Personal Finance Economics

Jenny wants to open a savings account to begin saving to buy a house. Which institution will most likely provide her with the best deposit interest rate? credit union
Jan is risk-averse, but wants to earn the best rate of return in less than two years. Which investment would MOST LIKELY meet Jan’s need? certificates of deposit
You have $1000 in a savings account and the compound interest rate is 5% per year. After 5 years, how much money approximately do you have in the savings account if you left the money to grow? $1275
An advantage of investing in mutual funds, is that they provide diversification for a single investment
-Pays a higher interest rate than a savings account-Limited check-writing ability-Offers benefits of both savings and checking accounts-Require a higher balance than a savings account-FDIC insured money market account
For investments, how are risk and return related? When the risk is high, the return is high.
Which financial service is LEAST LIKELY to be offered by a credit union? trust accounts
Banks and other financial institutions use savings deposits to help borrowers by using deposits to make loans.
How does the risk/return ratio of a government bond compare with that of other types of investments? Government bonds typically provide lower returns, at lower risk.
What is the MOST LIKELY reason for an increase in the price of a specific stock? increased demand for the products produced by that company
If you take out money from a CD before it reaches maturity you must pay the bank a penalty, typically three months’ interest.
How does it help the economy that banks offer incentives (like interest payments, deposit insurance, etc.) to get customers to deposit money with them? It helps prevent people from keeping their cash out of circulation.
Which investment offers the BEST combination of low risk and high return? long-term certificate of deposit

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