This quiz works best with JavaScript enabled. Home > Economics > Saving > Investing > Saving And Investing – Quiz 6 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Saving And Investing Quiz 6 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Compound interest is best defined as: A) Any form of interest earned from saving or investing. B) The effect interest has on the total return on investment. C) Interest earned on the principal investment. D) Earning interest on interest. Show Answer Correct Answer: D) Earning interest on interest. 2. When you diversify your investments it means you A) You put your money in one place. B) You give all your money away. C) You don't save any money. D) You put your money into many different types of investments. Show Answer Correct Answer: D) You put your money into many different types of investments. 3. Only completes orders to buy and sell investments A) Discount brokerage firm. B) Financial advisor. C) Brokerage firm. D) Full-service brokerage. Show Answer Correct Answer: A) Discount brokerage firm. 4. FARRM stands for which of the following A) Farmers of American Ranching and Rural Marketign. B) Farming and Ranching Rural Mercantile. C) Farming Around Rural Ranching Management. D) Farm and Ranch Risk Management. Show Answer Correct Answer: D) Farm and Ranch Risk Management. 5. Reduce, defer, or adjust the current year tax liability A) Risk. B) Tax-advantaged investments. C) Investments. D) Inflation. Show Answer Correct Answer: B) Tax-advantaged investments. 6. The value of the next best alternative that must be forgone as a result of a decision A) Savings. B) Principal. C) Consumption. D) Opportunity cost. Show Answer Correct Answer: D) Opportunity cost. 7. The total return on an investment expressed as a percentage of the amount of money saved A) Return. B) Rate of return. C) Rent. D) Bond. Show Answer Correct Answer: B) Rate of return. 8. It is best to have the rate of return on an investment than the rate of inflation. A) Lower, in order to minimize taxes. B) Higher, to maintain purchasing power. C) Lower, in order to minimize risk. D) Higher, to minimize risk. Show Answer Correct Answer: B) Higher, to maintain purchasing power. 9. Which of the following are safe ways to save? A) Savings Account. B) Money Market Account. C) Certificate of Deposit. D) All of these are safe ways to save. Show Answer Correct Answer: D) All of these are safe ways to save. 10. Insured account offered at banks, usually requiring a higher deposit. A) Savings Account. B) Stock Market. C) Money Market. D) Certificate of Deposit. Show Answer Correct Answer: C) Money Market. 11. Has a higher interest rate than a savings account but has a limited number of withdraws each month A) Money Market account. B) Savings account. C) Certificate of Deposit. D) None of above. Show Answer Correct Answer: A) Money Market account. 12. A saving account in a bank represents the function of money, that holds wealth until it is ready to use: A) Store of value. B) A medium of exchange. C) A standard for deferred payments. D) A measure of value. Show Answer Correct Answer: A) Store of value. 13. 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. A) 457. B) 403(b). C) 401(k). D) 101(r). Show Answer Correct Answer: C) 401(k). 14. What word fits the following definition best? A plan for spending and saving, based on one's income and estimated expenses. A) Social Security. B) Company Retirement. C) Budget. D) Liquidity. Show Answer Correct Answer: C) Budget. 15. Which of the following accounts will give you the LEAST access to your money? A) Simple savings account. B) Money Market. C) Certificate of Deposit (CD). D) Checking Account. Show Answer Correct Answer: C) Certificate of Deposit (CD). 16. Which form of interest provides the GREATEST return? A) Complex. B) Compound. C) Fixed. D) Simple. Show Answer Correct Answer: B) Compound. 17. Identify the investment:-the investor loans money to a city or county government, or a company-money is repaid after a certain date, plus interest is paid-generally considered a safe investment, although not insured by the FDIC A) Savings accounts. B) ETF. C) Bonds. D) Mutual funds. Show Answer Correct Answer: C) Bonds. 18. After you pay your bills and put money away for savings, what is the remainder of your income called? A) Investment income. B) Discretionary income. C) Relegated income. D) Delusional income. Show Answer Correct Answer: B) Discretionary income. 19. This is the total amount borrowed from the bank to purchase a new home. A) Principal. B) Mortgage. C) Interest. D) Down Payment. Show Answer Correct Answer: A) Principal. 20. These are the three basic types of savings accounts A) CDs, stocks, bonds. B) Passbook accounts, time accounts, money market accounts. C) Stocks, bonds, and mutual funds. D) None of the above. Show Answer Correct Answer: B) Passbook accounts, time accounts, money market accounts. 21. Which of the following is interest calculated on the initial principal as well as the accumulated interest of previous periods? A) Simple Interest. B) Variable Interest. C) Fixed Interest. D) Compound Interest. Show Answer Correct Answer: D) Compound Interest. 22. A type of mutual fund with a portfolio constructed to match or track the components of a market index, such as the Standard & Poor's 500 Index ..... A) Mutual fund. B) Stock. C) Speculative investments. D) Index fund. Show Answer Correct Answer: D) Index fund. 23. The act of committing money or capital to an endeavor with the expectation of obtaining an additional income or profit. A) Savings. B) Rule of 72. C) Mutual fund. D) Investing. Show Answer Correct Answer: D) Investing. 24. Rank these investments from safest to riskiest: A) Bonds, Savings accounts, Individual stocks, ETFs. B) Savings accounts, ETFs, Bond, Individual stocks. C) Savings accounts, Bonds, ETFs, Individual stocks. D) Savings accounts, ETFs, Individual stocks, Bonds. Show Answer Correct Answer: C) Savings accounts, Bonds, ETFs, Individual stocks. 25. The last payment of an amortized installment loan, such as a mortgage, is comprised of what percentage of the principal and interest A) 50% principal, 50% interest. B) 75% principal, 25% interest. C) Almost 100% principal. D) Almost 100% interest. Show Answer Correct Answer: C) Almost 100% principal. 26. Interest upon interest is called A) A good deal. B) Compound Interest. C) Principle. D) A double standard. Show Answer Correct Answer: B) Compound Interest. 27. Assume you are 22 years old, have up to $ 5, 000 to invest annually toward retirement. However, your employer is not providing a match or a retirement plan. Select the best financial product for you. A) IRA. B) Savings account. C) 401K or Company matching plan. D) Car. Show Answer Correct Answer: A) IRA. 28. Bank's make their profits primarily by issuing ..... A) Equity. B) Loans. C) Notice deposits. D) Negotiable CDs. Show Answer Correct Answer: B) Loans. 29. An individual's general approach to investment risk is called a(n) A) Investment Philosophy. B) Financial Risk Pyramid. C) Checking Account. D) Portfolio Diversification. Show Answer Correct Answer: A) Investment Philosophy. 30. To automatically save a specified amount from a paycheck for future use. A) PYF. B) PYL. C) THP. D) GMI. Show Answer Correct Answer: A) PYF. ← PreviousNext →Related QuizzesSaving QuizzesEconomics QuizzesSaving And Investing Quiz 1Saving And Investing Quiz 2Saving And Investing Quiz 3Saving And Investing Quiz 4Saving And Investing Quiz 5Saving And Investing Quiz 7Saving And Investing Quiz 8Saving And Investing Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books