Question 1

If your bank states that it compounds monthly,the effective interest rate (APY)will be greater than the nominal interest rate.

Accepted Answer

A) True 
 B)False

Question 2

Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Low interest rates have [increased | decreased | not impacted ] the supply of credit.

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 3

Choose the word or phrase in [ ] which will correctly complete the statement. Select
-[Both Treasury bills and Series EE savings bonds | Only Treasury bills] are bought at a discount.

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 4

If Lois has $2,000 in checking,$50,000 in a money market account,and $75,000 in certificates of deposit (all individual accounts)at her local bank,her accounts would be insured through FDIC for $100,000.

Accepted Answer

A) True 
 B)False

Question 5

FDIC covers stocks,bonds,and mutual funds purchased at banks.

Accepted Answer

A) True 
 B)False

Question 6

Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Your bank pays 3% interest,compounded quarterly.At the end of one year,your $5,000 will have earned [$150 | over $150] interest.

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 7

Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Banks [may | must] state interest rates they pay as Annual Percentage Yields.

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 8

You put $1,000 into a 12-month certificate of deposit.After seven months,you really need the money.The bank will let you have it before 12 months,but you will pay a penalty.

Accepted Answer

A) True 
 B)False

Question 9

Gordon started saving $25 a month at age 20 in an account earning 4% compounded monthly.At age 40 he would have ____ in this account.(Use time value tables or financial calculator)

Accepted Answer

A)  $6,000 
B)  $7,170 
C)  $9,169 
D)  $9,255 
E)  $9,890 
A)  $6,000 
B)  $7,170 
C)  $9,169 
D)  $9,255 
E)  $9,890

Question 10

Joe Gustafson is a very busy person who likes to handle all his financial services needs with one account if possible.Which of the following types of accounts would best serve this need?

Accepted Answer

A)  checking account. 
B)  money market deposit account. 
C)  brokerage account. 
D)  asset management account. 
E)  all of the above. 
A)  checking account. 
B)  money market deposit account. 
C)  brokerage account. 
D)  asset management account. 
E)  all of the above.

Question 11

Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Interest earned on your [US EE savings bonds | municipal bond holdings] would be free of federal income taxes.

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 12

Which of the following would be best suited to using an Internet bank?

Accepted Answer

A)  Nancy Johnson,a young businesswoman who uses bank financing regularly for her business 
B)  Milan Sosa,an older gentleman who enjoys visiting his local banker 
C)  Molly Peterson,a woman who uses multiple bank services including a safe-deposit box 
D)  Fred Longoria,a man who uses checking and savings but never goes to his bank 
E)  All of the above would be good candidates because the cost of Internet banking is lower than other types of banks. 
A)  Nancy Johnson,a young businesswoman who uses bank financing regularly for her business 
B)  Milan Sosa,an older gentleman who enjoys visiting his local banker 
C)  Molly Peterson,a woman who uses multiple bank services including a safe-deposit box 
D)  Fred Longoria,a man who uses checking and savings but never goes to his bank 
E)  All of the above would be good candidates because the cost of Internet banking is lower than other types of banks.

Question 13

Compound interest means that a savings account earns interest on the interest previously earned.

Accepted Answer

A) True 
 B)False

Question 14

Specialization within the financial institutions industry continues to increase.

Accepted Answer

A) True 
 B)False

Question 15

The main business of an S&L is to provide home mortgage and home improvement loans.

Accepted Answer

A) True 
 B)False

Question 16

Most credit unions provide their members with deposit insurance.

Accepted Answer

A) True 
 B)False

Question 17

If one wanted to make monthly deposits to accumulate funds for future expenditures,a money market account would be an appropriate savings vehicle.

Accepted Answer

A) True 
 B)False

Question 18

The annual percentage yield (APY)formula considers compounding when determining an interest rate.

Accepted Answer

A) True 
 B)False

Question 19

A deposit of $6,000 saved in a CD for 10 years at 3% will be worth (select the closest answer)

Accepted Answer

A)  $7,340. 
B)  $7,800. 
C)  $8,040. 
D)  $8,678. 
E)  $9,005. 
A)  $7,340. 
B)  $7,800. 
C)  $8,040. 
D)  $8,678. 
E)  $9,005.

Question 20

A lump sum deposit of $8,000 left in the bank for 12 years at 9% compounded annually will result in an ending balance of (select the closest answer)

Accepted Answer

A)  $11,600. 
B)  $16,640. 
C)  $22,480. 
D)  $52,938. 
E)  $96,000. 
A)  $11,600. 
B)  $16,640. 
C)  $22,480. 
D)  $52,938. 
E)  $96,000.

