PFL Lessons 1 and 2 Review

Personal Financial Literacy Lesson 2 Review1. Which of the following is an example of

investing?a. Putting money into a piggy bank at home.b. Saving spare change and using it to buy

snacks.c. Buying a U.S. savings bond.d. Buying groceries for the family.

Personal Financial Literacy Lesson 2 Review2. What is the difference between economic

investment and personal investment?a. There is no difference.b. Economic investment involves risk; personal

investment does not involve risk.c. Economic investment involves machines and

technology; personal investment usually involves stocks and bonds.

d. Personal investment involves the risk of losing the amount invested; there is no risk involved in economic investment.

Personal Financial Literacy Lesson 2 Review3. In which of the following ways does

personal investment differ from educational investment?

a. Personal investment involves risk; educational investment always pay off.

b. Personal investment can be easily turned into cash, while educational investment cannot.

c. For personal investment only, costs must be paid in the present.

d. For personal investment only, investors receive returns at some time in the future

Personal Financial Literacy Lesson 2 Review4. Which of the following is not an

investment?a. Buying 100 shares of Microsoft Inc.b. Buying a bond from Microsoft, which

promises to pay back the money plus interest.c. Buying a bond issued by the government of

Mexico.d. Buying a hamburger for lunch.

Personal Financial Literacy Lesson 1 Review5. Which of the following is the best

definition of saving?a. The discount received from buying

something on saleb. Disposable income minus consumption

spendingc. Putting your money under your mattressd. The interest paid on a savings account

Personal Financial Literacy Lesson 1 Review6. Which of the following is a reason to save?a. Your parents place a dollar into your

savings for every dollar you save.b. The penalty for taking your savings out of

the bankc. Not being able to buy something right nowd. Having to go to the bank before making a

purchase

Personal Financial Literacy Lesson 1 Review7. If you have $50 in savings for one year at

an interest rate of 6 percent, how much interest will you earn at the end of the year?

a. $5b. $4c. $3d. $2

Personal Financial Literacy Lesson 1 Review8. If you divide the interest rate paid on

savings into 72, the result tells you how many years it will take for your savings to double if you receive compound interest. At a compound interest rate of 10 percent, how many years will it take to double your money?

a. 2.7 yearsb. 7.2 yearsc. 7.0 yearsd. 10.0 years