WorksheetsFin Lit Chapter 1
Total questions: 25
Worksheet time: 13mins
The set of skills and knowledge that allows an individual to make informed and effective decisions with all of their financial resources is called financial literacy.
True
False
Which of the following is true of a certificate of deposit?
you can take money out of it at any time
Money held for a specific term (3/6/9/12 months or longer)
it usually earns a lower rate than a savings account does
none of these are true of a CD
Which is true of a money market account?
it earns a lower interest rate and a lower balance is required
it earns a higher interest rate, but a higher balance required
you cannot write checks from the account
it is a checking account only with no savings feature
Accounts with ________ LIQUIDITY tend to have lower interest rates & lower required minimum balances
low
medium
high
none of these
Accounts with ________ LIQUIDITY tend to have higher interest rates & higher required minimum balances
low
high
medium
none of these
When should you plan financially for the future?
as soon as you get out of high school!
as soon as you own a home!
as soon as you are 18!
as soon as you start earning or receiving any kind of money-the earlier the better!
The increase of an amount of money due to earned interest or dividends is known as:
the time value of money
financial literacy
opportunity cost
financial independence
Pay Yourself First is a concept in financial literacy that means you should....
purchase things you want before things that you need
purchase things you need before things that you want
make a deposit in your savings account at least every 6 months
treat savings as an expense
The loss of potential gain from other alternatives when one alternative is chosen:
pay yourself first
opportunity cost
time value of money
none of these
If you can choose between going out with your friends or studying for a test, and you choose to study for the test, what is the opportunity cost of that decision?
you might get a better grade on the test
you might fail the test
you miss out on the experience of going out with your friends
none of these
The more frequently interest is compounded, the less money you will earn.
TRUE
FALSE
How does the RULE of 72 work?
Divide your interest rate by 72
Divide the number 72 by your interest rate
Multiply your interest rate by 72
Multiply the number 72 by your interest rate
A bank account used to hold savings:
checking account
savings vehicle
bond
stock
Most financial experts suggest that you should save a minimum of ____% of your income
5
10
15
20
Which term refers to how quickly and easily your assets can be turned into cash?
time value of money
compounding frequency
liquidity
savings vehicle
What is the opportunity cost of selecting a pair of KD sneakers for $150 over saving $150 in your savings account?
you will have a new pair of sneakers either way you look at it!
the opportunity to use a coupon for a better price
the opportunity to save money in your savings account
the opportunity to go shopping
This term refers to how often your interest is calculated and added back into your account:
financial literacy
Rule of 72
compounding frequency
certificate of deposit
Saving up for retirement is considered a:
short term goal
medium term goal
long term goal
Which of the following guide our decisions in making purchases?
values
needs
wants
all of these
Cash in your savings account has ____________liquidity.
low
high
A certificate of deposit has _________ liquidity.
low, because you can take money out whenever you need to
high, because you cannot take money out whenever you need to without getting a penalty charged
Money stored in a strong box at home has a higher rate of liquidity than if it was invested in a stock or CD.
TRUE
FALSE
A money market account will pay a higher interest rate but you usually have a higher balance that is required.
TRUE
FALSE
In a certificate of deposit, money is usually held for a specific term of:
3 months
6 months
annually
any of these are options for a CD
The longer you hold your money in a certificate of deposit, the ________ interest you usually receive.
less
more
