Saving and Investing Flashcard

Front

What is the main purpose of saving money?

Back

To set aside money for future expenses or emergencies

Front

What is the recommended amount of money to have in an emergency fund?

Back

Three to six months’ living expenses

Front

Which of the following is a characteristic of a regular savings account? It offers high interest rates, It requires a long-term commitment of funds, It allows easy access to money with low risk, It is used for high-risk investments

Back

It allows easy access to money with low risk

Front

What is one advantage of a money market account over a regular savings account?

Back

Higher interest rates

Front

What happens if you withdraw money from a Certificate of Deposit (CD) before the maturity date?

Back

You will face a penalty

Front

What is an example of a low-risk investment? Options: Stocks, Bonds, Cryptocurrency, Real estate

Back

Bonds

Front

What is the primary difference between saving and investing?

Back

Investing is riskier but offers higher potential returns.

Front

What is a stock?

Back

An ownership stake in a company.

Front

Which investment typically provides regular income through interest payments? Options: Stocks, Bonds, Mutual funds, Real estate

Back

Bonds

Front

What is a mutual fund?

Back

A pooled investment that holds a diversified portfolio of stocks, bonds, or other securities.