Answers26-27 Ignite Economics-KY-EconomicsInvesting and Financial Markets

Investing and Financial Markets — Unit test Answers

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1
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The level of investment in markets often indicates

A
the stability of the government.
B
the state of the economy.
C
the success of individual companies.
D
the stability of a currency.
2
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Look at the table below showing an example of a checkbook ledger.

Question illustration
A
Adrienne forgot to include the $2.00 ATM transaction fee.
B
Adrienne did not use $320.00 as her starting balance.
C
Adrienne deducted $23.50 from her balance instead of $32.50.
D
Adrienne did not enter her ATM withdrawal correctly.
3

Which is the best question for Joe to ask himself when deciding whether to open a checking or savings account?

A
Is there an ATM near my home or work?
B
Does the bank offer free checking?
C
If I need a loan, will they give it to me?
D
Why am I opening a bank account?
4

A high-risk investment is characterized by

A
a greater percentage chance of loss.
B
superior prospects for short-term gains.
C
a smaller percentage chance of loss.
D
lower interest and compound interest rates.
6

Which best describes why investing can be such a challenge?

A
It is impossible to ever earn a return on investments.
B
Investing always requires millions of dollars up front.
C
There are no guaranteed investments.
D
Most investments are insured by the government.
7

If having a warranty on a car is important, a person should buy a car that is .

Answer:

new

8

increaselimitstopmaximize

A
increase
B
limit
C
stop
D
maximize
9

Which is an example of a financial change that would require budgetary consideration?

A
paying monthly rent
B
purchasing furniture
C
saving a certain amount
D
buying a monthly bus pass
10

Why is compound interest preferable to simple interest when investing?

A
Compound interest pays at least double the interest on the principal during each month.
B
Compound interest is paid by the week or by the month, not only once during a year.
C
Compound interest is based on the entire principal, not just a percentage of the principal.
D
Compound interest pays interest both on the principal and the interest earned in each period.
11

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A
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B
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C
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D
no other diet pill offers
12

Why were savings and loans (S&Ls) originally established?

A
to help people invest in small businesses
B
to help people save money
C
to help people buy homes
D
to help people invest in the stock market

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