If your bank states that it compounds monthly,the effective interest rate (APY)will be greater than the nominal interest rate.

Choose the word or phrase in [ ] which will correctly complete the statement. Select -Low interest rates have [increased | decreased | not impacted ] the supply of credit.

Choose the word or phrase in [ ] which will correctly complete the statement. Select -[Both Treasury bills and Series EE savings bonds | Only Treasury bills] are bought at a discount.

If Lois has $2,000 in checking,$50,000 in a money market account,and $75,000 in certificates of deposit (all individual accounts)at her local bank,her accounts would be insured through FDIC for $100,000.

FDIC covers stocks,bonds,and mutual funds purchased at banks.

Choose the word or phrase in [ ] which will correctly complete the statement. Select -Your bank pays 3% interest,compounded quarterly.At the end of one year,your $5,000 will have earned [$150 | over $150] interest.

Choose the word or phrase in [ ] which will correctly complete the statement. Select -Banks [may | must] state interest rates they pay as Annual Percentage Yields.

You put $1,000 into a 12-month certificate of deposit.After seven months,you really need the money.The bank will let you have it before 12 months,but you will pay a penalty.

Gordon started saving $25 a month at age 20 in an account earning 4% compounded monthly.At age 40 he would have ____ in this account.(Use time value tables or financial calculator)

Joe Gustafson is a very busy person who likes to handle all his financial services needs with one account if possible.Which of the following types of accounts would best serve this need?

Choose the word or phrase in [ ] which will correctly complete the statement. Select -Interest earned on your [US EE savings bonds | municipal bond holdings] would be free of federal income taxes.

Which of the following would be best suited to using an Internet bank?

Compound interest means that a savings account earns interest on the interest previously earned.

Specialization within the financial institutions industry continues to increase.

The main business of an S&L is to provide home mortgage and home improvement loans.

Most credit unions provide their members with deposit insurance.

If one wanted to make monthly deposits to accumulate funds for future expenditures,a money market account would be an appropriate savings vehicle.

The annual percentage yield (APY)formula considers compounding when determining an interest rate.

A deposit of $6,000 saved in a CD for 10 years at 3% will be worth (select the closest answer)

A lump sum deposit of $8,000 left in the bank for 12 years at 9% compounded annually will result in an ending balance of (select the closest answer)

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

If your bank states that it compounds monthly,the effective interest rate (APY)will be greater than the nominal interest rate.

Choose the word or phrase in [ ] which will correctly complete the statement. Select -Low interest rates have [increased | decreased | not impacted ] the supply of credit.

Choose the word or phrase in [ ] which will correctly complete the statement. Select -[Both Treasury bills and Series EE savings bonds | Only Treasury bills] are bought at a discount.

If Lois has $2,000 in checking,$50,000 in a money market account,and $75,000 in certificates of deposit (all individual accounts)at her local bank,her accounts would be insured through FDIC for $100,000.

FDIC covers stocks,bonds,and mutual funds purchased at banks.

Choose the word or phrase in [ ] which will correctly complete the statement. Select -Your bank pays 3% interest,compounded quarterly.At the end of one year,your $5,000 will have earned [$150 | over $150] interest.

Choose the word or phrase in [ ] which will correctly complete the statement. Select -Banks [may | must] state interest rates they pay as Annual Percentage Yields.

You put $1,000 into a 12-month certificate of deposit.After seven months,you really need the money.The bank will let you have it before 12 months,but you will pay a penalty.

Gordon started saving $25 a month at age 20 in an account earning 4% compounded monthly.At age 40 he would have ____ in this account.(Use time value tables or financial calculator)

Joe Gustafson is a very busy person who likes to handle all his financial services needs with one account if possible.Which of the following types of accounts would best serve this need?

Choose the word or phrase in [ ] which will correctly complete the statement. Select -Interest earned on your [US EE savings bonds | municipal bond holdings] would be free of federal income taxes.

Which of the following would be best suited to using an Internet bank?

Compound interest means that a savings account earns interest on the interest previously earned.

Specialization within the financial institutions industry continues to increase.

The main business of an S&L is to provide home mortgage and home improvement loans.

Most credit unions provide their members with deposit insurance.

If one wanted to make monthly deposits to accumulate funds for future expenditures,a money market account would be an appropriate savings vehicle.

The annual percentage yield (APY)formula considers compounding when determining an interest rate.

A deposit of $6,000 saved in a CD for 10 years at 3% will be worth (select the closest answer)

A lump sum deposit of $8,000 left in the bank for 12 years at 9% compounded annually will result in an ending balance of (select the closest answer)

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