24 25 US Government Unit 5 CBA

One of the primary functions of financial institutions in an economy is to

• offer incentives to businesses for investing

• prepare taxes for individuals and businesses

• create investment portfolios for venture capitalists

• provide access to financial capital for people and businesses

Investments with high rates of return are generally accompanied with —

• no risk

• very little risk

• high levels of risk

• lower levels of risk

Which type of bank account is not insured?

• Checking account

• Savings account

• Mutual fund

• Money market fund

What is one advantage to placing savings in a high-risk investment as oppose to putting

savings in a low-risk investment?

• The tax rate on high-risk investments is lower.

• The amount of money needed to invest is lower.

• The money is more secure in a high-risk investment.

• The potential rate of return on investment is higher.

Which of the following retirement investment options is usually offered as a benefit

of employment?

• Bonds

• 401(k)

• Mutual Funds

• College tuition reimbursement

Which investment is considered the most secure in a retirement plan?

• 401(k)

• Public bond

• Mutual fund

• Individual retirement account

A line of credit that allows a borrower to repeatedly use it within a certain monetary amount

is considered to be —

• a secured loan

• open-ended credit

• close-ended credit

• a retirement account

Loans that are obtained by offering an asset to guarantee repayment of the loan

are considered

• default loans

• secured loans

• unsecured loans

• repossession loans

One of the obligations of borrowing money is to —

• cosign loans for others

• make payments on time

• request the lowest interest rate possible

• designate in your will who pays the loan

The most effective way to manage credit card debt is by —

• paying the minimum balance

• paying off the balance each month

• working a part-time job to pay for credit

• finding a credit card with the lowest interest rate