Question 1

There are some limitations on check writing for both MMDAs and MMMFs.

Accepted Answer

A) True 
 B)False

Question 2

Money market mutual funds are insured up to $250,000 by the FDIC if purchased at an insured bank.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is not true of low interest rates?

Accepted Answer

A)  It encourages investors to search out investments like high dividend stock. 
B)  It encourages the substitution of debt for equity. 
C)  Low interest rates have increased the supply of credit. 
D)  Low rates penalized savers. 
E)  Low rates may discourage paying down the national debt. 
A)  It encourages investors to search out investments like high dividend stock. 
B)  It encourages the substitution of debt for equity. 
C)  Low interest rates have increased the supply of credit. 
D)  Low rates penalized savers. 
E)  Low rates may discourage paying down the national debt.

Question 4

Choose the word or phrase in [ ] which will correctly complete the statement. Select
-[Both the depositor and writer | Only the writer] of a "bad" check will likely be charged a fee by their/his banks/bank.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 5

Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Today the differences between a commercial bank and an S&L are [minor | major].

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 6

Convenience and improved record keeping are two advantages sited for on-line bill payment.

Accepted Answer

A) True 
 B)False

Question 7

Lower borrowing costs encourage the substitution of debt for equity in corporate capital structures,which increases financial risk.

Accepted Answer

A) True 
 B)False

Question 8

If you invest $1,200 per year at the end of each year for 40 years at an 8% rate of return,you will have accumulated (Use time value table or financial calculator.)

Accepted Answer

A)  $ 48,000. 
B)  $ 51,840. 
C)  $310,862. 
D)  $379,000. 
E)  $384,000. 
A)  $ 48,000. 
B)  $ 51,840. 
C)  $310,862. 
D)  $379,000. 
E)  $384,000.

Question 9

A(n)____ is not an interest-bearing account.

Accepted Answer

A)  money market mutual fund 
B)  money market deposit account 
C)  NOW account 
D)  asset management account 
E)  regular checking account 
A)  money market mutual fund 
B)  money market deposit account 
C)  NOW account 
D)  asset management account 
E)  regular checking account

Question 10

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

Accepted Answer

A)  convenience and cost 
B)  convenience and services 
C)  cost and services 
D)  convenience,services,and cost 
A)  convenience and cost 
B)  convenience and services 
C)  cost and services 
D)  convenience,services,and cost

Question 11

Internet-only banks typically pay lower interest rates on savings than traditional banks.

Accepted Answer

A) True 
 B)False

Question 12

As of 2012,if your account balances at a bank are $115,000,you will have depositor's insurance for up to $250,000.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is not a strategy to building your nest egg:

Accepted Answer

A)  make savings a priority 
B)  reinvest interest and dividends 
C)  splurge once in a while 
D)  set up a retirement plan 
E)  all the above are strategies. 
A)  make savings a priority 
B)  reinvest interest and dividends 
C)  splurge once in a while 
D)  set up a retirement plan 
E)  all the above are strategies.

Question 14

A check you issued last week has been stolen.You can prevent it from being withdrawn from your account by an unauthorized person by

Accepted Answer

A)  writing a new check. 
B)  depositing the correct amount of money. 
C)  requesting a stop payment. 
D)  tearing up the check. 
E)  properly endorsing the check. 
A)  writing a new check. 
B)  depositing the correct amount of money. 
C)  requesting a stop payment. 
D)  tearing up the check. 
E)  properly endorsing the check.

Question 15

The minimum denomination for Treasury bills is now $1,000.

Accepted Answer

A) True 
 B)False

Question 16

You have $450 in your checking account when your ATM card and PIN are stolen.You could lose up to ____ if you report the lost ATM card within 8 business days.

Accepted Answer

A)  $ 0 
B)  $ 25 
C)  $ 50 
D)  $450 
E)  $500 
A)  $ 0 
B)  $ 25 
C)  $ 50 
D)  $450 
E)  $500

Question 17

Choose the word or phrase in [ ] which will correctly complete the statement. Select
-You would expect to find an asset management account at a [commercial bank | brokerage firm].

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 18

If you write a check for an amount greater than your account balance,the result will be

Accepted Answer

A)  an endorsement. 
B)  a reconciliation. 
C)  an overdraft. 
D)  a share draft. 
E)  a stop payment. 
A)  an endorsement. 
B)  a reconciliation. 
C)  an overdraft. 
D)  a share draft. 
E)  a stop payment.

