WorksheetsSavings & Investing Review
Total questions: 23
Worksheet time: 57mins
Name
Class
Date
1.
Kylee’s Personal Finance class has been discussing the importance of understanding liquidity and she is trying to explain the term to another student. Which statement is the most correct description of liquidity?
a)
How quickly and easily an asset can be converted into cash
b)
The amount of savings available
c)
A measurement of how much a person or household owns once all debts have been paid
2.
Dylan is preparing a presentation about saving and the presentation rubric says that he must include an explanation of compounding interest. Which of the following statements would be the best one for him to include to show that he understands compounding interest?
a)
Interest earned on the principal investment
b)
Any form of interest earned from saving or investing
c)
Earning interest on interest
3.
When a goal has been set to save $100.00 a month for an emergency fund of $2000.00, giving up food from the vending machine to achieve that goal is the:
a)
interest
b)
specific part of the SMART goal
c)
trade‐off
4.
Hannah needs a savings tool to help her manage her everyday purchases. The savings tool needs to be very liquid and accessible. Which of the following savings tools should Hannah choose?
a)
Certificate of deposit
b)
Savings account
c)
Money market deposit account
5.
Which of the following is a feature of a certificate of deposit (CD)?
a)
Funds deposited in a CD are held for a certain length of time.
b)
Funds deposited in a CD have tiered interest rates.
c)
Funds deposited in a CD are very liquid.
6.
The price of money.
a)
Interest
b)
Savings
c)
Risk
d)
Return
7.
The portion of current income not spent on consumption.
a)
Interest
b)
Savings
c)
Liquidity
d)
Return
8.
The uncertainty regarding the outcome of a situation of event.
a)
Inflation Risk
b)
Return
c)
Investment Risk
d)
Risk
9.
The danger that money won’t be worth as much in the future as it is today.
a)
Inflation Risk
b)
Savings
c)
Investment Risk
d)
Risk
10.
The profit or income generated by saving and investing.
a)
Interest
b)
Savings
c)
Return
d)
Liquidity
11.
Assets purchased with the goal of providing additional income from the asset itself but with the risk of loss.
a)
Investment Risk
b)
Return
c)
Inflation Risk
d)
Risk
12.
How quickly and easily assets can be accessed and converted into cash.
a)
Liquidity
b)
Return
c)
Savings
d)
Interest
13.
It is important to have a low interest rate when saving.
a)
True
b)
False
14.
It is important to consider opportunity cost and trade‐offs when determining how to save money.
a)
True
b)
False
15.
A full service general brokerage firm usually charges lower commission fees than a discount broker.
a)
True
b)
False
16.
Real estate returns are capital gains or rent.
a)
True
b)
False
17.
Real estate is a form of owning.
a)
True
b)
False
18.
Stocks are a form of lending.
a)
True
b)
False
19.
An important part of the savings process is to write a savings goal.
a)
True
b)
False
20.
When a company combines the funds of many different investors then invests that money in a diversified portfolio of stocks and bonds is called:
a)
Mutual Fund
b)
Speculative Investments
c)
Real Estate
21.
Conner wants to purchase stocks with the money he received from his tax return. Who would he contact to make the transaction?
a)
A brokerage firm
b)
The New York Stock Exchange
c)
A real estate agent
22.
The most common relationship between risk and return in investing can be stated as:
a)
higher risk indicates lower return
b)
higher risk indicates higher return
c)
lower risk indicates higher return
d)
No relationship exists between risk and return
23.
Which of the following is not true in regards to investing in stock?
a)
A stockholder owns a part of a company.
b)
Depending upon the current market price, stockholders may pay different prices for the same stock.
c)
A stockholder may or may not receive a dividend.
d)
A stockholder will always receive a profit when the stock is sold.
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