| A | B |
|---|
| When taking advantage of the time value of money | which of the following is most likely to result in the largest return? |
| When a goal has been set to save $100. 00 a month for an emergency fund of $2000. 00 | giving up food from the vending machine to achieve that goal is the: |
| In relation to the other options | how liquid is a savings account? |
| *The amount of money he earns depends on the balance | i. e. the higher the account balance the higher the interest rate he would earn. |
| The amount of money he earns depends on the number of accounts he has at the depository institution | i. e. the more accounts he has |
| The rate of interest earned increases over time | i. e. leaving money in the account for 3 months would earn a lower interest rate than leaving money in the account for 12 months. |
| Depending upon the current market price | stockholders may pay different prices for the same stock. |
| Lower | in order to minimze taxes |
| Lower | in order ot minimize risk |
| *Higher | to maintain purchasing power |
| Higher | to minimize risk |
| Since investments are considered unearned income | taxes do not have to be paid on earnings. |
