LESSON 8

1.Choose the correct answer.

Durability of clothing item refers to: _____________________.

A. Style

B. Price

C. How long it will last

D. Manufacturer's guarantee

2.What is used for collateral to obtain a mortgage?

A. The property being purchased with the mortgage

B. Personal property amounting to a total over $10,000

C. Property other than that being purchased with the mortgage

D. A mortgage is an unsecured loan. No collateral is necessary.

3.One example of a time deposit savings plan would be _________.

A. a regular savings account

B. an installment loan

C. a certificate of deposit

D. a credit union

4.Which of the following best explains why some food items are more expensive in the winter?

A. Fuel prices are higher in the winter, and the price of food reflects the extra expense of fuel.

B. Most farmers take the winter off to spend with their families.

C. Certain food items are out of season in the winter.

D. Transport drivers have to drive slower due to snow and icy conditions. The expense of the extra time spent in transport raises the prices.

5.With regard to income taxes, what is the difference between renting and buying a home?

A. Rent is a tax write off and a mortgage is not.

B. Interest on a mortgage is a tax write off and rent is not.

C. A mortgage is a tax write off and rent is not.

D. Where income tax is concerned, it is more beneficial to buy than to rent.

6.Which could be an example of an opportunity cost from shopping at a club warehouse store?

A. The convenience of buying small quantities to satisfy immediate wants

B. The funds tied up in bulk food inventory being unavailable for other uses

C. The lack of variety of brands that may be found at a supermarket

D. All of the choices

7.What can you do to make sure your vehicle appreciates in value?

A. Clean it regularly.

B. Change the oil in it every 3000 miles.

C. Clean it regularly and change the oil every 3000 miles.

D. Nothing. Cars rarely appreciate in value.

8.What criteria would not be helpful in determining the quality of a product?

A. The reputation of the product

B. How long the product has been available on the market.

C. Other people's opinions of the product

D. The value and benefit of the product

9.Choose the correct answer.

The amount of time you get to use a product and the value you place on that use is called __________.

A. service flow

B. durability rating

C. utility lifespan

D. depreciation factor

10.What is the most common and frequent type of consumer purchase?

A. Gasoline

B. Food

C. Entertainment

D. Clothing

LESSON 9

1.Choose the correct answer.

Ways that individuals can save for retirement are:

A. Pension plans

B. Keogh plans

C. IRS's (Individual Retirement Accounts)

D. All of the choices

2.Which of the following best summarizes how savings bonds benefit investors?

A. Savings bonds are bought for full face value. Each year the bond is saved, its worth increases by 10 percent.

B. Savings bonds are bought for the full face value. Each year the bond is saved, its worth increases by 20 percent.

C. Savings bonds are bought for half of the face value and increase every month as long as it is saved.

D. Savings bonds are bought for half of the face value and increase every month until the face value is reached.

3.If you wanted to save your money and receive the highest possible interest rate, which of the following types of accounts would you open?

A. Passbook savings account

B. Statement savings account

C. High-interest savings account

D. Money market deposit account

4.Which of the following is a characteristic of a savings and loan association?

A. It offers mostly personal loans for durable goods.

B. It deals exclusively in installment debt.

C. It transfers funds among banks and businesses.

D. It accepts deposits and lends funds for commercial and personal use.

5.What is the primary difference between a passbook savings account and a statement savings account?

A. Holders of passbook savings accounts are able to view detailed information at any time, while holders of statement savings accounts receive monthly statements.

B. Holders of statement savings accounts are able to view detailed information at any time, while holders of passbook savings accounts receive monthly statements

C. Holders of passbook savings accounts receive higher interest for their investments than do holders of statement savings accounts.

D. Holders of statement savings accounts receive higher interest for their investments than do holders of passbook savings accounts.

6.Choose the correct answer.

_____ is the payment received by the owner of the funds for allowing the bank to use it for loans to others.

A. Interest

B. Yield

C. Profit

D. Earnings

7.Choose the correct answer.

_____ are a type of mutual fund that uses investors' money to make short-term loans to businesses and banks.

A. Savings funds

B. Passbook funds

C. Statement funds

D. Money market funds

8.In saving and investing, which of the following has the lowest risk?

A. Passbook savings account

B. Certificates of deposit

C. Stocks

D. Bonds

9.Choose the correct answer.

Companies and all three levels of the government sell bonds to borrow money. Types of bonds are:

A. Tax-exempt & savings bonds

B. Treasury bills and notes

C. Municipal stocks

D. Money market certificates of deposit

10.Which of the following generalizations is correct concerning risk and return?

A. Risk increases with increased return.

B. Risk decreases with increased return.

C. Risk increases with decreased return.

D. Rick increases as return remains stationary.