Question 1

Nate Rogers deposited $5,000 in a 3-year bank CD which pays six percent interest. What type of financial service is Nate using?

Accepted Answer

A)  Payment service 
B)  Savings service 
C)  Borrowing service 
D)  Trust service 
E)  Asset management 
A)  Payment service 
B)  Savings service 
C)  Borrowing service 
D)  Trust service 
E)  Asset management

Question 2

Savings and loan associations offer mortgages.

Accepted Answer

A) True 
 B)False

Question 3

Neil Guest writes a check to pay for day care for his son. What type of financial service is Neil using?

Accepted Answer

A)  Payment service 
B)  Savings service 
C)  Borrowing service 
D)  Trust services 
E)  Asset management 
A)  Payment service 
B)  Savings service 
C)  Borrowing service 
D)  Trust services 
E)  Asset management

Question 4

What type of account would be considered the most liquid?

Accepted Answer

A)  Certificate of deposit 
B)  Checking account 
C)  Money market account 
D)  Brokerage account 
E)  Share of stock 
A)  Certificate of deposit 
B)  Checking account 
C)  Money market account 
D)  Brokerage account 
E)  Share of stock

Question 5

An estimated _____ people in the U.S. are "unbanked", using a variety of alternative services rather than having a bank account.

Accepted Answer

A)  1 million 
B)  6 million 
C)  12 million 
D)  17 million 
E)  25 million 
A)  1 million 
B)  6 million 
C)  12 million 
D)  17 million 
E)  25 million

Question 6

Time deposits are another name for:

Accepted Answer

A)  checking accounts. 
B)  loans and charge accounts. 
C)  savings accounts. 
D)  government securities. 
E)  profits earned by a financial institution. 
A)  checking accounts. 
B)  loans and charge accounts. 
C)  savings accounts. 
D)  government securities. 
E)  profits earned by a financial institution.

Question 7

A pawnshop with a monthly interest rate of 2.75 percent would have an annual interest rate of ____ percent. Ignore compounding.

Accepted Answer

A)  33.00 
B)  27.50 
C)  20.00 
D)  5.50 
E)  2.75 
A)  33.00 
B)  27.50 
C)  20.00 
D)  5.50 
E)  2.75

Question 8

Which CD pays earnings based on the stock market?

Accepted Answer

A)  Bump-up 
B)  Indexed 
C)  Callable 
D)  Global 
E)  Promotional 
A)  Bump-up 
B)  Indexed 
C)  Callable 
D)  Global 
E)  Promotional

Question 9

When preparing a bank reconciliation, interest earned on your checking account is added to the bank statement balance.

Accepted Answer

A) True 
 B)False

Question 10

Credit unions frequently offer lower loan rates than other financial institutions.

Accepted Answer

A) True 
 B)False

Question 11

A certificate of deposit usually has:

Accepted Answer

A)  high interest-rate risk. 
B)  low safety for savers. 
C)  limited liquidity. 
D)  a variable rate of return. 
E)  no minimum deposit amount. 
A)  high interest-rate risk. 
B)  low safety for savers. 
C)  limited liquidity. 
D)  a variable rate of return. 
E)  no minimum deposit amount.

Question 12

The Federal Deposit Insurance Corporation provides deposit insurance for:

Accepted Answer

A)  credit unions and mutual savings banks. 
B)  commercial banks and savings and loan associations. 
C)  investment companies and finance companies. 
D)  insurance companies and credit unions. 
E)  commercial banks and credit unions. 
A)  credit unions and mutual savings banks. 
B)  commercial banks and savings and loan associations. 
C)  investment companies and finance companies. 
D)  insurance companies and credit unions. 
E)  commercial banks and credit unions.

Question 13

The rate of return on a savings account is also referred to as:

Accepted Answer

A)  liquidity. 
B)  compounding. 
C)  yield. 
D)  opportunity cost. 
E)  asset turnover. 
A)  liquidity. 
B)  compounding. 
C)  yield. 
D)  opportunity cost. 
E)  asset turnover.

Question 14

Sue deposited $1,000 in an account paying 3 percent interest. The inflation rate is 5 percent. What is the buying power of the account after one year?

Accepted Answer

A)  $1,050 
B)  $1,030 
C)  $1,000 
D)  $980 
E)  $950 
A)  $1,050 
B)  $1,030 
C)  $1,000 
D)  $980 
E)  $950

Question 15

Which of the following is a deposit institution?

