Quiz Show
Practice, Practice, PracticeMakes…
A’s A’s A’s A’s A’s
TRUE or FALSE?TRUE or FALSE?You would find monthly expenses on a person’s
Income Statement.
TRUE or FALSE?TRUE or FALSE?A budget variance is the
actual amounts you spent throughout the
month.
TRUE or FALSE?TRUE or FALSE?Monthly compounding would benefit a saver more than quarterly
compounding.
TRUE or FALSE?TRUE or FALSE?
You would be jumping for joy if your liquidity ratio was 2.2 months.
TRUE or FALSE?TRUE or FALSE?Online-only banks have less overhead expenses,
so they typically offer better interest rates.
TRUE or FALSE?TRUE or FALSE?
A Balance Sheet is also called a “Statement of
Cash Flow”
TRUE or FALSE?TRUE or FALSE?The interest rate on a
4-year CD would typically be lower than
the rate on a 1-year CD.
TRUE or FALSE?TRUE or FALSE?
Assets and Liabilities would be found on the
Statement of Net Worth.
TRUE or FALSE?TRUE or FALSE?Funds in a savings
account are considered “demand
deposits”
TRUE or FALSE?TRUE or FALSE?The FDIC protects funds in bank accounts: up to $250,000 per account
per institution.
TRUE or FALSE?TRUE or FALSE?You should subtract total
liabilities from your monthly income to find
your net worth.
TRUE or FALSE?TRUE or FALSE?Uh-Oh! Mr. Jackson is insolvent! This means
that his liabilities exceed his assets.
TRUE or FALSE?TRUE or FALSE?
The value of your home is included in your liquid
assets.
A.
B.
C.
D.
E.
A savings bond with a face value of $500 can be purchased
for
None of the above.
$1000
$500
It depends on the current rates in the market
$250
A.
B.
C.
D.
E.
You want to know how much to invest today in an account earning 7% so that you’ll have
$10,000 in 5 years. This is an example of
Insufficient information to determine.
Future Value (Series)
Future Value (Single Amount)
Present Value (Series)
Present Value (Single Amount)
A.
B.
C.
D.
E.
Interest earned on top of previously earned interest is
called
Liquid Interest
Tiered Interest
APR
Simple Interest
Compound Interest
A.
B.
C.
D.
E.
Yeah! You have just calculated your liquidity ratio. What do experts
recommend?
It should be at least 1 year.
The lower, the better.
Less than 3 months is ideal.
The higher, the better.
Between 3 and 6 months.
A.
B.
C.
D.
E.
You need to know 3 important figures in order to calculate the time value of
money. These are
None of the above.
Principle, Series, and Value.
Time, Safety, and Rate.
Liquidity, Principle, and Rate.
Principle, Rate, and Time.
A.
B.
C.
D.
E.
How long will a U.S. Savings Bond continue to accrue
interest?
Forever.
Savings Bonds do not accrue interest.
It depends on current rates in the market.
20 years from date it is issued.
30 years from date it is issued.
A.
B.
C.
D.
E.
APR would be equal to APY when
APR can never be equal to APY.
Interest is compounded daily.
Interest is compounded quarterly.
Interest is compounded semi-annually.
Interest is compounded annually.
Why do CDs pay higher rates of interest than traditional savings accounts?
Because they are less liquid.
We would expect to earn a higher rate of interest if we are “giving up” our
money for a longer period of time (the trade-
off is less liquidity but more return).
Why is FDIC insurance important to savers?
It offers protection.
The federal government, through the FDIC, insures our money in commercial
banks up to $250,000 per account holder per
institution.
What is the best way for a person to start saving money?
Automatic Transfers to a Savings Account.
We should treat “savings” as a “fixed expense” and
“pay ourselves first”. This is best done by setting up automatic
transfers from a checking account to a savings
account.
How does a credit union differ from a commercial bank?
Not-for-profit.Affiliation required.Owned by members.Usually better rates.
Given today’s economy and current interest rates, should a person invest in a 5-year CD? Why or why
not?
Probably not.
Today’s rates are extremely low. It is not wise to lock into a low interest rate for a long
period of time because if rates do increase, you will be missing out on
earning a higher rate of return.