Exam 4: Managing Your Cash and Savings

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.

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

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.]

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 FDIC.

Alice lost her ATM card at the lake and reported it missing the next day.She found that $800 had been withdrawn from her savings account.The most Alice will be legally liable for is

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.

Gordon and Susan have a regular savings plan and have accumulated $8,000.How much will this be worth in 10 years if they can earn 2% on the money.They are not planning to add to this savings account.(Show all work.)

When an S & L is a mutual association,it means that it is owned by the

A check you wrote to buy shoes last week has not yet been processed by the bank.It is said to be

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. -Money market deposit accounts [are | are not] insured by an agency of the federal government.

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. -[Anyone | Only those with an account at the bank] could get a check certified.

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. -A [checking | savings] account is called a demand deposit account.

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

Money Market Deposit Accounts

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. -A bank customer would typically expect to receive higher interest rates on her [certificate of deposit | money market deposit account].

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

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. -Joe and Mary have a tenants in common savings account.When Joe dies,his portion of the account [will | will not] automatically go to Mary.

Funds in a ____ must remain on deposit for a stated time period in order to avoid an interest penalty.

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 least expensive method for banks to interact with their customers is [in person | ATM | online].

Alice lost her ATM card at the lake and forgot it was missing until her monthly statement came 26 days later.She found that $800 had been withdrawn from her savings account.The most Alice will be legally liable for assuming she notifies the bank at this point is