Title: QUIZ: Savvy Savers Module
Course: Kelly O's Course > Section: Savvy Savers (It's Your Paycheck, Lesson 5) Module

Q: The risk-reward relationship says:
- Risky behavior means an investor always earns a large reward.
- Investors who choose less risky investments are rewarded by earning higher interest rates.
- There is an indirect relationship between risk of loss of principal and expected rate of return.
- There is a direct relationship between risk of loss of principal and expected rate of return.
A: There is a direct relationship between risk of loss of principal and expected rate of return.
If right: That is correct.
If wrong: That is incorrect. There is a direct relationship between risk of loss of principal and expected rate of return.

Q: If you deposited money in a savings account that paid 1% interest, approximately how long would it take your money to double?
- 72 years
- 36 years
- 18 years
- 2 years
A: 72 years
If right: That is correct.
If wrong: This is incorrect. 72 ÷ 1 = 72

Q: Compound interest is
- the price of using someone else’s money.
- the original amount of money deposited or invested.
- interest computed on the sum of the original principal and accrued interest.
- a method to estimate the number of years it will take for an investment or debt to double in value.
A: interest computed on the sum of the original principal and accrued interest.
If right: That is correct.
If wrong: That is incorrect. Compound interest is computed on the sum of the original principal and accrued interest.

Q: If you were to deposit $1,000 into an account that paid 10 percent interest compounded semiannually, how much money would you have in the account one year from now?
- $1,500.00
- $1,102.50
- $1,100.00
- $1,050.00
A: $1,102.50
If right: That is correct.
If wrong: This is incorrect. $1,000 x .05 = $50; $1,000 + 50 =$1,050; $1,050 x .05 = $52.50; $1,050 + $52.50 = $1,102.50