This quiz works best with JavaScript enabled. Home > Economics > Saving > Investing > Saving And Investing – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Saving And Investing Quiz 1 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Large, well established companies A) Income. B) Preferred. C) Blue chip. D) Growth. Show Answer Correct Answer: C) Blue chip. 2. An example of financial institution A) An ATM machine. B) A bank. C) A school. D) A department store. Show Answer Correct Answer: B) A bank. 3. In which year was Farm Credit System established A) 1908. B) 1916. C) 1914. D) 1928. Show Answer Correct Answer: B) 1916. 4. What is a benefit of saving? A) Can Reinvest Earned Money. B) Won't Have Interest on Loans. C) Lower Credit Score. D) Higher Interest Rates. Show Answer Correct Answer: A) Can Reinvest Earned Money. 5. The profit or income generated by saving and investing A) Rate of return. B) Rent. C) Bond. D) Return. Show Answer Correct Answer: D) Return. 6. A retirement savings plan offered by a corporation to its employees; the employee contributes money from his/her gross pay, and the money grows tax deferred. Often times the company will match to certain percentage. A) IRA. B) 401(k). C) Share. D) Mutual Fund. Show Answer Correct Answer: B) 401(k). 7. You would generally be willing to accept more risk in your investments if A) Your time horizon was relatively short. B) You were highly risk-averse. C) You expected to earn a higher rate of return in exchange for acceptance of the risk. D) All of these. Show Answer Correct Answer: C) You expected to earn a higher rate of return in exchange for acceptance of the risk. 8. Which statement is TRUE of mutual funds? A) Mutual funds are superior purchasing to a single stock. B) Mutual funds are diversified investments. C) Mutual funds are speculative investments. D) Mutual funds are a form of real estate investment. Show Answer Correct Answer: B) Mutual funds are diversified investments. 9. You want to purchase stocks with the money you receive from your tax return. Who would you contact to make transactions? A) The New York Stock Exchange. B) A depository institution. C) The company issuing the stocks. D) A full-service or discount brokerage firm. Show Answer Correct Answer: D) A full-service or discount brokerage firm. 10. The following type of bank account has a predetermined deposit amount, interest rate, and time period. A) Certificate of deposit. B) Checking account. C) Savings account. D) None of above. Show Answer Correct Answer: A) Certificate of deposit. 11. If you need money next year for college expenses, which of these investment opportunities should you avoid? A) Stock market. B) Savings account. C) 1 year Certificate of Deposit. D) Money market account. Show Answer Correct Answer: A) Stock market. 12. Which statement is true about liquidity? A) The less liquid the investment, the less return. B) The more liquid an investment, the less return. C) The more liquid an investment, the more return. D) None of these. Show Answer Correct Answer: B) The more liquid an investment, the less return. 13. What is portfolio diversification? A) Spreading risk among many types of investments. B) Collection of investments. C) Investments he. D) Investments held for a long time. Show Answer Correct Answer: A) Spreading risk among many types of investments. 14. In relation to the rate of inflation, it is best to have the rate of return on an investment: A) Higher, to maintain purchasing power. B) Lower, in order to minimize taxes. C) Higher, to minimize risk. D) Lower, in order to minimize risk. Show Answer Correct Answer: A) Higher, to maintain purchasing power. 15. The percent by which your money grows is called ..... A) Interest Rate / Rate of Return. B) Simple Interest. C) Principal. D) Compound Interest. Show Answer Correct Answer: A) Interest Rate / Rate of Return. 16. The formula to calculate simple interest is A) I=psd. B) I=blt. C) R=pit. D) I=prt. Show Answer Correct Answer: D) I=prt. 17. A ..... allows you to store your money in a bank while earning interest. A) Municipal bond. B) Checking account. C) Mutual fund. D) Savings account. Show Answer Correct Answer: D) Savings account. 18. Which of the following are used for operating expenses? A) Intermediate-term loans. B) Long-term loans. C) Operating-term loans. D) Short term loans. Show Answer Correct Answer: D) Short term loans. 19. Identify the investment:-natural resources-minerals-food staples A) Stocks. B) Bonds. C) Commodities. D) Real estate. Show Answer Correct Answer: C) Commodities. 20. The Emphasis of savings is on A) The accumulation of wealth. B) Growth over time. C) Safety of principal. D) Risky investments. Show Answer Correct Answer: C) Safety of principal. 21. Retirement investment taken out after taxes (net income) but withdrawn w/o tax after age 59.5 A) Municipal Bond. B) Roth IRA. C) Traditional IRA. D) 403(b). Show Answer Correct Answer: B) Roth IRA. 22. What is compound interest? A) The interest earned on the principal of an investment. B) The interest earned on a mutual fund. C) The interest earned on a loan. D) The interest earned on both the principal and interest of an investment or savings account. Show Answer Correct Answer: D) The interest earned on both the principal and interest of an investment or savings account. 23. The higher the risk, the higher the potential for greater return (vise versa) A) Shareholder. B) Trade off. C) Liquidity. D) Maturity Date. Show Answer Correct Answer: B) Trade off. 24. When you complete a task yourself rather than paying someone else A) Pay yourself first. B) Saving. C) Interest. D) Do it yourself. Show Answer Correct Answer: D) Do it yourself. 25. Three factors that affect saving money are A) Amount, interest and credit. B) Amount, interest and time. C) Amount, stock and time. D) Interest, stocks and time. Show Answer Correct Answer: B) Amount, interest and time. 26. The percentage rate that is used when calculating the interest (money) paid on a savings, money market, or investment account. A) Rate of Return. B) Rule of 72. C) Simple Interest. D) Interest rate. Show Answer Correct Answer: D) Interest rate. 27. Rule that describes how much you should spend on needs (expenses), wants, and savings. A) 50-10-40. B) 70-20-10. C) 50-30-20. D) 80-10-10. Show Answer Correct Answer: C) 50-30-20. 28. What do IRA's, Roth IRAs, 401ks and 403b all have in common? A) All are combination codes on bank vaults. B) All are long-term savings plan for retirement. C) All are checking accounts that you sign up for at local bank. D) All are short-term savings plans. Show Answer Correct Answer: B) All are long-term savings plan for retirement. 29. Which statement best describes why it is important to choose liquid assets for saving money? A) To increase wealth. B) To pay for monthly bills. C) To provide easily accessible money in case of an emergency. D) To take advantage of unplanned purchase opportunities. Show Answer Correct Answer: C) To provide easily accessible money in case of an emergency. 30. When an asset is described as liquid, it means A) Its value changes all the time. B) You need extra time to get your money. C) It's cash or easy to turn into cash. D) It's easy to figure out its value. Show Answer Correct Answer: C) It's cash or easy to turn into cash. Next →Related QuizzesSaving QuizzesEconomics QuizzesSaving And Investing Quiz 2Saving And Investing Quiz 3Saving And Investing Quiz 4Saving And Investing Quiz 5Saving And Investing Quiz 6Saving And Investing Quiz 7Saving And Investing Quiz 8Saving And Investing Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books