Question 1

Which best describes the prime rate of interest?

Accepted Answer

A)  The lending rate banks charge their most creditworthy clients 
B)  The yield on 91-day treasury bills 
C)  The yield on 30-year government bonds 
D)  The lending rate the Bank of Canada charges financial institutions. 
E)  The base rate for all mortgages 
A)  The lending rate banks charge their most creditworthy clients 
B)  The yield on 91-day treasury bills 
C)  The yield on 30-year government bonds 
D)  The lending rate the Bank of Canada charges financial institutions. 
E)  The base rate for all mortgages A

Question 2

An advantage credit unions may have over other financial institutions is

Accepted Answer

A)  interest-bearing chequing accounts. 
B)  flexible-rate loans 
C)  low-cost personal loans. 
D)  credit cards. 
E)  variable-rate savings plans. 
A)  interest-bearing chequing accounts. 
B)  flexible-rate loans 
C)  low-cost personal loans. 
D)  credit cards. 
E)  variable-rate savings plans. C

Question 3

A trust has the purpose of

Accepted Answer

A)  solving a person's financial problems. 
B)  obtaining low-interest loans. 
C)  handling daily money management activities. 
D)  managing the assets of a person. 
E)  improving a person's budgeting skills. 
A)  solving a person's financial problems. 
B)  obtaining low-interest loans. 
C)  handling daily money management activities. 
D)  managing the assets of a person. 
E)  improving a person's budgeting skills. D

Question 4

List the fees and charges that chequing accounts may have.

Accepted Answer

Fees could include any of the following

Question 5

Activity accounts are designed for people who write many cheques each month.

Accepted Answer

A) True 
 B)False

Question 6

When preparing a bank reconciliation, outstanding cheques should be

Accepted Answer

A)  added to the bank statement balance. 
B)  subtracted from the bank statement balance. 
C)  added to the chequebook balance. 
D)  subtracted from the chequebook balance. 
E)  added to direct deposits. 
A)  added to the bank statement balance. 
B)  subtracted from the bank statement balance. 
C)  added to the chequebook balance. 
D)  subtracted from the chequebook balance. 
E)  added to direct deposits.

Question 7

In recent years, membership in credit unions has

Accepted Answer

A)  become more difficult due to higher taxes. 
B)  continued to increase. 
C)  been limited to government employees. 
D)  declined due to poor credit union management. 
E)  stayed at about the same level. 
A)  become more difficult due to higher taxes. 
B)  continued to increase. 
C)  been limited to government employees. 
D)  declined due to poor credit union management. 
E)  stayed at about the same level.

Question 8

The money market fund offered by investment companies is a highly liquid financial service.

Accepted Answer

A) True 
 B)False

Question 9

The storage of funds for future use is the purpose of ____________ services.

Accepted Answer

A)  trust 
B)  borrowing 
C)  credit card 
D)  savings 
E)  cash chequing 
A)  trust 
B)  borrowing 
C)  credit card 
D)  savings 
E)  cash chequing

Question 10

Savings compounded ____________ would have the lowest effective yield

Accepted Answer

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

Question 11

The convenience of using a financial institution with 24-hour banking frequently requires a trade-off with

Accepted Answer

A)  safety. 
B)  personal service. 
C)  growth of savings. 
D)  liquidity. 
E)  a lower rate of return. 
A)  safety. 
B)  personal service. 
C)  growth of savings. 
D)  liquidity. 
E)  a lower rate of return.

Question 12

A ____________ endorsement would be used if a person is presenting a cheque in order to obtain cash.

Accepted Answer

A)  restrictive 
B)  common 
C)  special 
D)  blank 
E)  documented 
A)  restrictive 
B)  common 
C)  special 
D)  blank 
E)  documented

Question 13

The business hours and location of a financial institution refer to the ____________ factor of selecting a financial institution.

Accepted Answer

A)  safety 
B)  cost 
C)  compounding 
D)  liquidity 
E)  convenience 
A)  safety 
B)  cost 
C)  compounding 
D)  liquidity 
E)  convenience

Question 14

A $400 savings account that earns $15 interest in a year has a yield of ____________ percent.

Accepted Answer

A)  6 
B)  15 
C)  4.75 
D)  3.75 
E)  6.5 
A)  6 
B)  15 
C)  4.75 
D)  3.75 
E)  6.5

Question 15

Direct deposit and automatic monthly payments are features of

Accepted Answer

A)  savings accounts. 
B)  chequing accounts. 
C)  electronic banking. 
D)  investments. 
E)  reserve funds. 
A)  savings accounts. 
B)  chequing accounts. 
C)  electronic banking. 
D)  investments. 
E)  reserve funds.

