Personal Finance Assessment Answer
Key Study guide verified to pass
2025/2026
Personal Savings and Investing
Understanding Personal Savings
PYF stands for Pay Yourself First when it comes to personal savings.
The degree of risk, accessibility of funds, and rate of return are key factors in saving and investing.
Short-term and Long-term Savings Options
Short-term options: savings accounts, certificates of deposit, and money market accounts.
Long-term options: stocks, bonds, and mutual funds.
FDIC Insured Savings
A saver wanting FDIC insurance should choose a savings account.
Types of Investments
Bonds are essentially IOUs with a set rate of return, promising a sum of money at the end of a period.
Risk Management and Insurance
Investment Periods and Insurance
Long-term investments typically span years, not months.
Stocks are not insured by banks or credit unions against loss.
Reinvesting dividends increases your investment by buying additional shares.
Interest is the cost of using borrowed money.
Insurance premiums increase with the probability of an event happening.
Types of Insurance Policies
People purchase insurance primarily for protection against risk.
Common insurance types include auto, health, and home insurance.
Key Study guide verified to pass
2025/2026
Personal Savings and Investing
Understanding Personal Savings
PYF stands for Pay Yourself First when it comes to personal savings.
The degree of risk, accessibility of funds, and rate of return are key factors in saving and investing.
Short-term and Long-term Savings Options
Short-term options: savings accounts, certificates of deposit, and money market accounts.
Long-term options: stocks, bonds, and mutual funds.
FDIC Insured Savings
A saver wanting FDIC insurance should choose a savings account.
Types of Investments
Bonds are essentially IOUs with a set rate of return, promising a sum of money at the end of a period.
Risk Management and Insurance
Investment Periods and Insurance
Long-term investments typically span years, not months.
Stocks are not insured by banks or credit unions against loss.
Reinvesting dividends increases your investment by buying additional shares.
Interest is the cost of using borrowed money.
Insurance premiums increase with the probability of an event happening.
Types of Insurance Policies
People purchase insurance primarily for protection against risk.
Common insurance types include auto, health, and home insurance.
