Personal Finance (Unit 5 - Part 2) Question Preview (ID: 42037)
Part 2.
TEACHERS: click here for quick copy question ID numbers.
When a goal has been set to save $100.00 a month for an emergency fund of $2,000.00, giving up food from the vending machine to achieve that goal is the:
a) interest.
b) trade-off.
c) opportunity cost.
d) specific part of the SMART goal.
Hannah needs a savings tool to help her manage her everyday purchases. The savings tool needs to be very liquid and accessible. Which savings tool should Hannah choose?
a) Any of the above savings tools
b) Checking account
c) Money market deposit account
d) Certificate of deposit
Which statement is true with regard to paying taxes on investments?
a) Taxes are often owed on profits generated from investments.
b) Since investments are considered unearned income, taxes do not have to be paid on earnings.
c) Taxes only have to be paid on employer-sponsored investment accounts.
d) Taxes are always paid on investments either when the money is placed in the investment or removed from the investment.
In relation to the rate of inflation, it is best to have the rate of return on an investment:
a) lower, in order to minimize risk.
b) lower, in order to minimze taxes.
c) higher, to minimize risk.
d) higher, to maintain purchasing power.
Which is not true with regard to investing in stock?
a) A stockholder owns a part of a company.
b) A stockholder will always receive a profit when the stock is sold.
c) Depending upon the current market price, stockholders may pay different prices for the same stock.
d) A stockholder may or may not receive a dividend.
In relation to other options, how liquid is a savings account?
a) More liquid than a certificate of deposit
b) More liquid than a checking account
c) More liquid than cash
d) Less liquid than mutual funds
Which statement is true of mutual funds?
a) Mutual funds are diversified investments.
b) Mutual funds are a form of real estate investment.
c) Mutual funds are superior purchasing to a single stock.
d) Mututal funds are speculative investments.
Alisa is looking for an investment that is structured to have tax benefits. She should look for information on:
a) index funds.
b) tax-rated bonds.
c) speculative investments.
d) tax-advantaged investments.
Which is a feature of a money market deposit account?
a) No minimum balance requirements
b) Tiered interest rates
c) The money must remain in the account for a specific period of time
d) Unlimited transactions every month
Harris is concerned about the effects of inflation on his investment returns. Which statement best describes inflation?
a) The projected value of an investment at the end of a specified time frame
b) The number of times something happens to money
c) The uncertainty about the return on an investment
d) The rise in the general level of prices
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