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. -It costs financial institutions more for their customers to perform [ATM transactions | Internet transactions].

Low interest rates encourage the substitution of capital for labor,thereby depressing employment.

The rate of return on a Series EE savings bond changes semiannually.

Low interest rates that have persisted since the financial crisis of 2008-09 have been a net benefit to:

With low interest rates,savers have begun investing in stock where higher yields can be found.

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. -An investor would typically expect to receive higher interest rates on her [certificate of deposit | Treasury bill].

Sandy wants to go on a trip in 10 years.If she invests $1,000 per year at the end of each year for 10 years at a 12% interest rate,she will accumulate _____ to spend on her trip.(Use time value table or financial calculator.Select the closest answer.)

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

Terry started saving $50 a month at age 25 in an account earning 6% compounded monthly.At age 40 she would have _____ in this account.(Use time value tables or financial calculator.Select the closest answer.)

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. -You are buying a large amount of merchandise through the mail from a dealer several hundred miles from you with whom you have never dealt before.The dealer will probably require that you pay him with a cashier's or [traveler's | certified] check.

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 2 business days.

The annual percentage yield is the same as the:

The FDIC insures depositor's funds up to $250,000 at member banks under the same depositor's name.

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. -Interest earned on your [credit union account | Treasury bill holdings] would be free of state income taxes.

Credit unions channel the savings of depositors primarily into mortgage loans for purchasing and improving homes.

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. -[Both Treasury bills and Series EE savings bonds | Only Treasury bills] are bought at a discount.

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

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. -Credit unions are more likely to be paying [higher | lower] interest on their accounts than a commercial bank.

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. -You make a promise to keep funds on deposit for a stated period of time when you open a [MMDA | CD].

A cashier's check is written on the bank's account rather than on a customer's account.