Future Business Leaders of America (FBLA) Personal Finance Practice Test

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Explore the Future Business Leaders of America Personal Finance Test. Use flashcards and multiple-choice questions with hints and explanations to prepare. Get ready for the exam today!

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A Money Market Account is a type of savings account that typically?

Has fixed interest rates
Requires a high minimum balance
Has an interest rate that varies monthly
Offers no ATM access

The correct answer is: Has an interest rate that varies monthly

A Money Market Account (MMA) is recognized for its variable interest rates, which means that the interest rate can fluctuate based on changes in market conditions or the financial institution's policies. This variability allows the account's interest rate to potentially increase during periods of rising rates or to decrease when market rates drop. This characteristic makes MMAs distinct from regular savings accounts, which often have more stable, fixed rates. Variability in the interest rate can be beneficial for account holders, especially if rates are trending upward. Understanding this feature of Money Market Accounts is crucial for individuals and businesses looking to maximize their savings potential while maintaining liquidity. This is why the option that describes the interest rate's fluctuations as varying monthly aligns with the inherent nature of Money Market Accounts.