Personal Finance Chapter 10 - Savings

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Quizzes Created: 1 | Total Attempts: 209
Questions: 10 | Attempts: 209

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Personal Finance Quizzes & Trivia

Learn more about personal finance by taking this interesting trivia!


Questions and Answers
  • 1. 

    Mutual savings banks are common throughout the U.S.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement is false because mutual savings banks are not common throughout the U.S. While mutual savings banks do exist in the U.S., they are not as prevalent as other types of financial institutions such as commercial banks or credit unions. Mutual savings banks are typically found in specific regions or states rather than being widespread across the entire country.

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  • 2. 

    Money market accounts are subject to early withdrawal penalties

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    Money market accounts are not subject to early withdrawal penalties. Money market accounts are a type of savings account that typically offer higher interest rates than regular savings accounts. While there may be limitations on the number of withdrawals or transfers you can make from a money market account per month, there are generally no penalties for early withdrawals. However, it is always important to check the specific terms and conditions of the account before making any withdrawals.

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  • 3. 

    A certificate of deposit earns a fixed interest rate for a specified length of time.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    A certificate of deposit (CD) is a financial product that typically earns a fixed interest rate for a specified period, usually ranging from a few months to several years. This means that the interest rate remains constant throughout the duration of the CD, regardless of any fluctuations in the market. CD's are considered to be a low-risk investment option as they provide a guaranteed return on investment. Therefore, the statement "A certificate of deposit earns a fixed interest rate for a specified length of time" is true.

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  • 4. 

    Credit unions do not provide insurance for their depositors' savings.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    Credit unions do provide insurance for their depositors' savings. This insurance is typically provided by the National Credit Union Administration (NCUA) in the United States. The NCUA offers deposit insurance coverage up to $250,000 per individual depositor, ensuring that if a credit union fails, depositors' savings are protected. Therefore, the statement that credit unions do not provide insurance for their depositors' savings is false.

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  • 5. 

    You may be charged a service fee if you make more than a maximum number of withdrawals from your regular savings account in one month or if your balance falls below a certain minimum.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The statement suggests that there are conditions under which a service fee may be charged for withdrawals from a regular savings account. These conditions include making more than a maximum number of withdrawals in a month or having a balance below a certain minimum. Therefore, the answer "True" indicates that the statement is correct.

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  • 6. 

    Which of the following is not a short-term need?

    • A.

      Unemployment

    • B.

      Weekend Trip

    • C.

      Retirement

    • D.

      Automobile Repair

    Correct Answer
    C. Retirement
    Explanation
    Retirement is not a short-term need because it refers to the period of life when a person stops working and typically relies on savings, pension, or other sources of income. It is a long-term financial goal that requires planning and saving over many years. On the other hand, unemployment, weekend trips, and automobile repair are short-term needs or expenses that can be addressed or fulfilled in the near future.

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  • 7. 

    A savings account at a credit union is called

    • A.

      Money Market Account

    • B.

      Savings Club

    • C.

      Share Account

    • D.

      CD

    Correct Answer
    C. Share Account
    Explanation
    A savings account at a credit union is called a Share Account because credit unions operate on a cooperative basis where members are also owners. When individuals deposit money into a credit union, they become shareholders and have a share in the ownership of the credit union. Therefore, the term "Share Account" is used to describe a savings account at a credit union.

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  • 8. 

    You will receive the greatest gain on your principal if interest is compounded

    • A.

      Quarterly

    • B.

      Daily

    • C.

      Monthly

    • D.

      Annually

    Correct Answer
    B. Daily
    Explanation
    The correct answer is "Daily" because compounding interest daily means that interest is added to the principal every day, allowing for more frequent growth and accumulation of interest. This results in the greatest gain on the principal compared to quarterly, monthly, or annual compounding, where interest is added less frequently.

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  • 9. 

    A stockbroker works for which type of financial institution?

    • A.

      Savings and Loan

    • B.

      Savings Bank

    • C.

      Brokerage Firm

    • D.

      Commercial Bank

    Correct Answer
    C. Brokerage Firm
    Explanation
    A stockbroker works for a brokerage firm because their main job is to buy and sell stocks, bonds, and other securities on behalf of clients. Brokerage firms specialize in facilitating transactions in the financial markets and provide services such as investment advice, research, and trading platforms. They act as intermediaries between buyers and sellers, executing trades and helping clients navigate the complexities of the stock market.

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  • 10. 

    The date on which a CD is due is called the

    • A.

      Beginning date

    • B.

      Maturity Date

    • C.

      Redemption Date

    • D.

      Ending Date

    Correct Answer
    B. Maturity Date
    Explanation
    The date on which a CD is due refers to the maturity date. This is the date when the CD reaches its full term and the investor can redeem or withdraw their funds. It signifies the end of the CD's term and the investor's ability to access the principal amount along with any accrued interest. The maturity date is an important factor for investors to consider when planning their financial goals and determining the appropriate time to invest in a CD.

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  • Current Version
  • Mar 21, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Oct 11, 2011
    Quiz Created by
    Uceagle24
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