Answers2027 Ignite Financial Literacy-Personal Finance - EL3403Investing

Investing — Unit test Answers

15 verified answers
1
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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.
2
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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.
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

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.
5

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
6

Interest on an investment is considered

A
financing.
B
a fee.
C
a penalty.
D
profit
7

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.
8

Which two factors have the greatest influence on risk for an investment? the demand for the investmentthe duration of the investmentthe history of the investmentthe importance of the investmentthe need for the investment

A
the demand for the investment
B
the duration of the investment
C
the history of the investment
D
the importance of the investment
E
the need for the investment
9

Credit unions differ from retail banks because they are

A
owned by their members.
B
owned by their employees.
C
owned and managed by private corporations.
D
owned by shareholders who purchased stock.
10

In which category do commodities belong?

A
long-term investment only
B
short-term investment only
C
either short- or long-term investment
D
neither short- nor long-term investment
11

Which is an example of a short-term investment?

A
savings bond
B
savings account
C
retirement fund
D
checking account
12

Most investors approach risky investments by

A
investing the same way that they do with safer investments.
B
investing more money in the stock of unknown companies.
C
investing less money in low- and medium-risk investments.
D
investing less money in high-risk investments.
13

When the economy grows, the market grows, most likely because

A
more investors are willing to take risks.
B
the government has decreased spending.
C
the government has increased taxation.
D
investors have a greater desire for profits.
14

The graph shows the percentage changes in the investment rate and the gross domestic product (GDP) between 2008 and 2012.

Question illustration
A
can show if the economy is growing or shrinking.
B
occur only when the economy is shrinking.
C
occur only when the economy is growing.
D
have no relation to changes to the GDP.
15

are debt certificates that are purchased by an investor.

Answer not available

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