Worksheets6A: Compare Saving and Investing Options
Total questions: 10
Worksheet time: 5mins
What is a Treasury bill?
A long-term investment with a fixed interest rate
A short-term government security with a maturity of one year or less
A type of mutual fund
A savings account with a high interest rate
Which of the following is a characteristic of a certificate of deposit (CD)?
It offers a variable interest rate
It is a type of mutual fund
It has a fixed term and interest rate
It is a government bond
What is a money market account?
An account that invests in stocks
A type of savings account that typically offers higher interest rates
A long-term investment in real estate
A government-issued bond
Which of the following is true about mutual funds?
They are insured by the government
They pool money from many investors to purchase a diversified portfolio of stocks and bonds
They are a type of savings bond
They offer a fixed interest rate
What is a savings bond?
A short-term investment with high liquidity
A long-term investment issued by the government
A type of mutual fund
A high-risk stock
What does a diversified investment portfolio involve?
Investing all money in a single stock
Allocating assets across various types of investments to reduce risk
Investing only in government bonds
Keeping all money in a savings account
What is inflation?
A decrease in the general price level of goods and services
An increase in the general price level of goods and services
A type of investment strategy
A fixed interest rate on savings accounts
What is the principal in financial terms?
The interest earned on an investment
The original sum of money invested or loaned
The total amount of money after interest
The rate of return on an investment
What is the difference between compound and simple interest?
Simple interest is calculated on the initial principal only, while compound interest is calculated on the principal and previously earned interest
Compound interest is calculated on the initial principal only, while simple interest is calculated on the principal and previously earned interest
Both are calculated only on the initial principal
Both are calculated on the principal and previously earned interest
What does inflation-adjusted return mean?
The return on an investment without considering inflation
The return on an investment after accounting for inflation
The interest rate on a savings account
The nominal return on an investment
