Business Exam Question – Answers
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Graded Assignment
Section 4 Study Questions
Instructions
Save the file in your Finance folder, and name it with Study, the section number, and your first initial and last name. For example, Jessie Robinsons study questions for Section 1 would be named Study1JRobinson.
Answer the questions for each lesson on the same day that you read the lesson. Save the file before closing it each day. Then turn in your answers to the study questions at the end of the section. Review Lesson 4 of the Course Overview for instructions about turning in your study questions.
Assignment
Total score: ____ of 12.0 points
Answer each question fully. Complete sentences are not necessary.
Lesson 1
(Score for Question 1: ___ of 0.5 points)
What is a money market account?
Answer:
It is a bank account that invests your money in low risk investments with predictable interest rates.
(Score for Question 2: ___ of 0.5 points)
What is a liquidation policy?
Answer:
Tells you when and how one is able to remove their money from an account.
(Score for Question 3: ___ of 0.5 points)
What is simple interest?
Answer:
It is interest gained only on the principle amount of an account.
(Score for Question 4: ___ of 0.5 points)
What is compound interest?
Answer:
It is interest that is added to the principle in the account, so that the interest you receive starts to generate its own interest.
(Score for Question 5: ___ of 0.5 points)
What is the time value of money?
Answer:
The assumption that money is worth more the sooner it is received.
(Score for Question 6: ___ of 0.5 points)
Name a strategy for saving money.
Answer:
Collect coins; pay yourself first
Lesson 2
(Score for Question 1: ___ of 0.5 points)
What is investing?
Answer:
It is when you give your money time or energy to do something, in order to get a reward for it in the future.
(Score for Question 2: ___ of 0.5 points)
What is financial risk?
Answer:
The possibility of losing money
(Score for Question 3: ___ of 0.5 points)
What is diversification?
Answer:
It’s the spreading out of one’s investments among many different types.
(Score for Question 4: ___ of 0.5 points)
What is risk tolerance?
Answer:
The amount of risk you are able to handle without being too negatively affected by failed investments.
(Score for Question 5: ___ of 0.5 points)
What are debt investments?
Answer:
They are investments without ownership that promise a specific return on the investment.