Financial Literacy Quiz

What is liquidity?

• The interest rate that takes the compounding frequency into account

• How quickly you can convert something to cash without significant loss of value

• A type of savings account created by the government

• The original amount deposited

What is a demand deposit?

• Money put into a checking account that can be withdrawn at any time

• A contract between an individual and a financial institution

• The way that interest added to an account earns interest

• A type of account that requires a minimum balance

What is a Negotiable Order Withdrawal (NOW) account?

• A type of account that is very similar to a checking account but requires a minimum balance

• A type of savings account created by the government

• A retirement plan set up by employers

• A contract specifying the length of time money is deposited

What is a savings account?

• Accounts that pay a little higher rate of interest on deposits than NOW accounts

• A type of account that requires a minimum balance

• A retirement plan set up by employers

• The interest rate that takes the compounding frequency into account

What are certificates of deposit?

• A contract between an individual and a financial institution specifying the length of time money is deposited

• A type of savings account created by the government

• A retirement plan set up by employers

• The original amount deposited

What is compound interest?

• The way that interest added to an account earns interest

• The original amount deposited

• A type of savings account created by the government

• A retirement plan set up by employers

What is the principal in financial terms?

• The original amount deposited

• The interest rate that takes the compounding frequency into account

• A type of savings account created by the government

• A retirement plan set up by employers

What is the annual percentage yield?

• The interest rate that takes the compounding frequency into account

• The original amount deposited

• A type of savings account created by the government

• A retirement plan set up by employers

What are individual retirement accounts?

• A type of savings account created by the government to encourage people to save for retirement

• A contract specifying the length of time money is deposited

• The way that interest added to an account earns interest

• The original amount deposited

What does tax deductible mean?

• You can deduct the same amount from your income tax for contributions made to this type of account

• The account’s earnings are not taxed until withdrawn

• A type of savings account created by the government

• A retirement plan set up by employers