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Fool Proof Module 17 Review questions and answers(100- accuracy, already graded A+)
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Fool Proof Module 17 Review questions and answers(100- accuracy, already graded A+)
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Fool Proof Module 17 Reviewquestions and answers(100%
accuracy, already graded A+)
Which answer best defines "opportunity cost"?
A What it costs to take advantage of a great savings opportunity.
B The value of the things you have to give up to get something else.
C The amount you have to pay to do something.
D The amount a seller paid to sell you a product. - answer B The value of
the things you have to give up to get something else.
Which of these are examples of opportunity cost?
A You skip buying new jeans and put the money in your college fund.
B You deposit your entire paycheck in your investment account instead of
cashing it and taking your buddies out to eat.
C You bring your lunch to your part-time job instead of spending $8 on
lunch. You put the $8 in your savings account.
D All of the above. - answer D All of the above.
Which one of the following are examples of unnecessary debt?
A You buy an expensive new car rather than a perfectly good used car.
B You buy your groceries on Friday instead of coupon Monday.
, C You charge clothes you don't really need on a high-interest store credit
card.
D Both A and C. - answer D Both A and C.
If you are saving money to buy a house in eight years your "time horizon"
is:
A Eight years.
B Seven years.
C Seven and a half years.
D Ten years because of house expenses. - answer A Eight years.
What is "compound interest"?
A Interest that is accumulated over a period of time but only occurs in a
passbook savings account.
B When you earn interest on the interest you have already made.
C When you earn interest on only the principal.
D When you earn interest on the difference between the principal and
interest - answer B When you earn interest on the interest you have
already made.
Why do many experts recommend longer "time horizons" if you are
making high-risk investments? Choose the most correct answer.
A If you have a longer time horizon you are capable of making more in
interest in that time period.
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