Personal Financial Literacy 2nd Edition By Joan Ryan – Test Bank
Indicate whether the statement is true or false by writing T for True or F for False on the answer sheet.
1. Most savings accounts are safe because they are insured by the FDIC.
2. Savings accounts typically have early withdrawal penalties.
3. A money market deposit account at a bank is a high-risk investment because it is not insured.
4. A typical CD is not a liquid investment because you must pay a penalty if you withdraw the money before the stated time.
5. Series EE U.S. savings bonds are subject to federal income tax unless they are used to finance education.
6. Some corporate bonds pay interest semiannually at the coupon rate.
7. Interest earnings on corporate bonds are not taxable.
8. A premium bond is one that sells for less than its face value.
9. Investment-grade corporate bonds have high ratings and are considered fairly low-risk.
10. Municipal bonds are issued by state governments and the federal government.
11. Annuities purchased from insurance companies provide a series of regular payments for a set period of time.
12. Money in a traditional IRA may not be withdrawn before age 59 1/2 without paying a penalty.
13. Deposits to a SEP account are taxed at the time they are made.
14. There is no limit to the amount an employee can contribute to a 401(k) plan.
15. A retirement account becomes portable when it is vested and can be rolled over to another account.