Answers2026 VA Economics and Personal Finance - ICUnit Test

Unit Test — Unit test Answers

2 verified answers
1
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When discussing a loan, interest rates are expressed as a percentage of the

A
investment fees.
B
the principal.
C
the profit.
D
taxes owed.
2
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The greater the chances are that an investment could lose money, the greater the __________ for the investor.

A
risk factor
B
initial cost
C
loan payment
D
active involvement
3

Each of the following is an example of a fixed expense EXCEPT:

A
mortgage
B
gasoline
C
car insurance
D
car payment
4

Changes in monetary policy occur when the Federal Reserve

A
adjusts business laws to affect the money supply.
B
changes taxation levels to affect the economy.
C
changes spending levels to affect the economy.
D
adjusts interest rates to affect the money supply.
5

Which of these affect real investment value? Check all that apply.

A
fees and expenses
B
inflation
C
nominal interest rate
D
pretax returns
E
taxes
6

How does time generally affect the risk of an investment?

A
Short-term investments are generally less risky than long-term investments.
B
Long-term investments are generally more risky than short-term investments.
C
Time has no effect on the risk of an investment.
D
Short-term investments are generally more risky than long-term investments.
7

Which type of account offers the highest rate of interest?

A
regular checking
B
money market
C
regular savings
D
certificate of deposit
8

Which statement is true of the relationship between risk and return?

A
The greater the risk, the greater the potential return.
B
The relationship between risk and return is always the same.
C
The greater the risk, the lower the potential return.
D
The relationship depends on the individual investment.
9

Which of these is an advantage of checking accounts?

A
Checking accounts prevent the customer from having overdraft fees.
B
Checking accounts allow convenient ways to deposit or withdraw funds.
C
Checking accounts are processed immediately so customer and bank records always match.
D
Checking accounts offer limited checks but offer higher rates of interest.
10

Many checking accounts offer multiple ways of accessing money in addition to checks. Which of these can be used to access money in a checking account?

A
debit card
B
credit card
C
certificate of deposit
D
passbook
11

Which of these is the best reason for Nina to monitor her bank account statements online or on her cell phone app?

A
to know when her bills are due
B
to determine the exact date she can retire
C
to ensure she's paying her fair share in taxes
D
to know how much money she has for budgeting
12

What is the major difference between a nationwide bank and a community bank?

A
The community bank offers more services.
B
The nationwide bank services only local customers.
C
The nationwide bank has fewer branches.
D
The community bank services only local customers.
13

Natasha has $1000 to open a checking account. She can maintain a monthly balance of $600. She also has a savings account at the same bank. Her employer offers direct deposit and she plans to use online bill paying. She writes about eight checks per month. She currently uses the ATM machines at several different banks. Natasha sometimes overdraws her account. Bank Account Terms and ConditionsNatasha wants an account with the lowest fees. Which checking account would be best for Natasha?

Question illustration
A
Account A
B
Account B
C
Account C
D
Account D
14

Income sources can include all of the following EXCEPT:

A
jobs
B
gifts
C
rebates
D
allowances
15

Compared to high-risk investments, low- and medium-risk investments are in higher demand because they

A
are always affordable.
B
last only a short time.
C
are considered safer.
D
guarantee a profit.
16

In which situation would a certificate of deposit (CD) be the best banking choice?

A
Samuel is setting money aside but still needs emergency access to it.
B
Hafsa wants a guaranteed return, and won’t need the money for several years.
C
Darren is looking for an investment that has a very high interest rate.
D
Raj is looking for an investment with a fast return so he can reinvest.
17

Which statements apply to a certificate of deposit (CD)? Choose two answers.

A
It is always purchased as a short-term investment.
B
It can be purchased from a banking institution.
C
It is always purchased as a long-term investment.
D
It can be purchased for almost any amount.
E
It is purchased through an individual's employer.
18

Look at the table below showing an example of a checkbook ledger.

Question illustration
A
$624.50
B
$704.50
C
$755.50
D
$784.50
19

Which is the best reason for saving?

A
to buy what one wants now
B
to leave money to heirs
C
to achieve future goals
D
to accumulate wealth
20

In what way does a 401(k) differ from an individual retirement account (IRA)?

A
A 401(k) is created through an individual’s employer.
B
A 401(k) can be created by individuals who deposit money.
C
A 401(k) allows consumers to contribute before taxes.
D
A 401(k) is a good long-term investment strategy.

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