CHAPTER 10 & 11

Study Guide

1. WHICH OF THE FOLLOWING IDENTIFIES THAT MONEY HAS DURABILITY?

A. sturdy B. light weight C. recognizable D. similar color

STURDY

2. WHICH OF THE FOLLOWING IS NOT A FUNCTION THAT MONEY PERFORMS? A. medium of exchange Standard of value Recognizable currency Store of value

Recognizable currency

3. IF YOU WANTED MONEY TO HAVE VALUE, WHICH ECONOMIC CHARACTERISTICS IS THAT?

A. stability of value Scarcity Acceptability Uniformity

scarcity

4. WHICH OF THE FOLLOWING BEST IDENTIFIES COMMODITY OF MONEY? A. debit card B. paper money C. check D. gold coin

Gold coin

5. IF YOU GIVE SOMEONE A SHEET OF PAPER PROMISING TO PAY THE AMOUNT OWED, WHAT IS THAT?

a. commodity of moneyb. Representative moneyc. Fiat moneyd. International money

Representative money

6. WHAT MAKES FIAT MONEY ACTUALLY WORTH ITS FACE VALUE? A. government backing B. citizens backing C. gold backing D. silver backing

Government backing

7. ALEXANDER HAMILTON IS BEST KNOWN FOR GIVING THE US WHICH OF THE FOLLOWING? A. Federal Reserve B. FDIC C. First Bank of the US D. Commercial Bank

First bank of the U.S.

8. WHEN THE FEDERAL RESERVE ACT WAS SIGNED, WHAT DID IT CREATE? A. National bank B. Securities and Exchange Commission

C. FDIC D. Federal Reserve

Federal reserve

9. WHY WAS THE FDIC CREATED DURING THE GREAT DEPRESSION? A. create jobs B. insure bank deposits C. regulate bank loans D. help with war effort

Insure bank deposits

10. WHICH OF THE FOLLOWING IS NOT A SERVICE THAT COMMERCIAL BANKS OFFER?

A. checking accounts B. savings accounts C. loans D. currency exchange

Currency Exchanges

11. WHAT AMOUNT DOES THE FDIC INSURE EACH ACCOUNT? A. $50,000 B. $100,000 C. $150,000 D. $250,000

$250,000

12. HOW CAN CUSTOMERS “EARN MONEY” AT A BANK? A. accounts earn interest B. continuous deposits towards accounts

C. bank error on accounts D. customers pay interest

Accounts earn interest

13. WHY WOULD AN INDIVIDUAL TAKE OUT A LIFE INSURANCE POLICY? A. increase net worth B. pay off debts when dead

C. cash it in and purchase a Jaguar

D. tax deduction at the end of the year

Pay off debts when dead

14. WHICH OF THE FOLLOWING IS THE MOST COMMON REASON PEOPLE INVEST THEIR MONEY? A. to purchase a car B. to remodel their home C. to eventually retire D. to hide money from the IRS

To eventually retire

15. WHICH OF THE FOLLOWING IS AN EXAMPLE OF A SHORT TERM INVESTMENT GOAL? A. retirement B. paying off the house C. grandkids college fund D. A vacation to Italy

A vacation to Italy!!!!

16. WHICH OF THE FOLLOWING IS AN EXAMPLE OF A LONG TERM INVESTMENT GOAL? A. remodel the house B. purchasing a new car C. retirement D. Christmas shopping

RETIREMENT

17. WHICH OF THE FOLLOWING INVESTMENTS HAS THE HIGHEST RISK LEVELS?

A. stocks B. savings accounts C. CD’s (not the music kind)

D. mutual funds

Stocks

18. IF THE CITY OF CHICAGO WANTED TO BUILD A NEW PARK, WHICH WOULD THEY ISSUE? A. stocks B. municipal bond C. corporate bond D. mutual funds

Municipal Bond

19. IF NINTENDO DECIDES IT NEEDS TO RAISE REVENUE, IT COULD ISSUE WHICH OF THE FOLLOWING? A. municipal bond B. mutual fund C. Treasury Bill D. corporate bond

Corporate Bond

20. WHEN A CUSTOMER INVESTS IN A CD, WHAT SHOULD THEY CONSIDER FIRST?

A. maturity date B. maximum deposit C. name of CD D. NCUA insured

Maturity Date

21. WHAT IS IT CALLED, WHEN AN INVESTOR MAKES MONEY FROM SELLING HIS/HER STOCK? A. profit B. capital gains C. tax deduction D. net gain

Capital Gains

22. MOST INVESTORS WILL PURCHASE WHICH TYPE OF STOCK? A. preferred B. traditional C. common D. admiral

Common

23. THESE COMPANIES: WMT, HD, F, ARE FOUND ON WHICH STOCK EXCHANGE?

A. AMEX B. NASDAQ C. NYSE D. Chicago Futures Market

NYSE

24. WHAT DOES THE ECONOMIC TERM OVER-THE-COUNTER REFER TO? A. stock traded electronically

B. stock traded by brokers C. stock purchased anywhere

D. stock purchased without prescription

Stock traded electronically

25. WHICH STOCK EXCHANGE IS THE OLDEST AND FOUND IN NYC? A. AMEX B. NASDAQ C. NYSE D. Chicago Futures Market

NYSE

26. WHICH TYPE OF STOCK DOES THE NASDAQ MAINLY DEAL WITH? A. agricultural B. futures C. industrial D. technology

Technology

27. WHEN STOCK PRICES RISE STEADILY OVER TIME, WHAT TYPE OF MARKET IS IT?

A. bear B. bull C. buffalo D. bison

Bull

28. WHICH CRITERIA SHOULD INVESTORS CONSIDER BEFORE PURCHASING A BOND?

A. type of bond B. maturity date C. interest rate D. name of bond

Interest rate

29. WHAT IS THE DOW JONES AND S&P 500? A. corporations B. NASCAR races C. mutual funds D. Stock Indices

Stock indices

30. WHEN STOCK PRICES DECLINE STEADILY OVER TIME, WHAT TYPE OF MARKET IS THIS?

A. bear B. bull C. buffalo D. bison

Bear