Question 1

Which of the following is not a depository institution?

Accepted Answer

A)  First National Bank of Chicago 
B)  Butterfield and Edwards Brokerage Company 
C)  American 1 Federal Credit Union 
D)  New England Savings Bank 
A)  First National Bank of Chicago 
B)  Butterfield and Edwards Brokerage Company 
C)  American 1 Federal Credit Union 
D)  New England Savings Bank

Question 2

A debit card differs from a credit card in that it does not provide credit; instead, it deducts the purchase from your checking account immediately.

Accepted Answer

A) True 
 B)False

Question 3

A ________ is a check that is written on behalf of an individual and will be charged against a large well-known financial institution or credit card sponsor's account.

Accepted Answer

A)  cashier's check 
B)  money order 
C)  traveler's check 
D)  personal check 
A)  cashier's check 
B)  money order 
C)  traveler's check 
D)  personal check

Question 4

An increase in borrowing by the U.S. government will result in all of the following, except

Accepted Answer

A)  upward pressure on interest rates. 
B)  reduction in government regulation. 
C)  an increase in the demand for funds. 
D)  an increase in the issuance of Treasury securities. 
A)  upward pressure on interest rates. 
B)  reduction in government regulation. 
C)  an increase in the demand for funds. 
D)  an increase in the issuance of Treasury securities.

Question 5

Which of the following is not true regarding certificates of deposit (CDs)?

Accepted Answer

A)  The longer the term, the higher the interest rate paid. 
B)  All banks offer the same rates on CDs. 
C)  Early withdrawals of money are subject to a penalty. 
D)  The investment of large amounts will pay higher interest than lower amounts. 
A)  The longer the term, the higher the interest rate paid. 
B)  All banks offer the same rates on CDs. 
C)  Early withdrawals of money are subject to a penalty. 
D)  The investment of large amounts will pay higher interest than lower amounts.

Question 6

The monetary policy of the Federal Reserve System (the Fed) has very little to do with the changes in interest rates a consumer will experience.

Accepted Answer

A) True 
 B)False

Question 7

A risk-free rate is a return on an investment that is guaranteed for a specified period.

Accepted Answer

A) True 
 B)False

Question 8

Cashier's checks, money orders, and traveler's checks are secured check alternatives to a personal check and therefore are more risk-free for the payee.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is not a depository institution?

Accepted Answer

A)  Commercial bank 
B)  Securities firm 
C)  Savings institution 
D)  Credit union 
A)  Commercial bank 
B)  Securities firm 
C)  Savings institution 
D)  Credit union

Question 10

Information such as ________ can be easily found on a variety of Web sites.

Accepted Answer

A)  loan rates 
B)  stock quotes and company information 
C)  yields of Treasury securities 
D)  All of the above 
A)  loan rates 
B)  stock quotes and company information 
C)  yields of Treasury securities 
D)  All of the above

Question 11

Convenience, deposit rates and insurance, and fees are primary considerations in choosing a financial institution for your needs.

Accepted Answer

A) True 
 B)False

Question 12

The one-year loan rate for individuals is usually about the same as the one-year CD rate.

Accepted Answer

A) True 
 B)False

Question 13

The relationship between risk and return

Accepted Answer

A)  is positive. 
B)  is negative. 
C)  is inverse. 
D)  has no correlation. 
A)  is positive. 
B)  is negative. 
C)  is inverse. 
D)  has no correlation.

Question 14

Which of the following is not a service that a depository institution might offer?

Accepted Answer

A)  Checking services 
B)  Credit counseling 
C)  Online services 
D)  The use of a debit card 
A)  Checking services 
B)  Credit counseling 
C)  Online services 
D)  The use of a debit card

Question 15

Because they have lower expenses, Web-based financial institutions tend to pay higher interest rates on deposits than institutions with physical branches.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following financial institutions would be used the most by business customers wishing to borrow money?

Accepted Answer

A)  Commercial banks 
B)  Savings institutions 
C)  Credit unions 
D)  All are used equally by business customers. 
A)  Commercial banks 
B)  Savings institutions 
C)  Credit unions 
D)  All are used equally by business customers.

