Starting a Savings Plan

What is one characteristic of Money Market Deposit Accounts?

• High risk

• Easily accessible, but limited transactions

• Not FDIC insured

• Offered by brokerages

Fill in the blank: Money Market Deposit Accounts have a ______ interest rate than savings.

• Higher

• Lower

• Equal

• Variable

What are the two types of corporate bonds mentioned?

• A) Investment grade bonds and municipal bonds

• B) Investment grade bonds and "junk" bonds

• C) Treasury bonds and "junk" bonds

• D) Treasury notes and municipal bonds

Stocks are associated with the highest _______.

• risk

• profit

• stability

• interest

Where can you obtain stocks?

• From stock brokers and online brokerages

• From banks and credit unions

• From government offices

• From retail stores

Fill in the blank: The average annual inflation rate from 1926-2005 was _____.

• 2.69%

• 3.50%

• 1.85%

• 4.20%

Using the 'Rule of 72', calculate the time it takes to double your money at an interest rate of 6%. Fill in the blank: 72 / 6% = ___ years.

• 12 years.

• 10 years.

• 15 years.

• 8 years.

What is a savings account primarily used for?

• Taking out loans

• Investing in stocks

• Keeping money safe while earning interest

• Buying real estate

What is the significance of the term "liquidity" in relation to savings accounts?

• It refers to the ability to quickly convert investments into cash without significant loss in value

• It indicates the level of risk in the stock market

• It describes the fixed interest rate of a CD

• It measures the performance of mutual funds

What is the purpose of a Certificate of Deposit (CD)?

• To provide a no-risk stock investment

• To allow unlimited withdrawals

• To lock in a fixed interest rate for a specified term

• To invest in mutual funds