Question 1

If interest on a savings account is compounded semiannually,the effective rate of interest will be

Accepted Answer

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. 
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.

Question 2

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.
-Interest rates will be lower on your [savings | checking] accounts.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 3

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.
-EE savings bonds are also called [War Bonds | Patriot Bonds].

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 4

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.
-Today the differences between a commercial bank and an S&L are [minor | major].

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

A lump sum deposit of $8,000 left in the bank for 12 years at 9% compounded annually will result in an ending balance of (select the closest answer)

Accepted Answer

A)  $11,600. 
B)  $16,640. 
C)  $22,480. 
D)  $52,938. 
E)  $96,000. 
A)  $11,600. 
B)  $16,640. 
C)  $22,480. 
D)  $52,938. 
E)  $96,000.

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

The nominal rate of interest will be lower than the effective rate of interest when an account compounds monthly.

Accepted Answer

A) True 
 B)False

Question 9

A stop payment results in an absolute promise by the bank not to pay the indicated check.

Accepted Answer

A) True 
 B)False

Question 10

The Truth in Savings Act was designed to help consumers compare terms and costs of banking products.

Accepted Answer

A) True 
 B)False

Question 11

Joint checking accounts imply the right of survivorship if one party should die.

Accepted Answer

A) True 
 B)False

Question 12

The stated interest rate on your account is 7.12%,interest paid semi-annually.Your effective rate of interest (APY)will be

Accepted Answer

A)  lower than 7.12% 
B)  equal to 7.12%. 
C)  greater than 7.12% 
D)  depends if the compounding takes place within the same year. 
E)  none of these. 
A)  lower than 7.12% 
B)  equal to 7.12%. 
C)  greater than 7.12% 
D)  depends if the compounding takes place within the same year. 
E)  none of these.

Question 13

Gordon started saving $25 a month at age 20 in an account earning 4% compounded monthly.At age 40 he would have ____ in this account.(Use time value tables or financial calculator)

Accepted Answer

A)  $6,000 
B)  $7,170 
C)  $9,169 
D)  $9,255 
E)  $9,890 
A)  $6,000 
B)  $7,170 
C)  $9,169 
D)  $9,255 
E)  $9,890

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Terry started saving $50 a month at age 25 in an account earning 6% compounded monthly.At age 40 she would have ____ in this account.(Use time value tables or financial calculator)

Accepted Answer

A)  $ 5,252 
B)  $ 9,000 
C)  $ 9,540 
D)  $13,962 
E)  $14,541 
A)  $ 5,252 
B)  $ 9,000 
C)  $ 9,540 
D)  $13,962 
E)  $14,541

Question 16

Lower interest rates on certificates of deposit are associated with

Accepted Answer

A)  higher account balances. 
B)  shorter maturities. 
C)  longer maturities. 
D)  a and b 
E)  a and c 
A)  higher account balances. 
B)  shorter maturities. 
C)  longer maturities. 
D)  a and b 
E)  a and c

Question 17

The most important rule for establishing a savings plan is to

Accepted Answer

A)  set realistic goals. 
B)  take advantage of compounding. 
C)  pay yourself first. 
D)  keep it simple. 
E)  try some gimmicks. 
A)  set realistic goals. 
B)  take advantage of compounding. 
C)  pay yourself first. 
D)  keep it simple. 
E)  try some gimmicks.

Question 18

The purpose of the Truth in Savings Act is to

Accepted Answer

A)  require banks to use a standard formula when stating interest rates. 
B)  require that all fees be fully disclosed. 
C)  require banks to offer a free checking account to low-income consumers. 
D)  a and b 
E)  a,b,and c 
A)  require banks to use a standard formula when stating interest rates. 
B)  require that all fees be fully disclosed. 
C)  require banks to offer a free checking account to low-income consumers. 
D)  a and b 
E)  a,b,and c

Question 19

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 [may | must] state interest rates they pay as Annual Percentage Yields.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 20

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

Accepted Answer

A) True 
 B)False

If interest on a savings account is compounded semiannually,the effective rate of interest will be

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. -Interest rates will be lower on your [savings | checking] accounts.

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. -EE savings bonds are also called [War Bonds | Patriot Bonds].

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. -Today the differences between a commercial bank and an S&L are [minor | major].

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

A lump sum deposit of $8,000 left in the bank for 12 years at 9% compounded annually will result in an ending balance of (select the closest answer)

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

The nominal rate of interest will be lower than the effective rate of interest when an account compounds monthly.

A stop payment results in an absolute promise by the bank not to pay the indicated check.

The Truth in Savings Act was designed to help consumers compare terms and costs of banking products.

Joint checking accounts imply the right of survivorship if one party should die.

The stated interest rate on your account is 7.12%,interest paid semi-annually.Your effective rate of interest (APY)will be

Gordon started saving $25 a month at age 20 in an account earning 4% compounded monthly.At age 40 he would have ____ in this account.(Use time value tables or financial calculator)

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

Terry started saving $50 a month at age 25 in an account earning 6% compounded monthly.At age 40 she would have ____ in this account.(Use time value tables or financial calculator)

Lower interest rates on certificates of deposit are associated with

The most important rule for establishing a savings plan is to

The purpose of the Truth in Savings Act is to

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 [may | must] state interest rates they pay as Annual Percentage Yields.

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

Understanding the Financial Planning Process

Your Financial Statements and Plans

Preparing Your Taxes

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

Filters

Exam 4: Managing Your Cash and Savings

If interest on a savings account is compounded semiannually,the effective rate of interest will be

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. -Interest rates will be lower on your [savings | checking] accounts.

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. -EE savings bonds are also called [War Bonds | Patriot Bonds].

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. -Today the differences between a commercial bank and an S&L are [minor | major].

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

A lump sum deposit of $8,000 left in the bank for 12 years at 9% compounded annually will result in an ending balance of (select the closest answer)

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

The nominal rate of interest will be lower than the effective rate of interest when an account compounds monthly.

A stop payment results in an absolute promise by the bank not to pay the indicated check.

The Truth in Savings Act was designed to help consumers compare terms and costs of banking products.

Joint checking accounts imply the right of survivorship if one party should die.

The stated interest rate on your account is 7.12%,interest paid semi-annually.Your effective rate of interest (APY)will be

Gordon started saving $25 a month at age 20 in an account earning 4% compounded monthly.At age 40 he would have ____ in this account.(Use time value tables or financial calculator)

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

Terry started saving $50 a month at age 25 in an account earning 6% compounded monthly.At age 40 she would have ____ in this account.(Use time value tables or financial calculator)

Lower interest rates on certificates of deposit are associated with

The most important rule for establishing a savings plan is to

The purpose of the Truth in Savings Act is to

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 [may | must] state interest rates they pay as Annual Percentage Yields.

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

Understanding the Financial Planning Process

Your Financial Statements and Plans

Preparing Your Taxes

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

Filters