Saving And Investing Quiz!
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The best way to start saving and growing your money is to open a savings account.
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True
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False
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Don't know
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About This Quiz
The Saving and Investing Quiz assesses knowledge on investment risks and types, including real estate, U. S. Savings Bonds, antique automobiles, bank CDs, and mutual funds. It helps learners understand different investment vehicles and their associated risks.
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- 2.
A good way to save money is to spend ______.
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Evenly
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More
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Less
Correct Answer
A. LessExplanation
Spending less money is a good way to save money because it means reducing expenses and keeping more money in your pocket. By spending less, you can avoid unnecessary purchases and prioritize your spending on essential items or experiences. This allows you to allocate your funds more efficiently and potentially build up savings for future goals or emergencies.Rate this question:
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- 3.
Investing in a mutual fund is a good way to diversify your risk.
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True
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False
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Don't know
Correct Answer
A. TrueExplanation
Investing in a mutual fund is a good way to diversify your risk because mutual funds pool money from multiple investors and invest in a diversified portfolio of assets such as stocks, bonds, and other securities. This diversification helps to spread out the risk and reduces the impact of any single investment performing poorly. By investing in a mutual fund, individuals can benefit from the expertise of professional fund managers and gain exposure to a wide range of investments, which can help to mitigate risk and potentially enhance returns.Rate this question:
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- 4.
Depositing money into a bank certificate of deposit would be considered ______ risk.
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Low
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High
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Both
Correct Answer
A. LowExplanation
Depositing money into a bank certificate of deposit would be considered low risk because it is a secure and stable investment. The bank guarantees the return of the principal amount plus interest at the end of the term. This means that the chances of losing money are minimal, making it a safe option for individuals looking for a low-risk investment.Rate this question:
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- 5.
The best way to start actually saving your money is to pay _________ first!
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Your bank
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Your taxes
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Yourself
Correct Answer
A. YourselfExplanation
To start actually saving your money, it is important to prioritize yourself. This means setting aside a portion of your income for savings before paying any other expenses or bills. By paying yourself first, you are ensuring that you prioritize your financial future and build a savings habit. This can be done by setting up automatic transfers to a savings account or allocating a specific amount of money from each paycheck towards savings. By making yourself the first priority, you are more likely to build a healthy savings habit and achieve your financial goals.Rate this question:
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- 6.
Investing in real estate would be considered _________ risk.
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Low
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High
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Both
Correct Answer
A. HighExplanation
Investing in real estate would be considered a high-risk endeavor. This is because real estate investments typically involve large sums of money and can be subject to various factors such as economic fluctuations, market conditions, and property-specific risks. Additionally, real estate investments often require long-term commitments and may have limited liquidity, making them more susceptible to potential losses. Therefore, the correct answer is high.Rate this question:
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- 7.
Investing in antique automobiles would be considered _______ risk.
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Low
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High
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Both
Correct Answer
A. HighExplanation
Investing in antique automobiles would be considered high risk because the value of these vehicles can be unpredictable and fluctuate greatly over time. Factors such as market demand, condition of the vehicle, and rarity can all impact the value. Additionally, maintenance and storage costs can be high, and there is also the risk of damage or theft. Therefore, investing in antique automobiles carries a higher level of risk compared to other investment options.Rate this question:
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- 8.
Investing in U.S. Savings Bonds would be considered _______ risk.
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Low
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High
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Both
Correct Answer
A. LowExplanation
Investing in U.S. Savings Bonds would be considered low risk because they are backed by the U.S. government, making them a safe and secure investment option. The government guarantees the return of the principal amount invested, along with regular interest payments, which provides investors with a stable and predictable return. Therefore, the risk of losing money or not receiving the expected returns is minimal, making U.S. Savings Bonds a low-risk investment option.Rate this question:
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- 9.
Mutual Funds invest all of your money into the stock of one well-known corporation.
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True
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False
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Don't know
Correct Answer
A. FalseExplanation
Mutual funds do not invest all of your money into the stock of one well-known corporation. Instead, they pool money from multiple investors and diversify their investments across a variety of assets, such as stocks, bonds, and other securities. This diversification helps to spread the risk and potentially increase returns. Therefore, the statement is false.Rate this question:
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- 10.
Investing in a corporate bond is the same as buying a share of its stock.
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True
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False
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Don't know
Correct Answer
A. FalseExplanation
Investing in a corporate bond is not the same as buying a share of its stock. When an investor buys a corporate bond, they are essentially lending money to the company in exchange for regular interest payments and the return of the principal amount at maturity. On the other hand, buying a share of a company's stock means becoming a partial owner of the company and having the potential to earn dividends and capital gains. Therefore, the statement that investing in a corporate bond is the same as buying a share of its stock is false.Rate this question:
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Quiz Review Timeline (Updated): Mar 21, 2023 +
Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.
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Current Version
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Mar 21, 2023Quiz Edited by
ProProfs Editorial Team -
Sep 29, 2016Quiz Created by
Fsparks
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