Question 1

A disadvantage of an MMMF is

Accepted Answer

A) high interest rates. 
B) administrative fees. 
C) limited risk. 
D) check writing privileges. 
A) high interest rates. 
B) administrative fees. 
C) limited risk. 
D) check writing privileges. B

Question 2

How do you compare cash management alternatives to determine which is best for you?

Accepted Answer

A) Compare returns using comparable interest rates. 
B) Take into account their tax status. 
C) Consider their safety or risk. 
D) All of the above are correct. 
A) Compare returns using comparable interest rates. 
B) Take into account their tax status. 
C) Consider their safety or risk. 
D) All of the above are correct. D

Question 3

Why is it important to convert interest rates into the APY on different accounts and with different banks?

Accepted Answer

A) Some banks and accounts pay higher advertised rates. 
B) The same advertised rate will vary with different compounding periods. 
C) The Truth in Savings Act of 1993 omits this comparison. 
D) With FDIC Banks it is not necessary to convert interest rates for comparison. 
A) Some banks and accounts pay higher advertised rates. 
B) The same advertised rate will vary with different compounding periods. 
C) The Truth in Savings Act of 1993 omits this comparison. 
D) With FDIC Banks it is not necessary to convert interest rates for comparison. B

Question 4

Keeping your funds in liquid assets is riskier than keeping them in illiquid assets and therefore investors require a higher expected rate of return on liquid assets.

Accepted Answer

A) True 
 B)False

Question 5

You have $5,000 in a 36 month Certificate of Deposit that has an APR of 3.75%.If inflation averages 4.25% during these 36 months,what is the real return on your CD?

Accepted Answer

A) 3.75 percent 
B) 8.0 percent 
C) Negative .50 percent 
D) Negative 8.0 percent 
A) 3.75 percent 
B) 8.0 percent 
C) Negative .50 percent 
D) Negative 8.0 percent

Question 6

A tax free investment will always have a higher after-tax return than a taxable investment.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following characteristics apply to liquid assets?

Accepted Answer

A) They are characterized by low returns. 
B) They involve low risk. 
C) The temptation to spend is greater. 
D) All of the above are correct. 
A) They are characterized by low returns. 
B) They involve low risk. 
C) The temptation to spend is greater. 
D) All of the above are correct.

Question 8

Explain the two types of gift,or stored value,cards.

Accepted Answer

There are two kinds of gift,or stored va

Question 9

What recommendations would you give Christopher concerning his cash management?

Accepted Answer

A) Create a budget and set some savings goals. 
B) Automate a savings plan using EFT. 
C) Set up an account at a mutual fund company. 
D) All of the above are good recommendations. 
E) All of the above except C are good recommendations. 
A) Create a budget and set some savings goals. 
B) Automate a savings plan using EFT. 
C) Set up an account at a mutual fund company. 
D) All of the above are good recommendations. 
E) All of the above except C are good recommendations.

Question 10

Suppose that you go to a bank at which you have no account,give the bank cash,and in return obtain a check drawn against that bank which you will use to pay someone else.This is called a

Accepted Answer

A) cashier's check. 
B) certified check. 
C) traveler's check. 
D) None of the above are correct. 
A) cashier's check. 
B) certified check. 
C) traveler's check. 
D) None of the above are correct.

Question 11

It is wise to wait until you are earning a substantial amount of money before you establish a disciplined financial plan for your future.

Accepted Answer

A) True 
 B)False

Question 12

Explain the advantages of credit unions.Are there any disadvantages to them?

Accepted Answer

Credit unions enjoy a tax-exempt status

Question 13

Online and mobile banking allows you to do the following

Accepted Answer

A) access your accounts at any time of day. 
B) transfer funds between accounts. 
C) pay bills and receive payments online. 
D) all of the above. 
A) access your accounts at any time of day. 
B) transfer funds between accounts. 
C) pay bills and receive payments online. 
D) all of the above.

