Question 1

One can hold a credit card issued by a stock brokerage firm.

Accepted Answer

A) True 
 B)False

Question 2

A customer withdraws funds by writing checks from his or her negotiable order of withdrawal (NOW) account and:

Accepted Answer

A)  certificate of deposit (C
D) . 
B)  savings account. 
C)  term insurance deposit. 
D)  time deposit. 
E)  share draft account. 
A)  certificate of deposit (C
D) . 
B)  savings account. 
C)  term insurance deposit. 
D)  time deposit. 
E)  share draft account.

Question 3

Whenever you write a check or make a deposit, an entry should be made:

Accepted Answer

A)  on a deposit slip. 
B)  in your checkbook ledger. 
C)  in your overdraft booklet. 
D)  on your balance sheet. 
E)  on a personal check. 
A)  on a deposit slip. 
B)  in your checkbook ledger. 
C)  in your overdraft booklet. 
D)  on your balance sheet. 
E)  on a personal check.

Question 4

Money market deposit accounts (MMDAs):

Accepted Answer

A)  allow free unlimited check-writing privileges every month. 
B)  are federally insured. 
C)  have floating maturity dates. 
D)  are offered only by credit unions. 
E)  pay the lowest interest rates of any bank accounts with check-writing privileges. 
A)  allow free unlimited check-writing privileges every month. 
B)  are federally insured. 
C)  have floating maturity dates. 
D)  are offered only by credit unions. 
E)  pay the lowest interest rates of any bank accounts with check-writing privileges.

Question 5

Cash and near-cash resources are known as:

Accepted Answer

A)  liquid assets. 
B)  long-lived assets. 
C)  noncurrent assets. 
D)  fixed assets. 
E)  noncash assets. 
A)  liquid assets. 
B)  long-lived assets. 
C)  noncurrent assets. 
D)  fixed assets. 
E)  noncash assets.

Question 6

Which of the following statements about U.S. Treasury bills (T-bills) is true?

Accepted Answer

A)  T-bills can be sold at any time with no interest penalty. 
B)  T-bills are issued with 6-month and 12-month maturities. 
C)  T-bills earn interest at a fixed rate for 30 years. 
D)  T-bills pay interest by direct payment. 
E)  T-bills are sold at face value. 
A)  T-bills can be sold at any time with no interest penalty. 
B)  T-bills are issued with 6-month and 12-month maturities. 
C)  T-bills earn interest at a fixed rate for 30 years. 
D)  T-bills pay interest by direct payment. 
E)  T-bills are sold at face value.

Question 7

In account reconciliation, one of the steps in calculating the adjusted bank balance is:

Accepted Answer

A)  deducting total withdrawals still outstanding from the bank balance. 
B)  deducting total deposits still outstanding from the bank balance. 
C)  adding the total credit card outstanding balance to the bank balance. 
D)  adding bank service charges to the bank balance. 
E)  subtracting interest paid on the account's balance for the period. 
A)  deducting total withdrawals still outstanding from the bank balance. 
B)  deducting total deposits still outstanding from the bank balance. 
C)  adding the total credit card outstanding balance to the bank balance. 
D)  adding bank service charges to the bank balance. 
E)  subtracting interest paid on the account's balance for the period.

Question 8

At maturity, how much will a deposit of $6,000 in a certificate of deposit (CD) for 10 years at 3% be worth? (Round the answer to the nearest dollar.)

Accepted Answer

A)  $7,340 
B)  $7,800 
C)  $8,063 
D)  $8,678 
E)  $9,005 
A)  $7,340 
B)  $7,800 
C)  $8,063 
D)  $8,678 
E)  $9,005

Question 9

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.

Accepted Answer

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

Question 10

_____  is the routine, day-to-day administration of liquid assets by an individual or family.

Accepted Answer

A)  Depository management 
B)  Resource management 
C)  Cash management 
D)  Bond management 
E)  Treasury management 
A)  Depository management 
B)  Resource management 
C)  Cash management 
D)  Bond management 
E)  Treasury management

Question 11

You can have an account with a mutual fund that allows you to write a limited number of checks.

Accepted Answer

A) True 
 B)False

Question 12

Laura has a $100,000 balance in her checking account at Best Bank, and she has purchased a certificate of deposit (CD) worth $50,000 issued by Best Bank. Laura is also thinking of investing $200,000 either in Best Bank or in Trust Bank. Which of the following is a suitable strategy for Laura if she wants her deposits to be completely insured?

Accepted Answer

A)  Laura should invest $200,000 in a money market deposit account (MMD
A)  of Best Bank. 
B)  Laura should invest $100,000 in a money market deposit account (MMD
A)  of Best Bank and invest $100,000 in an asset management account of Best Bank. 
C)  Laura should invest $100,000 in a money market deposit account (MMD
A)  of Best Bank and invest $100,000 in an asset management account of Trust Bank. 
D)  Laura should invest $150,000 in a money market deposit account (MMD
A)  of Best Bank and invest $100,000 in an asset management account of Trust Bank. 
E)  Laura should invest $150,000 in a money market deposit account (MMD
A)  of Best Bank and invest $200,000 in a money market deposit account (MMD
A)  of Trust Bank. 
A)  Laura should invest $200,000 in a money market deposit account (MMD
A)  of Best Bank. 
B)  Laura should invest $100,000 in a money market deposit account (MMD
A)  of Best Bank and invest $100,000 in an asset management account of Best Bank. 
C)  Laura should invest $100,000 in a money market deposit account (MMD
A)  of Best Bank and invest $100,000 in an asset management account of Trust Bank. 
D)  Laura should invest $150,000 in a money market deposit account (MMD
A)  of Best Bank and invest $100,000 in an asset management account of Trust Bank. 
E)  Laura should invest $150,000 in a money market deposit account (MMD
A)  of Best Bank and invest $200,000 in a money market deposit account (MMD
A)  of Trust Bank.

