You Have $5000 Saved in Case You May Need to Replace

question 63

Multiple Choice

You have $5000 saved in case you may need to replace the furnace in your house which has been acting up.Which of the following would be the best place to put the $5000?

• A)A one-year fixed-rate GIC earning four percent
• B)A stock mutual fund which earned nine percent in the past year
• C)A term deposit earning three percent held in a TFSA
• D)A high interest savings account earning three percent

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Definitions:

Loanable Funds

refers to the pool of funds available for borrowing, consisting of savings made available to borrowers in the financial markets.

Quantities Demanded

The total amount of a good or service that consumers wish to purchase at any given price level.

Time-Value of Money

A finance principle that suggests money available now is worth more than the same amount in the future due to its potential earning capacity.

Monetary Compensation

Payment made in the form of money as opposed to in-kind benefits or services, often referring to wages, salaries, or other forms of financial reward.