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Test Your Financial IQ
In today's financial world, things are always changing. How much do you know about the products and services offered by your bank, including certificates of deposit, loans and accounts? Here is a quick quiz to test your knowledge
How Much Do You Know about CDs, Bank Accounts, Loans and More? Take the quiz below to find out!
Question #1: Certificates of deposit with longer maturities usually provide higher interest rates than those with shorter maturities.
Question #2: Why is the Federal Reserve's interest rate policy important?
a. The Fed dictates what interest rates banks pay on savings accounts and CDs.
b. The Fed sets interest rates to make the stock market go up or down.
c. The Fed tries to keep inflation under control and "influence" the economy by setting the interest rates banks pay and receive for overnight borrowing.
Question #3: Which of the following is a benefit of an automatic savings plan?
b. Helps control spending by moving funds automatically into a savings account
c. Develops a good savings habit
d. All of the above
Question #4: Interest on U. S. Savings Bonds continues forever.
Question #5: What does the "the rule of 72" mean?
a. Years that end in 7 or 2 have usually produced high investment returns.
b. An amount of money roughly doubles when the interest rate and the time period equals 72.
Question #6: Mortgage payments are made up of interest and principal repayment. Which of the following is true?
a. The mix of interest and principal repayment remains the same over the life of the mortgage.
b. In the early years of a mortgage, most of the payment is interest.
c. You pay all the interest first, then pay off the principal.
d. In the early years of a mortgage, most of the payment is principal.