Question 13

_____  offer banking services but do not accept deposits like traditional banks.

Accepted Answer

A)  Nondepository institutions 
B)  Stock brokerage firms 
C)  Nonprofit organizations 
D)  Credit bureaus 
E)  Mutual funds 
A)  Nondepository institutions 
B)  Stock brokerage firms 
C)  Nonprofit organizations 
D)  Credit bureaus 
E)  Mutual funds

Question 14

The more frequently a bank compounds interest, _____ for a given nominal rate.

Accepted Answer

A)  the higher the stated interest rate 
B)  the lower the inflation rate 
C)  the higher the effective rate 
D)  the lower the yield rate 
E)  the higher the normal rate 
A)  the higher the stated interest rate 
B)  the lower the inflation rate 
C)  the higher the effective rate 
D)  the lower the yield rate 
E)  the higher the normal rate

Question 15

The interest earned on an individual's _____ is free of state and local income taxes.

Accepted Answer

A)  Series EE bonds 
B)  certificates of deposit (CDs) 
C)  term deposits 
D)  money market deposit accounts (MMDAs) 
E)  time deposits 
A)  Series EE bonds 
B)  certificates of deposit (CDs) 
C)  term deposits 
D)  money market deposit accounts (MMDAs) 
E)  time deposits

Question 16

Factors that typically influence the choice of where to maintain a checking account are:

Accepted Answer

A)  inflation, tax rates, and cost. 
B)  convenience, inflation, and services. 
C)  cost, inflation, and tax rates. 
D)  convenience, services, and cost. 
E)  services, insurance, and cost. 
A)  inflation, tax rates, and cost. 
B)  convenience, inflation, and services. 
C)  cost, inflation, and tax rates. 
D)  convenience, services, and cost. 
E)  services, insurance, and cost.

Question 17

You are going on an overseas trip, and you want to carry checks. You should purchase:

Accepted Answer

A)  cashier's checks. 
B)  certified checks. 
C)  conditional checks. 
D)  traveler's checks. 
E)  guaranteed checks. 
A)  cashier's checks. 
B)  certified checks. 
C)  conditional checks. 
D)  traveler's checks. 
E)  guaranteed checks.

Question 18

Cash is the only kind of liquid asset.

Accepted Answer

A) True 
 B)False

Question 19

Your checkbook balance shows $706.50. The bank statement shows $772.77. The bank paid $2.50 interest. Checks 1501 ($85.00), 1507 ($50.16), and 1511 ($20.50) are not shown on the statement. A service charge of $5.00 was levied by the bank. You made an $85.00 deposit yesterday that is not on the statement. What is the reconciled balance? (Show all work.)

Accepted Answer

The balance is off by $1.89.

Question 20

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. 
Credit unions are generally [ small | large ] institutions when compared with commercial banks and savings and loan associations (S&Ls).

Accepted Answer

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

One can hold a credit card issued by a stock brokerage firm.

A customer withdraws funds by writing checks from his or her negotiable order of withdrawal (NOW) account and:

Whenever you write a check or make a deposit, an entry should be made:

Money market deposit accounts (MMDAs):

Cash and near-cash resources are known as:

Which of the following statements about U.S. Treasury bills (T-bills) is true?

In account reconciliation, one of the steps in calculating the adjusted bank balance is:

At maturity, how much will a deposit of $6,000 in a certificate of deposit (CD) for 10 years at 3% be worth? (Round the answer to the nearest dollar.)

_____ is the routine, day-to-day administration of liquid assets by an individual or family.

You can have an account with a mutual fund that allows you to write a limited number of checks.

_____ offer banking services but do not accept deposits like traditional banks.

The more frequently a bank compounds interest, _____ for a given nominal rate.

The interest earned on an individual's _____ is free of state and local income taxes.

Factors that typically influence the choice of where to maintain a checking account are:

You are going on an overseas trip, and you want to carry checks. You should purchase:

Cash is the only kind of liquid asset.

Understanding the Financial Planning Process

Developing 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 and Real Estate

Planning for Retirement

Preserving Your Estate

Filters

Exam 4: Managing Your Cash and Savings

One can hold a credit card issued by a stock brokerage firm.

A customer withdraws funds by writing checks from his or her negotiable order of withdrawal (NOW) account and:

Whenever you write a check or make a deposit, an entry should be made:

Money market deposit accounts (MMDAs):

Cash and near-cash resources are known as:

Which of the following statements about U.S. Treasury bills (T-bills) is true?

In account reconciliation, one of the steps in calculating the adjusted bank balance is:

At maturity, how much will a deposit of $6,000 in a certificate of deposit (CD) for 10 years at 3% be worth? (Round the answer to the nearest dollar.)

_____ is the routine, day-to-day administration of liquid assets by an individual or family.

You can have an account with a mutual fund that allows you to write a limited number of checks.

_____ offer banking services but do not accept deposits like traditional banks.

The more frequently a bank compounds interest, _____ for a given nominal rate.

The interest earned on an individual's _____ is free of state and local income taxes.

Factors that typically influence the choice of where to maintain a checking account are:

You are going on an overseas trip, and you want to carry checks. You should purchase:

Cash is the only kind of liquid asset.

Understanding the Financial Planning Process

Developing 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 and Real Estate

Planning for Retirement

Preserving Your Estate

Filters