Exam 4: Managing Your Cash and Savings

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -Low interest rates that have persisted since the financial crisis of 2008-09 have been a net benefit to [borrowers | retirees].

Series EE Savings bonds are now called Patriot Bonds.

One can avoid early withdrawal penalties on certificates of deposit (CDs)by purchasing them through brokerage firms.

The stated interest rate on your account is 7.12%,interest paid semi-annually.Your effective rate of interest will be:

A bank could advertise as "free" a checking account that requires a minimum balance of $3,000 to avoid monthly service charges.

A certified check is a personal check that the bank certifies to guarantee that the funds are available.

Asset management accounts are protected by the Federal Deposit Insurance Corporation (FDIC).

Which of the following is an important safeguard when using online banking?

Choose the word or phrase in [ ] which will correctly complete the statement.Select "a" for the first item,"b" for the second item,and "c" if neither item will correctly complete the statement. -Your bank does not levy a service charge on your checking account as long as a $1,000 minimum balance is maintained.Your bank [can | cannot] advertise this as free checking.

Vicki Vasquez owns a six-month treasury bill that is four months from maturity.She recently encountered medical problems and needs the money now.She:

The stated interest rate on your account is 3.5%,interest compounded monthly.If you deposit $100 each month,how much will you have in your account in 8 years? (Use time value tables or financial calculator.Select the closest answer.)

When reporting errors or unauthorized transactions,it is appropriate to notify your bank:

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

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 monthly minimum checking balances falls to about $350 on an average.Which of the following accounts would be least expensive for Maggie? (Show all your work.) Account A: Account B:

A stop payment results in an absolute promise by the bank not to pay the indicated check.

Which of the following accounts are partially or completely tax exempt from federal taxes when the earnings of the account are used to fund qualified college education expenses?

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

From the bank's perspective,ATM transactions are more costly than on-line banking transactions.

Compared to other depository financial institutions,credit unions:

NOW accounts are appropriate for people who need to keep substantial amounts of money in a checking account.