YIW Middle School Pre/Post Test
10 Questions
1. What is the opportunity cost of saving money?
a. the value of the interest on the savings
b. the products that could be purchased now
c. the possible loss of the savings in case of theft
d. taxes that will have to be paid on the savings and earned interest
2. Juanita has a debit card, a credit card, a certificate of deposit (CD), and an automobile insurance policy. Which one of these is a savings instrument?
a. the debit card
b. the credit card
c. the certificate of deposit
d. the automobile insurance policy
3. Sarah just inherited $20,000. She wants to use this money for her college education in two years. Which of the following savings plans would be best for her to get the highest rate of return over the next two years, if interest rates were to fall after she invests?
a. certificate of deposit
b. a checking account
c. money market account
d. passbook savings account
4. What does the bank pay you for holding your savings?
a. loan
b. profit
c. interest
d. dividend
5. The main difference between simple interest and compound interest is that compound interest is:
a. only received when you own bonds
b. expressed with fractions or decimals
c. only received when you have multiple accounts
d. paid on the principal and all interest previously earned
6. About how many years would it take for $100 to become $200 if $100 is deposited in a savings account with an interest rate of 7.2 percent?
a. 1
b. 5
c. 10
d. 15
7. Which is true about stocks and bonds?
a. Stocks and bonds are both debt instruments
b. Stocks and bonds are both equity instruments
c. Stocks are debt instruments and bonds are equity instruments
d. Stocks are equity instruments and bonds are debt instruments
8. What are two main ways that an investor can get a return from stocks?
a. dividends and a government tax credit for purchasing the stock
b. dividends and an increase in the price of the stock
c. interest and an increase in the price of the stock
d. dividends and interest from the stock
9. Which of the following is the most diversified investment?
a. Stock mutual fund
b. U.S. Savings bond
c. General Motors stock
d. passbook savings account
10. You buy stock in a large corporation. The risk of losing all of the money you invested in the stock is called:
a. inflation risk
b. financial risk
c. liquidity risk
d. interest-rate risk
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