Question 19

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 ATM 35 times a month.Her minimum checking balances falls to about $350 in an average month.Which of the following accounts would be least expensive for Maggie? (Show all your work.)
Account A:
   Account B:

Accepted Answer

Account A Cost of Account A =

Question 20

Mandy has $2,000 she would like to start a savings program.She will add to it regularly by investing $50 per month in a liquid account.Which of the following types of accounts would be most appropriate in this situation?

Accepted Answer

A)  Series EE US savings bonds 
B)  Money market deposit account 
C)  Certificates of deposit 
D)  US Treasury bills 
E)  NOW account 
A)  Series EE US savings bonds 
B)  Money market deposit account 
C)  Certificates of deposit 
D)  US Treasury bills 
E)  NOW account

There are some limitations on check writing for both MMDAs and MMMFs.

Money market mutual funds are insured up to $250,000 by the FDIC if purchased at an insured bank.

Which of the following is not true of low interest rates?

Choose the word or phrase in [ ] which will correctly complete the statement. Select -[Both the depositor and writer | Only the writer] of a "bad" check will likely be charged a fee by their/his banks/bank.

Choose the word or phrase in [ ] which will correctly complete the statement. Select -Today the differences between a commercial bank and an S&L are [minor | major].

Convenience and improved record keeping are two advantages sited for on-line bill payment.

Lower borrowing costs encourage the substitution of debt for equity in corporate capital structures,which increases financial risk.

If you invest $1,200 per year at the end of each year for 40 years at an 8% rate of return,you will have accumulated (Use time value table or financial calculator.)

A(n)____ is not an interest-bearing account.

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

Internet-only banks typically pay lower interest rates on savings than traditional banks.

As of 2012,if your account balances at a bank are $115,000,you will have depositor's insurance for up to $250,000.

Which of the following is not a strategy to building your nest egg:

A check you issued last week has been stolen.You can prevent it from being withdrawn from your account by an unauthorized person by

The minimum denomination for Treasury bills is now $1,000.

You have $450 in your checking account when your ATM card and PIN are stolen.You could lose up to ____ if you report the lost ATM card within 8 business days.

Choose the word or phrase in [ ] which will correctly complete the statement. Select -You would expect to find an asset management account at a [commercial bank | brokerage firm].

If you write a check for an amount greater than your account balance,the result will be

Mandy has $2,000 she would like to start a savings program.She will add to it regularly by investing $50 per month in a liquid account.Which of the following types of accounts would be most appropriate in this situation?

Understanding the Financial Planning Process

Using Financial Statements and Budgets

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

Planning for Retirement

Preserving Your Estate

Filters

Exam 4: Managing Your Cash and Savings

There are some limitations on check writing for both MMDAs and MMMFs.

Money market mutual funds are insured up to $250,000 by the FDIC if purchased at an insured bank.

Which of the following is not true of low interest rates?

Choose the word or phrase in [ ] which will correctly complete the statement. Select -[Both the depositor and writer | Only the writer] of a "bad" check will likely be charged a fee by their/his banks/bank.

Choose the word or phrase in [ ] which will correctly complete the statement. Select -Today the differences between a commercial bank and an S&L are [minor | major].

Convenience and improved record keeping are two advantages sited for on-line bill payment.

Lower borrowing costs encourage the substitution of debt for equity in corporate capital structures,which increases financial risk.

If you invest $1,200 per year at the end of each year for 40 years at an 8% rate of return,you will have accumulated (Use time value table or financial calculator.)

A(n)____ is not an interest-bearing account.

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

Internet-only banks typically pay lower interest rates on savings than traditional banks.

As of 2012,if your account balances at a bank are $115,000,you will have depositor's insurance for up to $250,000.

Which of the following is not a strategy to building your nest egg:

A check you issued last week has been stolen.You can prevent it from being withdrawn from your account by an unauthorized person by

The minimum denomination for Treasury bills is now $1,000.

You have $450 in your checking account when your ATM card and PIN are stolen.You could lose up to ____ if you report the lost ATM card within 8 business days.

Choose the word or phrase in [ ] which will correctly complete the statement. Select -You would expect to find an asset management account at a [commercial bank | brokerage firm].

If you write a check for an amount greater than your account balance,the result will be

Mandy has $2,000 she would like to start a savings program.She will add to it regularly by investing $50 per month in a liquid account.Which of the following types of accounts would be most appropriate in this situation?

Understanding the Financial Planning Process

Using Financial Statements and Budgets

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

Planning for Retirement

Preserving Your Estate

Filters