Choose wisely. There is only one correct answer to each question.
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1.
An automatic savings plan withdraws money from an existing savings or checking account on a periodic basis and deposits it into another account.
True. The period is usually monthly or weekly.
2.
Which of the following can be sources of extra money with which to start funding an automatic investment plan?
All of the above. All of these ideas can work.
3.
If you are averse to risk and you want to save money for a purchase three months from now, why would a savings account be a good choice to put your money into?
It has a low risk of loss. This may make it an ideal choice.
4.
An advantage of using an automatic investment plan to fund a retirement account is that it can benefit from compounded earnings as it grows.
True. Most retirement plans benefit from compounded growth of earnings.
5.
Automated transfers of money between two accounts require that those accounts be from two different institutions.
False. You can set up an automated transfer between two accounts at the same institution.