Money Management
Food is an important expense during retirement, and it includes grocery shopping, dining out, and other food-related costs.
Which of the following situations would help decrease your food expenses in retirement?
Choose 1 answer:
A) eating out at restaurants so you don’t have to buy any groceries
B) shopping for groceries in bulk
C) having food delivered so you don’t have to pay for gas
B) shopping for groceries in bulk
Financial institutions provide a variety of services to help people manage their money.
Which financial institutions help people with investment planning?
brokerage firm
financial advisors
Diversification is often seen as one of the most important strategies for investors.
Why is it important to diversify your investments?
Choose 1 answer:Choose 1 answer:
A) to increase the risk and return of your investments
B) to reduce the risk and increase the return of your investments
C) to make sure you only invest in low-risk options
B) to reduce the risk and increase the return of your investments
Diversification helps to reduce risk and increase the return of your investments.
Diversification is often seen as one of the most important strategies for investors.
What is the primary reason to diversify your investment portfolio?
Choose 1 answer:
A) to lower the risk and increase the return of your investments
B) to make sure you only invest in high-return options
C) to raise the risk and return of your investments
A) to lower the risk and increase the return of your investments
Diversification helps to reduce risk and increase the return of your investments.
What is the #1 best investment for 2024?
High-yield savings accounts.
High-yield savings accounts reward you with a higher interest rate than traditional savings accounts, making your money grow faster as it sits in your account.
Retirement is a time in life when people stop working and need to have enough money saved to cover their expenses.
Which of these is a main retirement expense?
Choose 1 answer:Choose 1 answer:
A) volunteering at the local community center
B) paying for healthcare costs
B) paying for healthcare costs
Different types of investments have different levels of risk and return, and you should choose the option that best matches your goals and risk tolerance.
You have $500 to invest.
Which investment option has the lowest risk?
Choose 1 answer:
A) a well-established company's stocks
B) a new start-up business stocks
C) government bonds
Investments that are considered _____ risk are said to have a potential for moderate return.
A) Low
B) Moderate
C) High
B) Moderate
Eliza buried money in the backyard to use in an emergency.
Which of the three functions of money is described here?
Choose 1 answer:
A) Unit of Account
B) Store of value
C) Bartering
D) Medium of exchange
E) Hedge against inflation
B) Store of value
When money acts as a store of value, money is storing purchasing power over time. Eliza is storing her wealth to make purchases in the future instead of using it for purchases today
What is the safest investment with the highest return?
C) Real Estate
Real estate is considered by many to be one of the best safe investments.
When planning for retirement, it is important to be aware of future challenges.
How does life expectancy affect the amount you need to save for retirement?
Choose 1 answer:Choose 1 answer:
A) You won't need to save any more or less money because life expectancy only affects life insurance.
B) You may need to save more money to cover costs for a longer period of time.
Financial markets are places where different types of things (like stocks, bonds, or commodities) are traded.
Which market offers shares of different companies for trade?
Choose 1 answer:
A) money market
B) stock market
C) bond market
B) stock market
You want to start investing in AI companies. You are aware of high risk but are more interested in the possibility of high returns. You want to find an institution that will help you make this investment.
Which type of financial institution can help you with this?
Choose 1 answer:Choose 1 answer:
A) bank
B) insurance company
C) lender
D) brokerage firm
D) brokerage firm
Brokerage firms focus on helping invest in company stocks, bonds, and other types of investments.
Which of the following best explains why a $20 bill is money but a share of stock is not money?
Choose 1 answer:
A) The $20 bill can be used as a medium of exchange, but the share of stock cannot be used to purchase anything.
B) The $20 bill is not an asset, but a share of stock is an asset.
C) The $20 bill does not earn income, but the share of stock does earn income.
D) The $20 bill is an illiquid asset, but the share of stock is a liquid asset.
E) The $20 bill is a store of value, but the share of stock is risky.
A) The $20 bill can be used as a medium of exchange, but the share of stock cannot be used to purchase anything.
The ability to use an asset to buy goods and services is what makes an asset money. Anything that can be used as a way of paying for something is money. A cashier at a store will accept a $20 bill to buy something, but the cashier would not accept a share of stock.
