This quiz works best with JavaScript enabled. Home > Saving > Investing > Saving And Investing – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Saving And Investing Quiz 1 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Large, well established companies A) Growth. B) Income. C) Blue chip. D) Preferred. Show Answer Correct Answer: C) Blue chip. 2. An example of financial institution A) A department store. B) A bank. C) A school. D) An ATM machine. Show Answer Correct Answer: B) A bank. 3. In which year was Farm Credit System established A) 1908. B) 1914. C) 1916. D) 1928. Show Answer Correct Answer: C) 1916. 4. What is a benefit of saving? A) Higher Interest Rates. B) Lower Credit Score. C) Can Reinvest Earned Money. D) Won't Have Interest on Loans. Show Answer Correct Answer: C) Can Reinvest Earned Money. 5. The profit or income generated by saving and investing A) Return. B) Rent. C) Bond. D) Rate of return. Show Answer Correct Answer: A) 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 speculative investments. B) Mutual funds are diversified investments. C) Mutual funds are a form of real estate investment. D) Mutual funds are superior purchasing to a single stock. 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) A full-service or discount brokerage firm. B) A depository institution. C) The New York Stock Exchange. D) The company issuing the stocks. Show Answer Correct Answer: A) 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) Savings account. B) Money market account. C) 1 year Certificate of Deposit. D) Stock market. Show Answer Correct Answer: D) 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 held for a long time. D) Investments he. 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) Lower, in order to minimize taxes. B) Lower, in order to minimize risk. C) Higher, to maintain purchasing power. D) Higher, to minimize risk. Show Answer Correct Answer: C) Higher, to maintain purchasing power. 15. The percent by which your money grows is called ..... A) Principal. B) Interest Rate / Rate of Return. C) Compound Interest. D) Simple Interest. Show Answer Correct Answer: B) Interest Rate / Rate of Return. 16. The formula to calculate simple interest is A) I=psd. B) I=prt. C) R=pit. D) I=blt. Show Answer Correct Answer: B) I=prt. 17. A ..... allows you to store your money in a bank while earning interest. A) Savings account. B) Checking account. C) Municipal bond. D) Mutual fund. Show Answer Correct Answer: A) Savings account. 18. Which of the following are used for operating expenses? A) Short term loans. B) Intermediate-term loans. C) Long-term loans. D) Operating-term loans. Show Answer Correct Answer: A) Short term loans. 19. Identify the investment:-natural resources-minerals-food staples A) Commodities. B) Real estate. C) Stocks. D) Bonds. Show Answer Correct Answer: A) Commodities. 20. The Emphasis of savings is on A) Growth over time. B) Risky investments. C) Safety of principal. D) The accumulation of wealth. Show Answer Correct Answer: C) Safety of principal. 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