Question

1. which feature typically distinguishes a savings account from a checking account?

a. the ability to write checks
b. higher interest rate
c. access to funds via debit card
d. fdic insurance coverage

1. a key advantage of a savings account over a checking account is:

a. no withdrawal limits
b. higher interest rate
c. free check writing
d. no minimum balance requirements

1. which of the following is typically a feature of a savings account?

a. unlimited check writing
b. debit card access for everyday purchases
c. higher interest rates than checking accounts
d. overdraft protection
stock market

1. what term describes the total market value of all of a company’s outstanding shares?

a. net worth
b. market capitalization
c. book value
d. equity ratio

1. in the stock market, what is a dividend?

a. a fee paid to a stockbroker for services
b. a portion of a company’s earnings distributed to shareholders
c. the price difference between buying and selling a stock
d. a loan taken by a company to expand its business

1. the price - to - earnings (p/e) ratio is:

a. the price of a stock divided by its annual earnings per share
b. the total earnings of a company divided by the number of shareholders
c. the dividend yield multiplied by the stock price
d. the company’s debt divided by its equity

1. what typically happens to stock prices when the federal reserve raises interest rates?

a. stock prices usually rise
b. stock prices usually fall
c. stock prices remain unchanged
d. stock prices become more volatile

1. what does diversification in stock investment mean?

a. investing in only one industry
b. spreading investments across various assets to reduce risk

Explanation:

Question 19

To determine the feature distinguishing a savings account from a checking account, we analyze each option:

• Option A: Checking accounts (not savings) allow check - writing. So A is incorrect.
• Option B: Savings accounts generally offer higher interest rates than checking accounts as they are for saving money, while checking is for daily transactions. This is a key distinction.
• Option C: Checking accounts are more likely to offer debit - card access for everyday purchases. Savings accounts are not mainly for this, so C is incorrect.
• Option D: Both savings and checking accounts are often FDIC - insured (up to limits), so D is not a distinguishing feature.

Analyze the advantages of a savings account over a checking account:

• Option A: Savings accounts often have withdrawal limits (e.g., 6 per month under Regulation D), while checking accounts have more flexible withdrawals. So A is incorrect.
• Option B: Savings accounts are designed to hold money for saving, so they typically offer higher interest rates than checking accounts (which are for daily transactions). This is a key advantage.
• Option C: Checking accounts offer free check - writing (or more check - writing options), while savings accounts usually don't allow free or easy check - writing. So C is incorrect.
• Option D: Many checking accounts have no minimum balance requirements, and some savings accounts do. So D is not a typical advantage.

Analyze the features of a savings account:

• Option A: Savings accounts usually do not offer debit - card check - writing. Checking accounts are for that. So A is incorrect.
• Option B: Savings accounts are meant for saving, so they generally offer higher interest rates than checking accounts (which are transaction - based). This is a typical feature.
• Option C: Overdraft protection is more associated with checking accounts (to cover insufficient funds in checking). Savings accounts are not mainly for this, so C is incorrect.
• Option D: This is not a typical feature of a savings account.

Answer:

B. Higher interest rate

Question 20