Saving and Investment Strategies

Which of the following describes the rate at which the general level of prices for goods and services rise?

• Liquidity

• Interest

• Inflation

• Appreciation

Which of the following is the act of buying an asset to generate returns from it over a period of time while also taking care of risk and volatility?

• Investing

• Saving

• Compounding

• Evaluating

Which of the following is interest computed on the principal, excluding previously earned interest?

• Fixed interest

• Compound interest

• Variable interest

• Simple interest

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

• $1,500

• $2,576.25

• $1,576.25

• $1,250

Which of the following are intermediaries between buyers and sellers to facilitate security transactions?

• Insurance companies

• Brokerages

• Commercial banks

• Investment banks

Which of the following is a true statement about saving?

• Saving is income which is not consumed

• Saving is typically for long-term goals

• Saving usually involves a high risk of losing money

• Saving earns a higher return compared to investments

Which of the following is NOT protected by FDIC?

• Savings account

• High-yield bank account

• Certificate of deposit

• Money market fund

Which of the following is a contract between an investor and an insurance company in which the company promises to make periodic payments to the investor?

• High-yield bank account

• Certificate of deposit

• Money market fund

• Annuity

Which of the following is a type of mutual fund which invests only in low-risk securities?

• Certificate of deposit

• High-yield bank account

• 401K plan

• Money market fund

Which of the following does a prepaid tuition plan NOT cover?

• Books and supplies

• Tuition and fees

• Room and board costs

• Computer and peripherals