Exam 5: Cash or Liquid Asset Management

When you are considering different investment options and want to maximize your returns, be sure to compare the investments'

What is another name for an interest-bearing checking account?

It is always a wise financial decision to wait until you are earning a substantial amount of money before you start establishing a disciplined financial plan for your future.

The National Credit Union Association is a federal agency that insures deposits at credit unions.

A savings alternative that pays a fixed rate of interest while keeping your funds on deposit for a contracted period of time that can range from 30 days to several years is called a

How do you compare cash management alternatives to determine which is best for you?

Which of the following financial institutions is a not-for-profit organization that is open only to members of that institution and tends to offer more favorable interest rates to borrowers and savers?

A debit card is something of a cross between a credit card and a checking account.

Many banks offer free checking accounts. What may be the opportunity costs associated with free checking?

Tony just received his checking account statement from his bank. He has a NOW account with free checking that pays 0.75% APR on the balance and requires a $500 minimum balance. His statement shows that he currently has a balance of $3,950. In looking at his statement he notices that his car payment check for $400 is still outstanding, and that his recently received payroll deposit of $3,600 had not posted at the time the statement was created. His normal living expenses average $1,500 per month including his car payment. Other than his car loan, he rarely writes any checks as he prefers to use his debit card and ATM card for day-to-day living expenses. He pays his credit card balance in full every month. Other than his checking account he does not own any investments. He has always dreamed of owning a house, and would like to buy one within the next five years. He has access to a 401K pension plan at work where his employer will match contributions up to 6% of his salary. He currently contributes 2% of his salary to this plan. -How is Tony doing with his cash management?

The Marshalls have been thinking about the financial principle ‑Pay Yourself First. Being very conservative, they might consider having their bank

Which of the following is not a common fee arrangement for checking accounts?

Your bank, First Bank, charges you $1.50 every time you use an ATM that is not owned by them. Unfortunately, there is no First Bank ATM near your school. There is a Second Bank ATM in the Student Center, which you use several times a week to withdraw $10 at a time for lunch, video games, etc. What is the best piece of advice regarding these transactions?

For a consumer who does not have a checking account a ________ check is a means of paying for goods and services.

Explain the advantages of credit unions. Are there any disadvantages to them?

What is involved with proper cash management?

One of the advantages of T-Bills is that they are exempt from federal taxes but subject to state income taxes.

What financial principle do they need to understand better?

Please choose the method to use when calculating the after-tax return.

The APY can never be the same as the APR.