Question 17

Jack has $1,000 that he wishes to invest for the next two years. One-year CDs are currently paying 8% while two-year CDs are paying 12% per annum. Economists are predicting that interest rates will rise by the end of the year. What is the minimum interest rates would have to increase to in order for the one-year CD to be better than the two-year CD?

Accepted Answer

A)  16% 
B)  14% 
C)  12% 
D)  10 % 
A)  16% 
B)  14% 
C)  12% 
D)  10 %

Question 18

Use the following two columns of items to answer the matching questions below:
-credit card
A)automatically deducts an amount from a checking account
B)extends the payment time through credit

Accepted Answer

The answer of Use the following two columns of items...

Question 19

Credit unions are nonprofit depository institutions that serve members who have a common affiliation (such as the same employer or same community).

Accepted Answer

A) True 
 B)False

Question 20

The risk-free rate on borrowed funds is determined by the ________ and ________ of funds.

Accepted Answer

The answer of The risk-free rate on borrowed funds is...

Which of the following is not a depository institution?

A debit card differs from a credit card in that it does not provide credit; instead, it deducts the purchase from your checking account immediately.

A ________ is a check that is written on behalf of an individual and will be charged against a large well-known financial institution or credit card sponsor's account.

An increase in borrowing by the U.S. government will result in all of the following, except

Which of the following is not true regarding certificates of deposit (CDs)?

The monetary policy of the Federal Reserve System (the Fed) has very little to do with the changes in interest rates a consumer will experience.

A risk-free rate is a return on an investment that is guaranteed for a specified period.

Cashier's checks, money orders, and traveler's checks are secured check alternatives to a personal check and therefore are more risk-free for the payee.

Which of the following is not a depository institution?

Information such as ________ can be easily found on a variety of Web sites.

Convenience, deposit rates and insurance, and fees are primary considerations in choosing a financial institution for your needs.

The one-year loan rate for individuals is usually about the same as the one-year CD rate.

The relationship between risk and return

Which of the following is not a service that a depository institution might offer?

Because they have lower expenses, Web-based financial institutions tend to pay higher interest rates on deposits than institutions with physical branches.

Which of the following financial institutions would be used the most by business customers wishing to borrow money?

Use the following two columns of items to answer the matching questions below: -credit card A)automatically deducts an amount from a checking account B)extends the payment time through credit

Credit unions are nonprofit depository institutions that serve members who have a common affiliation (such as the same employer or same community).

The risk-free rate on borrowed funds is determined by the and of funds.

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Managing Your Money

Assessing and Securing Your Credit

Managing Your Credit

Personal Loans

Purchasing and Financing a Home

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

Filters

Exam 5: Banking and Interest Rates

Which of the following is not a depository institution?

A debit card differs from a credit card in that it does not provide credit; instead, it deducts the purchase from your checking account immediately.

A ________ is a check that is written on behalf of an individual and will be charged against a large well-known financial institution or credit card sponsor's account.

An increase in borrowing by the U.S. government will result in all of the following, except

Which of the following is not true regarding certificates of deposit (CDs)?

The monetary policy of the Federal Reserve System (the Fed) has very little to do with the changes in interest rates a consumer will experience.

A risk-free rate is a return on an investment that is guaranteed for a specified period.

Cashier's checks, money orders, and traveler's checks are secured check alternatives to a personal check and therefore are more risk-free for the payee.

Which of the following is not a depository institution?

Information such as ________ can be easily found on a variety of Web sites.

Convenience, deposit rates and insurance, and fees are primary considerations in choosing a financial institution for your needs.

The one-year loan rate for individuals is usually about the same as the one-year CD rate.

The relationship between risk and return

Which of the following is not a service that a depository institution might offer?

Because they have lower expenses, Web-based financial institutions tend to pay higher interest rates on deposits than institutions with physical branches.

Which of the following financial institutions would be used the most by business customers wishing to borrow money?

Use the following two columns of items to answer the matching questions below: -credit card A)automatically deducts an amount from a checking account B)extends the payment time through credit

Credit unions are nonprofit depository institutions that serve members who have a common affiliation (such as the same employer or same community).

The risk-free rate on borrowed funds is determined by the ________ and ________ of funds.

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Managing Your Money

Assessing and Securing Your Credit

Managing Your Credit

Personal Loans

Purchasing and Financing a Home

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

Filters

The risk-free rate on borrowed funds is determined by the and of funds.