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Terms in this set (18)
A savings account should be used for your emergency fund and what else
short term saving goal
What type of investment is considered a debt instrument
What type of investment represents small pieces of ownership in a company
What type of investment involves a pool of money collected from a group of investors.
What type of savings account is where you agree to leave your money alone for a period of time
Certificates of deposit
What type of investment carries the greatest risk
What one place is the best place to keep your emergency fund
money market account
The money you pay for an insurance policy is called
Which type of insurance would cover your costs associated with a car accident
Which type of insurance would cover costs associated with the theft of belongings from your house?
homeowners or renters
Explain why a savings account is not a good option for long-term wealth building
When you put money into a savings account, it will gain only a small amount of interest. If you invest money in something like a mutual fund, your money stands to earn more interest over the long term.
List four ways you can protect yourself against identity theft
dont share your personal info, pin number, phone number, credit or debit card number
What are some ways in which thieves can access your personal information
A stolen wallet or purse, and other documents that are thrown in the trash, internet access to personal devices, and social media sites.
What is the purpose of liability insurance?
Liability insurance protects you if someone sues you because they were hurt on your property or as a result of an accident in which you are at fault
Christina is a friend of yours at school. At lunch today, she was complaining that she has too many passwords to remember. She tells you that she has decided to use the same password for all of her email and social media accounts. In addition, she thinks it would be best just to use something simple like her last name as her go-to password. What advice do you have for her
Write passwords down and dont tell others and dont use the same password for every account you have
Related to insurance, what is a deductible and how does it work?
A deductible is the portion of a bill you must pay before the insurance company will pay their part
Ben just bought his first car. He is in college and is proud of the fact that he saved up and paid cash. Since money is tight and the car isn't worth much, he has decided not to purchase auto insurance. After all, the odds of getting pulled over or into an accident are slim. He's decided to just be careful and forego the cost of insurance. What advice would you give him
Give a little and get a lot
Andrea recently learned about the importance of investing early. She has saved up $1,500 and is ready to invest. She has recently heard about a great new clothing store chain and has decided to purchase stock in the company with her money. What advice do you have for Andrea
You never want to invest all your money in a single stock. While there is a possibility of high returns, there is also a lot of risk. You are better off investing in a mutual fund that provides diversification and lowers risk.
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