Exam 5: Banking and Interest Rates

Securities firms primarily sell insurance to protect individuals from adverse events.

When you invest in a CD that has a maturity of one year,you are guaranteed the interest rate offered on that CD.Your return would be termed

A(n)________ card allows you to pay for a purchase directly from your checking account without writing a check.

The term structure is often based on rates of return or yields offered by ________ which are ________ issued by the U.S.Treasury with different maturities.

A mutual fund is a means by which investors with only a small amount of money can invest in a portfolio of securities.

Cashier's checks,money orders,and traveler's checks are secured check alternatives to a personal check and therefore are more risk-free for the payee.

________ are nondepository institutions that facilitate the purchase or sale of securities by firms or individuals by providing investment banking services and brokerage services.

Lorenzo is considering two banks for his checking account.Suny Bank requires a minimum deposit of $100,charges a monthly fee of $8,plus 5 cents a check.Merchants Bank also requires a minimum deposit of $100,charges no monthly fee,but a per check charge of 15 cents.How many checks would Lorenzo need to write each month to make Suny Bank cheaper to use than Merchants? (a)Over 50 (b)Over 60 (c)Over 70 (d)Over 80

Which of the following is not a fee that financial institutions charge?

Interest rates could change due to all of the following except

You can be assured that if your ATM query shows you have a certain balance in your checking account,that figure is more accurate than the amount in your check register.

The risk-free rate on borrowed funds is determined by

Deposits in commercial banks which are members of the FDIC,are insured up to a maximum of $50,000 per account.

Wanda Clark expects interest rates to decline in the next few months.To maximize her earnings,she should put her savings in a

Because they have lower expenses,Web-based financial institutions tend to pay higher interest rates on deposits than institutions with physical branches.

Which of the following is a nonprofit depository institution that provides services only to members who have a common affiliation?

Debit cards allow you to pay for a purchase later when the bill arrives.

Financial institutions loan funds at a ________ they pay depositors.

You have $3,000 that you may need any day to replace the furnace in your house.Which of the following would be the best place to put the $3,000?

Which of the following should not affect your choice of a financial institution?