Savings and investments

1)What is the primary purpose of savings account?

• a)To provide loans to customers

• b)To facilitate daily transactions

• c)to save money and earn interest.

• d)To invest in the stock market

2)What is a mutual fund?

• A) A mutual fund is a loan given to businesses for expansion.

• B) A mutual fund is a type of bank account for saving money.

• C) A mutual fund is a government bond that guarantees returns.

• D) A mutual fund is an investment vehicle that pools money from multiple investors to buy a diversified portfolio of securities.

3) A _______________ investment is a long-term investment that typically involves buying property or real estate.

4) Which of the following is considered a low-risk investment?

• A) Stocks

• B)Bonds

• C)Real estate

5) What does "asset allocation" mean?

• A) Investing in a single stock

• B) Dividing investments among different asset categories

• C) Timing the market

• D) Savings set aside for unexpected expenses

6) Which of the following is a common type of retirement account?

• a)401(k)

• b) Certificate of deposit (CD)

• c) Savings bond

• d) Mutual funds

7) What does diversification in investing mean?

• Investing in a single mutual fund
• Putting money only in government bonds
• Buying stocks from the same industry only
• B) Spreading investments across different assets

8) What does the term 'liquidity' refer to in finance?

• A) The duration an asset can be held

• B) The historical performance of an investment

• C) The risk associated with an investment

• D)The ease with which an asset can be converted to cash

9) What is a common advantage of a high-yield savings account?

• A) No interest earned on deposits

• B) Higher fees than traditional savings accounts

• C) Higher interest rates than traditional savings accounts
• D) Limited access to funds

10) What does 'compounding' refer to in the context of savings?

• A) The method of reducing expenses in savings

• B) The strategy of increasing investment risk over time

• C) The process of investing in multiple assets

• D) Earning interest on both the initial principal and the accumulated interest