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WorksheetsSaving vs. Investing
Total questions: 31
Worksheet time: 15mins
A bank account that allows you to deposit/withdraw money at any time and earns interest is a
money market fund
money market deposit account
regular savings account
certificate of deposit
The ability to quickly turn an investment into cash is called
liquidity
rate of return
inflation risk
interest
What is the date when money deposited into a Certificate of Deposit (CD) becomes available called?
maturity date
liquidity
rate of return
savings
The interest rate on a CD is __________ than that on a regular savings account.
Lower
Higher
Same
Does not earn interest
If you cash in a CD before the maturity date you will __________ and __________. (select 2)
pay a penalty
pay the interest
lose interest
lose the principal
You earn _______________ by saving money in a savings account.
money
interest
awards
trophies
Which account is used for a fixed period of time and allows restricted access to the funds?
Checking Account
Savings Account
Money Market Deposit Account
Certificate of Deposit
Which account do you usually have to deposit a minimum amount to open the account (typically $1,000)?
Checking Account
Savings Account
Money Market Deposit Account
Certificate of Deposit
Less liquid than savings accounts but earns higher interest rates.
Certificate of Deposit
Checking Account
Money Market Deposit Account
Savings Account
Who insures bank deposits?
Federal Deposit Insurance Corporation (FDIC)
National Credit Union Administration (NCUA)
Federal Reserve
U.S. Treasury Department
Interest rates are tiered based on minimum deposit.
Certificate of Deposit
Checking Account
Money Market Deposit Account
Savings Account
Less liquid than savings accounts but earns higher interest rates.
Certificate of Deposit
Checking Account
Money Market Deposit Account
Savings Account
Glenn recently graduated from college and accepted his first career position. He received a signing bonus of $1,000 for his new job. He plans to buy a new car in one year and has decided to save that $1,000 to use as a down payment on a new car. Which savings tool would you recommend Glenn
utilize and why?
Checking Account because he can quickly access his funds daily and it is the MOST liquid option.
Certificate of Deposit because he can earn a higher interest rate and doesn't need the money for a year
A type of investment that invests in a lot of different companies is called
Stocks
Bonds
Mutual funds
T-bills
What is a stock?
A loan an investor makes to a company or government that pays interest over time.
A share of ownership in a company
A collection of investments sold as a package.
An option to purchase something in the future at todays price.
A key difference between saving and investing is
Saving is for everyone, investing is for the wealthy
Your money is insured when investing, it is not in savings
Investing has a guaranteed return, savings does not
Saving is for emergencies & goals, investing is for long-term wealth
Which would be considered the highest risk investment type?
Stock
Mutual Fund
Bond
Money Market Account
The relationship between risk and return can be stated as
Higher risk indicates higher return
Higher risk indicates lower return
Lower risk indicates higher return
No relationship exists between risk and return
As an investor, if you wanted to diversify (invest in lots of different companies) your retirement portfolio, which financial product should you select?
Stock
Mutual fund
Bond
Bitcoin
Which of the following is the LEAST risky investment?
bonds
stocks
mutual funds
Which of the following is an example of a real estate investment:
A certificate of deposit
A corporate bond
Land to be developed in the future
Partial ownership of a corporation
Bonds are ________
money you lend to a business or government
money the government lends you to invest in a new company
very risky investments
the same as savings accounts
Julia purchases a US Bond with a maturity date that is 10 years away. If she takes out her money after 8 years, she will _________
owe the government money
owe a dividend
make more money
make less money
One benefit of investing in Real Estate is that
You get interest payments
You are guaranteed a return on your investment
The value over time usually increases
Mutual Funds are usually managed by
professional fund managers
bankers
financial planners
There are investment options that GUARANTEE a return on your investment.
True
False
