Exam 4: Managing Your Cash and Savings

Higher interest rates on certificates of deposit are associated with

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -You have a savings plan into which you put $3,000 per year.How much will you accumulate in the account in 25 years if the interest rate is 10%? (Show all work. )

NOW accounts are appropriate for people who need to keep substantial amounts of money in a checking account.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Errors discovered during the reconciliation process are most likely to have been made by the [depositor | bank].

The minimum denomination for Treasury bills is now $1,000.

The prime candidate for using an Internet bank is a person who rarely visits their bank.

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

Credit unions typically pay higher rates of return on savings than banks and savings and loan associations.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -During the past few years,the number of financial institution failures per year has [risen | dropped].

Saving accounts are sometimes referred to as demand deposits.

You have $450 in your checking account when your ATM card and PIN are stolen.You could lose up to ____ if you report the lost ATM card within 8 business days.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Natalie is faced with two savings choices: Making a single deposit of $5,000 or making five annual deposits of $1,000.The interest rate on both is 4%,compounded monthly.The [lump sum deposit | annual deposits] plan will result in a higher balance at the end of five years.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -It costs financial institutions more for their customers to perform [ATM transactions | Internet transactions.]

Share draft accounts are commonly offered by

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Banks must notify customers [30 | 60] days before lowering rates on deposit accounts or certificates of deposit.

Mandy has $2,000 she would like to start a savings program.She will add to it regularly by investing $50 per month in a liquid account.Which of the following types of accounts would be most appropriate in this situation?

Which of the following would be an appropriate savings vehicle if you expected interest rates to fall over the next few months?

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -You make a promise to keep funds on deposit for a stated period of time when you open a [MMDA | CD].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -The most common type of joint checking account would require the [signature of either party | signatures of both parties] on all checks.

Joe Gustafson is a very busy person who likes to handle all his financial services needs with one account if possible.Which of the following types of accounts would best serve this need?