Financial Concepts Quiz

Which of the following is true about rate of return?

Which of the following is not true about a savings account?

Match the following types of accounts with their characteristics.

• A government-issued debt security that pays interest over a fixed period.

• savings bond

• Combines features of savings and checking accounts, often with limited check-writing ability.

• checking account

• Allows for easy access to funds for daily transactions.

• money market account

• Offers a higher interest rate but charges a fee for early withdrawal.

• certificate of deposit

Gianna is least likely to use money from her investment options to pay for _____

Which of the following is true about investing?

Match the following financial decisions with their advisability for Aileen after inheriting money from her aunt.

• Option that depreciates in value over time

• Save in a low-interest account

• Option that benefits others without financial return

• Donate to charity

• Option with minimal growth potential

• Buy a new car

• Least advisable option for long-term financial security

• Invest in a high-risk stock

Elijah is considering investing in a type of bond that is issued by the government for a term of thirty years. These bonds pay interest until they mature and can be bought from and sold to other investors. Elijah is looking at (a)   .

• Treasury bonds
• Municipal bonds
• Corporate bonds
• Junk bonds

Molly wants to ensure her son receives an inheritance once she passes away. She also wants to make sure he pays the minimum in estate taxes. What low-risk investment option should Molly consider?

• High-risk stocks

• Real estate

• Treasury bonds

• Junk bonds

Jada is an experienced investor, but Kai does not have a lot of experience investing money. Thus, it is recommended that only Jada consider purchasing junk bonds. (a)  

• True
• False

Emma is considering buying stock in a large, established company. She knows that the risk of losing all her money is low but not impossible. True or False?

• True

• False