MM Chapter 1 And 2 MC Part 2 Question Preview (ID: 23432)


MC 37-38. TEACHERS: click here for quick copy question ID numbers.

At your age, a fully funded emergency fund should be
a) $500
b) $100
c) $5000
d) $1000

Instead of borrowing money for purchases, you should set money aside in a ___ over time and pay with cash
a) sinking fund
b) money market
c) credit card
d) emergency fund

Using the sinking fund, how much do you have to save each money to buy a $4800 car one year from now?
a) $400
b) $275
c) $500
d) $300

The saving habits of Ben and Arthur mentioned in Ch 2 best illustrate which principle of saving?
a) both initial investment and length of time are important
b) rate of return matters
c) amount of initial investment is the key
d) length of time money is invested matters

Which of the following is not a reason your emergency fund should be kept in a separate account away from your spending money
a) so your emergency fund savings can earn a lot of interest
b) so that it is not too easy to access
c) so that it is clear what money is only to be used for emergencies
d) so that you do not get your spending and saving money confused

Which of the following is not one of the 3 basic reasons for saving money?
a) vacations
b) emergency fund
c) purchases
d) build wealth

Which of the following is a reason that people don't save money?
a) all of these
b) they lack discipline
c) they lack focus
d) they do not live on a budget

What does it mean to have a negative savings rate?
a) spending more money than you make and acquiring debt
b) having no savings at all
c) saving for something that is a want instead of a need
d) having a fully funded emergency fund

Using the sinking fund, how much do you have to save each month to buy a $2500 TV in 6 months?
a) $416.66
b) $208.33
c) $250
d) $100

How much money would your savings balance be after one year if you have $1000 earning 2% intrest
a) $1020
b) $1200
c) $1002
d) $1022

If your monthly expenses were $3,000, your fully funded emergency fund should be
a) $9000-$18000
b) $3000-$6000
c) $6000-$9000
d) $3000-$9000

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