question

One could expect to earn a higher rate of interest on a certificate of deposit than on a checking account.

answer

True

question

Saving accounts are sometimes referred to as demand deposits.

answer

False, time deposit.

question

Credit unions typically pay lower rates of return on savings than banks and commercial banks.

answer

False, pray higher interest rates, operation is more efficient.

question

There is a penalty for early withdrawal of funds from CDs purchased from brokerage firms.

answer

True

question

Investment accounts are insured up to $250,000 by the FDIC if purchased at an insured bank.

answer

False, only savings and checking

question

There are some limitations on check writing for both MMDAs and MMMFs.

answer

True

question

Savings and loan associations channel the savings of depositors primarily into automotive loans.

answer

False, mortgage loans

question

Credit Union members are expected to have some common bond.

answer

True, ex. Residency

question

Currently, the FDIC insures depositors funds up to $500,000 at member banks.

answer

False, funds only up to $250,000

question

Financial institutions expect demand deposits to remain on deposit for a longer period of time than time deposits.

answer

False, time deposits remain for a long time

question

If Suzie has $2,000 in checking, $50,000 in a money market account, and $75,000 in certificates of deposit (all individual accounts) at her local bank, her accounts would be completely insured through the FDIC.

answer

True

question

Debit and ATM card transactions are linked to your savings account.

answer

False, linked to checking account

question

Although there are no legal minimum balances for a checking account, many institutions impose their own requirement, often around $100, or else they will change a maintenance fee.

answer

False, around $500- $1,000, most $1,000

question

Internet-only banks typically pay lower interest rates on savings than traditional banks.

answer

False, internet more efficient, have a lot less overhead

question

Treasury bills are sold at a discount of their maturity value.

answer

True

question

If your bank states that it compounds monthly, the effective interest rate will be greater than the nominal interest rate.

answer

True

question

Compound interest means that a savings account earns interest on the interest previously earned.

answer

True

question

A certified check is a personal check that the bank guarantees the funds are available.

answer

True

question

What 3 factors typically influence the choice of what to maintain a checking account?

answer

Cost, convenience, and service offered

question

Janice Sanders plans on saving $12,000 for 3 years until she returns to college for her masters degree in personal finance planning. She would like to receive a fixed rate of return over that period. What type of savings vehicle would you recommend?

answer

A certificate of deposit

question

An savings and loan or credit Union that is a mutual association is owned by who?

answer

The depositor

question

Compared to other depository financial institutions, credit unions A. Are run to benefit their members B. Pay higher interest on savings C. Charge lower rates on loans D. All of these are true E. None of these are true

answer

D

question

The minimum denomination of treasury bills you can buy is ?

answer

$1,000

question

A(n) ? Is not an interest-bearing account.

answer

Checking account

question

Which of the following would be best suited to using an internet back? A. Nancy Johnson,a young business women who uses bank financing regularly for her business B. Milan Sosa, an older gentlemen who enjoys visiting his local banker C. Molly Peterson, a women who uses multiple bank services including a safe-deposit box D. Fred longoria, a man who used checking and savings but never goes to his bank E. All of these would be good candidates because the cost of internet banking is lower than other types of banks.

answer

D

question

Christina works at a company that offers direct deposit of her paycheck. This service is called A. An ATM service B. A FDIC service C. A money market service D. An electronic funds transfer E. An overdraft service

answer

D

question

The most important time for establishing a savings plan is to A. Set realistic goals B. Take advantage of compounding C. Establish a regular pattern of saving D. Keep it simple E. Try some gimmicks

answer

C

question

A lump sum deposit of $8,000 left in the bank for 1 year at 9%compounded annually will result in an ending balance of (select closets answer) A. $8,270 B. $8,520 C. $8,720

answer

C

question

If interest on a savings account is compounded semiannually, the effective rate of interest will be A. Higher than the nominal rate B. Lower than the nominal rate C. The same as the simple rate D. Equal to the nominal rate E. Lower than the simple rate

answer

A

question

Higher interest rates on certificates of deposit are associated with A. Higher account balances B. Shorter maturities C. Longer maturities D. A and b E. A and c

answer

E

question

Whenever you write a check or Maher a deposit, an entry should be made on your A. Deposit slip B. Checkbook ledger C. Check D. Atm account E. Personal check

answer

B

question

The interest on your series EE savings bonds A. Will be taxable every year as it accrues B. Will be subject to both federal and state income taxes upon redemption C. Is tax free of both local and state income taxes upon redemption

answer

C

question

If you write a check for an amount greater than your account balance, the result will be an ?

answer

Overdraft

question

When reporting errors or unauthorized transactions, it is best to notify your bank A. By telephone B. By letter, keeping a copy for your files C. By telephone and follow up with a letter and keep a copy for your files D. None of the above

answer

C

question

How long do you have to report an error or unauthorized transaction?

answer

60 days

question

A check you issued last week had been stolen. You can prevent it from being withdrawn from your account by an unauthorized person by A. Writing a new check B. Depositing the correct amount of money C. Requesting a stop payment D. Tearing up the check E. Properly endorsing the check

answer

C

question

A check you wrote to buy shoes last week has not yet been processed by the back. It is said to be A. Outstanding B. in transit C. Endorsed D. Certified E. Subtracted

answer

A

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