

What is a Money Market Account?

• A combination of a checking and savings account that tends to pay higher interest than a savings account

• An account at a bank against which checks can be drawn by the account depositor.

• An account to hold money and make interest. This could be your emergency savings.

What is a Certificate of Deposit?

• An account at a bank against which checks can be drawn by the account depositor.

• An account to hold money and make interest. This could be your emergency savings.

• An insured interest-earning savings tool that allows restricted access to the funds.

1. Which statement best reflects the philosophy of “pay yourself first”?

• Set aside a predetermined amount of money for saving before spending any money

• Pay all fixed expenses before paying flexible expenses

• Save whatever money is left over after paying monthly bills

1. Which of the following describes liquidity?

• the amount of money needed to pay for the necessities and comforts currently enjoyed

• a measurement of how much a person or household owns once all debts have been paid

• how quickly and easily an asset can be converted into cash

1. Shannon needs a savings tool to help her manage her everyday purchases. The savings tool needs to be very liquid and accessible. Which of the following savings tools should Shannon choose?

• Savings Bond

• Checking account

• Certificate of deposit

1. Which account would you put money into so you can remove it quickly for an emergency?

• Savings Account

• Mutual Funds

• Certificate of Deposit

1. Which of the following is a feature of a certificate of deposit (CD)?

• Funds deposited in a CD can be accessed via check or debit card.

• Funds deposited in a CD are very liquid.

• Funds deposited in a CD are held for a certain length of time.