Question 16

The first information to be recorded when writing a cheque is the

Accepted Answer

A)  date. 
B)  cheque stub or cheque register. 
C)  payee. 
D)  amount. 
E)  signature. 
A)  date. 
B)  cheque stub or cheque register. 
C)  payee. 
D)  amount. 
E)  signature.

Question 17

If the annual rate is 2% and inflation is 3%, then the approximate real rate of return is:

Accepted Answer

A)  5.00% 
B)  3.00% 
C)  1.00% 
D)  - 1.0% 
E)  0% 
A)  5.00% 
B)  3.00% 
C)  1.00% 
D)  - 1.0% 
E)  0%

Question 18

Based on the following information, find the true balance of your chequing account and the sum, if any, of deposits in transit.
Balance on bank statement, $581
Total of outstanding cheques, $200
Service charges, $11
Interest earned on account, $7
Balance in your chequebook, $540

Accepted Answer

Reconciled balance =

Question 19

A "free" chequing account with a minimum balance of $500 has an opportunity cost of lost interest.

Accepted Answer

A) True 
 B)False

Question 20

If you think interest rates will decrease, you should consider investing your money in a longer-term GIC.

Accepted Answer

A) True 
 B)False

Which best describes the prime rate of interest?

An advantage credit unions may have over other financial institutions is

A trust has the purpose of

List the fees and charges that chequing accounts may have.

Activity accounts are designed for people who write many cheques each month.

When preparing a bank reconciliation, outstanding cheques should be

In recent years, membership in credit unions has

The money market fund offered by investment companies is a highly liquid financial service.

The storage of funds for future use is the purpose of ____________ services.

Savings compounded ____________ would have the lowest effective yield

The convenience of using a financial institution with 24-hour banking frequently requires a trade-off with

A ____________ endorsement would be used if a person is presenting a cheque in order to obtain cash.

The business hours and location of a financial institution refer to the ____________ factor of selecting a financial institution.

A $400 savings account that earns $15 interest in a year has a yield of ____________ percent.

Direct deposit and automatic monthly payments are features of

The first information to be recorded when writing a cheque is the

If the annual rate is 2% and inflation is 3%, then the approximate real rate of return is:

Based on the following information, find the true balance of your chequing account and the sum, if any, of deposits in transit. Balance on bank statement, $581 Total of outstanding cheques, $200 Service charges, $11 Interest earned on account, $7 Balance in your chequebook, $540

A "free" chequing account with a minimum balance of $500 has an opportunity cost of lost interest.

If you think interest rates will decrease, you should consider investing your money in a longer-term GIC.

Personal Financial Planning: An Introduction

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Introduction to Consumer Credit

Choosing a Source Credit: the Costs of Credit Alternatives

The Finances of Housing

Home and Automobile Insurance

Life, Health, and Disability Insurance

Fundamentals of Investing

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Retirement Planning

Estate Planning

Filters

Exam 4: The Banking Services of Financial Institutions

Which best describes the prime rate of interest?

An advantage credit unions may have over other financial institutions is

A trust has the purpose of

List the fees and charges that chequing accounts may have.

Activity accounts are designed for people who write many cheques each month.

When preparing a bank reconciliation, outstanding cheques should be

In recent years, membership in credit unions has

The money market fund offered by investment companies is a highly liquid financial service.

The storage of funds for future use is the purpose of ____________ services.

Savings compounded ____________ would have the lowest effective yield

The convenience of using a financial institution with 24-hour banking frequently requires a trade-off with

A ____________ endorsement would be used if a person is presenting a cheque in order to obtain cash.

The business hours and location of a financial institution refer to the ____________ factor of selecting a financial institution.

A $400 savings account that earns $15 interest in a year has a yield of ____________ percent.

Direct deposit and automatic monthly payments are features of

The first information to be recorded when writing a cheque is the

If the annual rate is 2% and inflation is 3%, then the approximate real rate of return is:

Based on the following information, find the true balance of your chequing account and the sum, if any, of deposits in transit. Balance on bank statement, $581 Total of outstanding cheques, $200 Service charges, $11 Interest earned on account, $7 Balance in your chequebook, $540

A "free" chequing account with a minimum balance of $500 has an opportunity cost of lost interest.

If you think interest rates will decrease, you should consider investing your money in a longer-term GIC.

Personal Financial Planning: An Introduction

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Introduction to Consumer Credit

Choosing a Source Credit: the Costs of Credit Alternatives

The Finances of Housing

Home and Automobile Insurance

Life, Health, and Disability Insurance

Fundamentals of Investing

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Retirement Planning

Estate Planning

Filters