Exam 4: Managing Your Cash and Savings

The _____ department of a bank provides investment and estate planning advice.

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. Series EE savings bonds may be redeemed [ any time after the first 12 months | only at the maturity date ].

If a lump-sum deposit of $8,000 is left in a bank for 12 years at 9%, compounded annually, what will the ending balance be? (Round the answer to the nearest dollar.)

Which of the following is an electronic funds transfer system (EFTS) service?

When doing an account reconciliation, interest earned on your account should be:

Maggie wants to open a checking account that will be the least expensive, given her normal financial transactions. She typically writes 15 checks a month and uses an automated teller machine (ATM) 35 times a month. Her monthly minimum checking balance falls to about $350 on an average. Which of the following accounts would be least expensive for Maggie? (Show all work.) Account A: No monthly fee is charged if a minimum balance of at least $300 is maintained. A $5.00 fee is charged in any month the minimum balance falls below $300. An ATM fee of $0.10 per transaction is charged on all transactions. Account B: No monthly fee is charged if a minimum balance of at least $500 is maintained. A $3.00 fee plus $0.10 per check is charged in any month the minimum balance falls below $500. There is no ATM fee on transactions.

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. Savings and loan associations (S&Ls) are more likely to pay [ lower | higher ] interest rates on savings than do commercial banks.

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.

Low interest rates that have persisted since the financial crisis of 2007-2008 have been beneficial to:

Brent had $450 in his checking account when his electronic funds transfer system (EFTS) card and personal identification number (PIN) were stolen almost a week ago. Because he has been ill, he didn't report the theft until today, 5 days after the theft occurred. The delay in notifying the bank means that he could lose:

People who do not have checking accounts often use:

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. If you have a checking account at a savings and loan association (S&L), you are covered up to $250,000 by the [ Savings Association Insurance Fund (SAIF) | Federal Deposit Insurance Corporation (FDIC) ].

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 [ would | would not ] expect to receive a cash flow of interest from your Series EE bonds.

A(n) _____ is called a demand deposit.

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. Your bank does not levy a service charge on your checking account as long as a $1,000 minimum balance is maintained. Your bank [ can | cannot ] advertise this as "free checking."

Kate tends to issue checks quite often without having a sufficient balance in her account. She should look for a checking account 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. [ Anyone | Only those with an account at the bank ] can purchase cashiers' checks.

When a savings bank is a mutual association, it is owned by the:

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. 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.

Which of the following savings vehicles is free of state and local income taxes?