What is the #2 best investment for 2024?
A) Bonds.
B) Money market funds.
C) Mutual funds.
D) Certificates of deposit (CDs)
Certificates of deposit (CDs)
CDs can be a safe, secure way to set aside money for your financial goals. A CD may offer a higher interest rate and APY than a high-yield savings account or money market account.
It is essential to save money for when you stop working, but there are other ways you can boost the amount of money you have during your retirement years.
What strategy can you use to increase the amount of money you have during retirement?
Choose 1 answer:
A) downsize to a smaller home to decrease your expenses
C) retire as early as possible
A) downsize to a smaller home to decrease your expenses
Downsizing to a smaller home can decrease your expenses and free up more money for retirement savings.
Financial institutions and markets play important roles in our economy. They help people save money, get approved for loans, and invest in businesses.
What is the primary role of banks?
Choose 1 answer:
A) printing more money
Primary role of banks is to lend money and provide a safe place for people to store their money.
Different types of investments have different levels of risk and return, and you should choose the option that best matches your goals and risk tolerance.
You have $1000 to invest.
Which investment option has the lowest risk?
Choose 1 answer:
A) a money market account
B) a new technology company's stocks
C) a well-established company's stocks
A) a money market account
This option has the lowest risk of losing money since money markets are considered a safe investment.
Which of the following best describes the difference between nominal interest rates and real interest rates?
Choose 1 answer:
A) nominal interest rates are what banks charge; real interest is what borrowers pay
B) nominal interest is what you earn from a savings account; real interest is what the bank pays savings accounts
C) nominal interest is paid on bonds; real interest is paid on stocks
D) nominal interest rates are not adjusted for inflation; real interest rates are adjusted for inflation
E) nominal interest is adjusted for inflation; real interest is what borrowers pay
D) nominal interest rates are not adjusted for inflation; real interest rates are adjusted for inflation
A nominal interest rate is the rate of interest (that is paid or received) that has not been adjusted for the rate of inflation. For example, if your bank statement says you earned interest on your savings account, that is the nominal interest rate. Real interest is how much is left over after inflation eats away at your earnings.
What is the most risk-free asset?
your network
your mind
U.S. Treasury bills
your time
U.S. Treasury bills
U.S. Treasury bills are generally regarded as the safest investment in the world, which is why domestic and foreign investors buy so many during a downturn
Housing is one of the major retirement expenses and it includes mortgage, or rent, payments, taxes, utilities, maintenance and insurance.
Which of the following situations would help decrease your housing expenses in retirement?
Choose 1 answer:
A) paying off your mortgage before you retire
A) paying off your mortgage before you retire
By paying off your mortgage before you retire, you eliminate one of the biggest housing expenses. This means you won't have to worry about making mortgage payments during retirement, which can help you save money.
Financial institutions provide a variety of services to help people manage their money.
Which financial institutions are typically used for saving money or opening a checking account?
Choose 2 answers:
A) insurance company
B) bank
C) credit union
D) brokerage firm
B) bank
A bank is typically used for saving money or opening a checking account.
C) credit union
Financial institutions and markets are key parts of our society. They play a role in helping us save, invest, and borrow money.
What do financial markets do?
Choose 1 answer:Choose 1 answer:
A) offer a place for people to buy and sell stocks and bonds
B) regulate the stock market
C) store money for people
D) offer loans
A) offer a place for people to buy and sell stocks and bonds
Financial markets are a place for people to buy and sell stocks and bonds.
Which of the following is a paper claim that entitles the buyer of that claim to future income from the seller?
Choose 1 answer:Choose 1 answer:
A) Money
B) A liability
C) A physical asset
D) A financial asset
E) An asset
D) A financial asset
What is the #3 best investment for 2024?
A) U.S. Government I-Bonds
B) Money Market Funds (MMFs)
C) Certificates of Deposit (CDs)
D)U.S. Government Treasury Bills
E)Corporate Bonds
U.S. Government I-Bonds
One of the most significant benefits of Series I bonds is the exceptionally low risk associated with them. As they are backed by the full faith and credit of the United States government, investors can have confidence in the safety and stability of their principal investment.