Investments in stocks have the potential for
very high returns. This also means that
stocks have which other characteristic?
25%
25%
25%
2
3
25%
1. Guaranteed
payments
2. High risk of losses
3. Pay low interest
rates
4. Very difficult to
purchase
1
4
Red Financial is a financial institution owned by a group of
shareholders. They are insured by the FDIC and offer a large range of
financial services and personal financial planning. Red financial also
makes large profits, which the stockholders like. Based on this
information, what type of financial institution is Red Financial?
25%
1.
2.
3.
4.
25%
25%
2
3
25%
Bank
Savings and loans
Credit union
Online transfer
facility
1
4
Fastest Responders
Seconds
Participant
Seconds
Participant
When dealing with investments, as
risk of losing money increases
1.
2.
3.
4.
The rate of return is
usually higher
It is more likely the
investment is short term
More insurance is
needed to protect the
investment
More people take that
risk
25%
1
25%
25%
2
3
25%
4
Banks pay depositors interest to put money in the bank.
When someone takes a loan from a bank they must pay
interest back to the bank. Which statement about these two
interest rates is correct?
25%
1.
2.
3.
4.
25%
25%
2
3
25%
The rate banks pay is equal
to the rate they charge.
The rate banks pay is
regulated by the government
and the rate they charge is
not.
The rate banks charge is
higher than the banks pay.
The rate banks charge is
lower than the rate banks
pay.
1
4
Which component of the Federal Reserve
system holds the most power in regards to
monetary policy?
1. Congress and the
President
2. The Federal Open
Market Committee
3. The Board of
Governors
4. The 12 District
banks
25%
1
25%
25%
2
3
25%
4
Fastest Responders
Seconds
Participant
Seconds
Participant
When dealing with insurance, a person
paying a higher deductible will typically have
25%
1.
2.
3.
4.
25%
25%
2
3
25%
Lower premiums
Higher inflation
Smaller returns
Greater risk
1
4
When the income in households
increases, what is the likely result?
25%
25%
25%
2
3
25%
1. The supply curve
becomes vertical
2. The demand curve
shifts to the left
3. The supply curve will
shift to the left
4. The demand curve
shifts to the right
1
4
What is the typical relationship
between education and income?
1.
2.
3.
4.
Higher education levels yield
lower incomes over time
Higher education levels yield
higher incomes over time
Higher income levels lead to
higher education levels
The relationship between
education and income is
uncertain
25%
1
25%
25%
2
3
25%
4
Fastest Responders
Seconds
Participant
Seconds
Participant
Which financial institution is MOST LIKELY
to require membership and offer low loan
rates to its members?
25%
1.
2.
3.
4.
25%
25%
2
3
25%
Bank
Savings and loan
Credit union
Retail store
1
4
Which is a primary benefit of all
types of insurance?
25%
1.
2.
3.
4.
25%
25%
2
3
25%
Lawsuits are easier to
settle
Insurance keeps prices
low in a market
People can be more
careless
It helps people share
risk
1
4
Blue Financial is a financial institution owned by its
members. It offers lower loan rates and easier application
processes for its members. Based SOLELY on this
information, Blue Financial is MOST LIKELY a
25%
1.
2.
3.
4.
25%
25%
2
3
25%
Credit union
Bank
Savings and loan
Credit card
agency
1
4
Smithville Community Bank pays depositors 2.5% interest
for money put into savings accounts. When they make
loans the bank charges 4% interest. Why is there a
difference in these two rates?
1.
2.
3.
4.
The bank is not as concerned with
attracting depositors as it is with
making loans.
It is a source of profit for the banks to
have a higher interest charged than
interest earned.
The 2.5% rate is the minimum a bank
is allowed to pay for deposits.
People taking out loans demand
higher interest rates than those making
deposits.
25%
1
25%
25%
2
3
25%
4
Shondelle has a large sum of money to invest. She is not
concerned with large return, but is very sensitive to risk.
Which would be the best investment for her?
25%
1.
2.
3.
4.
25%
25%
2
3
25%
A savings account
Checking account
Stock market
Real estate
1
4
Fastest Responders
Seconds
Participant
Seconds
Participant
Bill is choosing between two different savings accounts. One has
simple interest and the other has compound interest. If Bill is
planning on saving money for a long period of time and he wants
the most return on his savings he should choose the account
with
1.
2.
3.
4.
Compound interest because it will
pay an increasing amount of
interest based on the amount of the
original deposit
Simple interest because that
account will pay interest on the total
amount in the account at all times
Simple interest because it is easier
to calculate
Compound interest because it will
pay interest on the original deposit
plus interest earned over time
25%
1
25%
25%
2
3
25%
4
Which factor will have the LEAST impact on
whether a person gets credit or not?
25%
1.
2.
3.
4.
25%
25%
2
3
25%
Collateral, how much the
person’s assets are worth
Character, how willing the
person is to pay back the
loan
Capacity, how able the
person is to pay back the
loan
Compatibility, how much the
loan officer likes the person
1
4
Which shows the correct order of
investments going from MOST risky to
LEAST risky?
25%
1.
2.
3.
4.
25%
25%
2
3
25%
Savings accounts, mutual
funds, stocks, bonds
Stocks, mutual funds, bonds,
savings accounts
Stocks, savings accounts,
mutual funds, bonds
Savings accounts, bonds,
mutual funds, stocks
1
4
Fastest Responders
Seconds
Participant
Seconds
Participant
Bailey makes $20,000 a year and pays 5% in
taxes. Felicia makes $85,000 a year and pays
2.6% in taxes. This type of tax system is
25%
1.
2.
3.
4.
25%
25%
2
3
25%
Regressive
Proportional
Sales
Progressive
1
4
Which type of insurance does a person need if
they wish to continue to receive a paycheck when
they are out of work due to an injury?
25%
1.
2.
3.
4.
25%
25%
2
3
25%
Property
Life
Health
Disability
1
4
Mr. Jones has a large sum of money he wishes to invest.
He wants the largest return possible and is not very
concerned with high risk. Based solely on this information,
the best type of investment of Mr. Jones would be
25%
1.
2.
3.
4.
25%
25%
2
3
25%
Stock
Mutual funds
A savings account
Treasury bonds
1
4
Participant Leaders
Points
Participant
Points
Participant