Item Titles and Correct Answers Table

What is one benefit of starting to invest money at a young age?

• Interest compounds over time.

• Accounts pay immediate returns.

• Early investing reduces investment risk.

• Investing early guarantees higher interest rates.

• No risk, FDIC insured • Funds are accessible at any time • Low fees • No required minimum balance Which savings option would BEST meet these criteria?

• A. A money market mutual fund

• B. A certificate of deposit

• C. A bank savings account

• D. A money market savings account

Define an ETF account.

• Another name for mutual funds.

• A retirement account that a person can withdraw money from occassionaly

• Single common stock.

• An account that trades several types of stocks and bonds together on the stock market.

Why is purchasing bonds an attractive investment option?

• A. Bonds are easier to buy and sell than other investment options.

• B. Bonds guarantee a consistent increase in value annually.

• C. Bonds are insured under the FDIC.

• D. Bonds pay a fixed rate of return.

How can you create an emergency savings account if you do not have a steady job?

• Get a loan to contribute to the emergency fund.

• Save unexpected tax refunds and birthday cash gifts.

• Start an emergency fund when he gets a salaried employment.

• Invest all earnings in high-return ventures to grow wealth quickly.

You plan to buy a car after college graduation. What financial tool will help you buy a car with a smaller loan?

• Setting up automatic deposits into a 401K from every paycheck

• Saving at least twenty percent for a down payment in a high-yield savings account

• Taking out a loan with an affordable monthly payment for the cost of the car

• Buying an extended warranty on a new car to cover any unexpected expenses

What should be the FIRST step for a first-time home buyer planning to purchase a home?

• Find a loan with a good interest rate

• Pause contributions to a retirement fund

• Find a second job on the weekends to earn more income

• Calculate how much to save each month for a down payment

Why is investing in the stock market a good strategy for a young worker saving for retirement?

• Stocks are low-risk and provide a steady return.

• Stocks are guaranteed to consistently outperform bonds.

• Stocks are easier to access than money saved in certificates of deposit.

• Stocks provide a good return on investment in the long term despite the short-term risks.

When starting your own business, what should you do to transfer your financial risk if you should ever need to?

• Using her house as collateral

• Finding a location in a high traffic area

• Borrowing money from friends and family

• Obtaining insurance in case of damage or theft of her inventory

Which methods can lower the risk of losing money in investments? Select TWO correct answers.

• A. Investing in more than one type of asset

• B. Taking payday loans to have money to invest

• C. Holding on to investments for a long time

• D. Using high-value property as collateral to obtain money to invest

• E. Investing in high-return investments like cryptocurrency or venture capital