PERSONAL FINANCE STUDY GUIDE 2024 QUESTIONS WITH COMPLETE ANSWERS ALREADY PASSED

A check which has cleared could still bounce. - CORRECT ANSWER False A deposit would appear as a credit on your bank statement. - CORRECT ANSWER True The individual whose name appears after "Pay to the order of" is known as the "payee." - CORRECT ANSWER True If your cancelled checks are lost or stolen, you should notify the bank immediately to close your account. - CORRECT ANSWER True A service charge would appear as a credit on your bank statement. - CORRECT ANSWER True The individual who signs the check is called the "drawer." - CORRECT ANSWER True A certified check guarantees that the check will not bounce. - CORRECT ANSWER True If money is wired to your account, you must wait a few days before the funds are available to you. - CORRECT ANSWER True What factors should you consider before choosing a savings option? - CORRECT ANSWER Safety and risk, Liquidity, and Earnings Which of the following would be considered the more liquid savings option? - CORRECT ANSWER Savings Accounts Why is it important to diversify your investments? - CORRECT ANSWER To reduce your exposure to risk What is the best way to learn about investing? - CORRECT ANSWER Hire a professional advisor Why is it important to begin investing early for retirement? - CORRECT ANSWER The longer you have to collect, the more money (and interest) you will be able to accumulate What is the main difference between a defined-benefit plan and a defined contribution plan? - CORRECT ANSWER Employees can contribute to a defined contribution plan, employees can contribute to a defined benefits plan, and defined benefit plans are better What is the difference between common stock and preferred stock? - CORRECT ANSWER Preferred stock has less risk Which of the following could cause the stock market to change? - CORRECT ANSWER Industry Trends, Economic Factors, and National and World Events What is an advantage of a mutual fund? - CORRECT ANSWER Diversification, Cost, and Stock Funds What is a disadvantage of investing in real estate? - CORRECT ANSWER Property depreciates in value over time