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.