Accepted Answer

A)  Life insurance company 
B)  Investment company 
C)  Mortgage company 
D)  Pawn shop 
E)  Credit union 
A)  Life insurance company 
B)  Investment company 
C)  Mortgage company 
D)  Pawn shop 
E)  Credit union

Question 16

When preparing a bank reconciliation, outstanding checks should be:

Accepted Answer

A)  added to the bank statement balance. 
B)  subtracted from the bank statement balance. 
C)  added to the checkbook balance. 
D)  subtracted from the checkbook balance. 
E)  ignored until they have cleared. 
A)  added to the bank statement balance. 
B)  subtracted from the bank statement balance. 
C)  added to the checkbook balance. 
D)  subtracted from the checkbook balance. 
E)  ignored until they have cleared.

Question 17

Using a "debit" card is basically the same as writing a check.

Accepted Answer

A) True 
 B)False

Question 18

This type of financial institution is known to frequently offer the lowest loan rates:

Accepted Answer

A)  Commercial bank 
B)  Savings and loans association 
C)  Mutual savings bank 
D)  Credit union 
E)  Investment companies 
A)  Commercial bank 
B)  Savings and loans association 
C)  Mutual savings bank 
D)  Credit union 
E)  Investment companies

Question 19

Purchasing a new CD upon maturity of the current CD is commonly referred to as:

Accepted Answer

A)  creating a CD portfolio. 
B)  rolling over. 
C)  refinancing. 
D)  calling a CD. 
E)  bumping up. 
A)  creating a CD portfolio. 
B)  rolling over. 
C)  refinancing. 
D)  calling a CD. 
E)  bumping up.

Question 20

Savings compounded ____________ would have the highest effective yield.

Accepted Answer

A)  daily 
B)  annually 
C)  semi-annually 
D)  monthly 
E)  weekly 
A)  daily 
B)  annually 
C)  semi-annually 
D)  monthly 
E)  weekly

Nate Rogers deposited $5,000 in a 3-year bank CD which pays six percent interest. What type of financial service is Nate using?

Savings and loan associations offer mortgages.

Neil Guest writes a check to pay for day care for his son. What type of financial service is Neil using?

What type of account would be considered the most liquid?

An estimated _____ people in the U.S. are "unbanked", using a variety of alternative services rather than having a bank account.

Time deposits are another name for:

A pawnshop with a monthly interest rate of 2.75 percent would have an annual interest rate of ____ percent. Ignore compounding.

Which CD pays earnings based on the stock market?

When preparing a bank reconciliation, interest earned on your checking account is added to the bank statement balance.

Credit unions frequently offer lower loan rates than other financial institutions.

A certificate of deposit usually has:

The Federal Deposit Insurance Corporation provides deposit insurance for:

The rate of return on a savings account is also referred to as:

Sue deposited $1,000 in an account paying 3 percent interest. The inflation rate is 5 percent. What is the buying power of the account after one year?

Which of the following is a deposit institution?

When preparing a bank reconciliation, outstanding checks should be:

Using a "debit" card is basically the same as writing a check.

This type of financial institution is known to frequently offer the lowest loan rates:

Purchasing a new CD upon maturity of the current CD is commonly referred to as:

Savings compounded ____________ would have the highest effective yield.

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Introduction to Consumer Credit

Choosing a Source of Credit: The Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health, Disability, and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters

Exam 5: Financial Services: Savings Plans and Payment Accounts

Nate Rogers deposited $5,000 in a 3-year bank CD which pays six percent interest. What type of financial service is Nate using?

Savings and loan associations offer mortgages.

Neil Guest writes a check to pay for day care for his son. What type of financial service is Neil using?

What type of account would be considered the most liquid?

An estimated _____ people in the U.S. are "unbanked", using a variety of alternative services rather than having a bank account.

Time deposits are another name for:

A pawnshop with a monthly interest rate of 2.75 percent would have an annual interest rate of ____ percent. Ignore compounding.

Which CD pays earnings based on the stock market?

When preparing a bank reconciliation, interest earned on your checking account is added to the bank statement balance.

Credit unions frequently offer lower loan rates than other financial institutions.

A certificate of deposit usually has:

The Federal Deposit Insurance Corporation provides deposit insurance for:

The rate of return on a savings account is also referred to as:

Sue deposited $1,000 in an account paying 3 percent interest. The inflation rate is 5 percent. What is the buying power of the account after one year?

Which of the following is a deposit institution?

When preparing a bank reconciliation, outstanding checks should be:

Using a "debit" card is basically the same as writing a check.

This type of financial institution is known to frequently offer the lowest loan rates:

Purchasing a new CD upon maturity of the current CD is commonly referred to as:

Savings compounded ____________ would have the highest effective yield.

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Introduction to Consumer Credit

Choosing a Source of Credit: The Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health, Disability, and Long-Term Care Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters