Financial Literacy-Saving plans and investment

What is a tool that allows people to save money for future use?

• a debit card

• a dividend

• a savings instrument

• concentrated risk

What is a liquid asset or liquid account?

• when it rains outside the bank

• an account that makes it easy to withdraw and spend funds

• an insurance policy

• an account with extra funds

Savings instruments are used to have available money for emergencies. For less risk, an account used for this purpose is liquid and.......

• insured

• solid

• concentrated

• diversified

Opportunity cost is...

• a way to invest money

• a savings instrument

• how much it costs to apply for a new job

• the next-best alternative that you give up when you make a choice

What is NOT an advantage of a statement savings account?

• You earn a lower interest rate than with other savings instruments

• Your money is easy to access

• You can open the account with a low amount of money

• You can withdraw money whenever you want

What is an advantage of a certificate of deposit (CD)?

• Banks pay a lower interest rate on CDs than any other savings instrument

• The interest rate earned is locked in so it won't drop even if regular rates go down.

• A penalty must be paid if funds are withdrawn early

• A large (about $500) is required to open a CD account

Associated with a savings account, what is interest?

• when funds in an account are fascinating

• money paid by the financial institution to the person who deposited in the account

• money the depositor pays when they open an account

• diversification

A money market deposit account ...

• is offered by a financial institution and is insured

• pays no interest

• does not allow withdrawals

• requires no minimum deposit to open

When we do "would you rather" activities, what might you consider "opportunity cost?"

• the amount of time you spend deciding

• the thing you choose

• the thing you DON'T choose

• the money you would spend on the thing you choose

Investing money involves risk. What is financial risk?

• knowing you will earn more money no matter what

• earning a paycheck

• the possibility of losing all or part of the money you invested

• riding on a roller coaster