1. What characteristics should you look for when selecting an account for your emergency reserves?
A) The highest potential return available
B) Low transaction costs
C) Liquidity
D) Safety
E) All but A are important characteristics
2. More compounding periods per year decreases the total amount of interest you receive over the year.
A) True
B) False
3. A(n) ________ is a plan in which you and/or your employer contribute a set amount to a retirement account specifically for you.
A) defined-benefit plan
B) annuity plan
C) vested plan
D) defined-contribution plan
E) immediate annuity plan
4. You bought a 10 year bond for $950. The bond pays a 9 % coupon interest rate every year, divided into two semi-annual payments. How much will you receive every six months?
A) $1000
B) $900
C) $90
D) $45
E) cannot be determined