Question 14

Liquid assets or funds are important to

Accepted Answer

A) cover unplanned expenses. 
B) prevent interrupting your long-term investments. 
C) prevent overdrafts in checking accounts. 
D) cover some planned expenses. 
E) All of the above are correct. 
A) cover unplanned expenses. 
B) prevent interrupting your long-term investments. 
C) prevent overdrafts in checking accounts. 
D) cover some planned expenses. 
E) All of the above are correct.

Question 15

The ________ converts interest rates compounded for different periods into comparable annual rates,allowing you to compare interest rates easily.

Accepted Answer

A) APR 
B) APY 
C) YTD 
D) YAY 
A) APR 
B) APY 
C) YTD 
D) YAY

Question 16

Online banking simplifies cash management and budgeting for consumers.

Accepted Answer

A) True 
 B)False

Question 17

According to the Keown book,one way to think of liquid assets is as a(n)

Accepted Answer

A) reservoir,with money moving in as wages are received and moving out as living expenses are paid. 
B) apple tree farm: pick money off of the money tree whenever you need it. 
C) garden: plant the seeds and the green is readily available. 
D) wind current: easy come,easy go. 
A) reservoir,with money moving in as wages are received and moving out as living expenses are paid. 
B) apple tree farm: pick money off of the money tree whenever you need it. 
C) garden: plant the seeds and the green is readily available. 
D) wind current: easy come,easy go.

Question 18

Four banking conveniences are listed below.Which one is not typical?

Accepted Answer

A) Safety deposit boxes 
B) Online banking services 
C) Direct deposit 
D) Overdraft protection 
E) All of the above are typical banking conveniences. 
A) Safety deposit boxes 
B) Online banking services 
C) Direct deposit 
D) Overdraft protection 
E) All of the above are typical banking conveniences.

Question 19

What is the name for an automatic loan made to your checking account whenever your account does not contain enough cash to cover the checks that you have written against it?

Accepted Answer

A) No fee checking coverage 
B) Overdraft protection 
C) Automatic check coverage (AC
C)  
D) Draft-free checking 
E) None of the above are correct answers. 
A) No fee checking coverage 
B) Overdraft protection 
C) Automatic check coverage (AC
C)  
D) Draft-free checking 
E) None of the above are correct answers.

Question 20

What are the four questions you should answer when looking for a financial institution?

Accepted Answer

You will want to know if it offers the k

A disadvantage of an MMMF is

How do you compare cash management alternatives to determine which is best for you?

Why is it important to convert interest rates into the APY on different accounts and with different banks?

Keeping your funds in liquid assets is riskier than keeping them in illiquid assets and therefore investors require a higher expected rate of return on liquid assets.

You have $5,000 in a 36 month Certificate of Deposit that has an APR of 3.75%.If inflation averages 4.25% during these 36 months,what is the real return on your CD?

A tax free investment will always have a higher after-tax return than a taxable investment.

Which of the following characteristics apply to liquid assets?

Explain the two types of gift,or stored value,cards.

What recommendations would you give Christopher concerning his cash management?

Suppose that you go to a bank at which you have no account,give the bank cash,and in return obtain a check drawn against that bank which you will use to pay someone else.This is called a

It is wise to wait until you are earning a substantial amount of money before you establish a disciplined financial plan for your future.

Explain the advantages of credit unions.Are there any disadvantages to them?

Online and mobile banking allows you to do the following

Liquid assets or funds are important to

The ________ converts interest rates compounded for different periods into comparable annual rates,allowing you to compare interest rates easily.

Online banking simplifies cash management and budgeting for consumers.

According to the Keown book,one way to think of liquid assets is as a(n)

Four banking conveniences are listed below.Which one is not typical?

What is the name for an automatic loan made to your checking account whenever your account does not contain enough cash to cover the checks that you have written against it?

What are the four questions you should answer when looking for a financial institution?

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Using Credit Cards: the Role of Open Credit

Student and Consumer Loans: the Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: an Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Eventsfitting the Pieces Together

Filters

Exam 5: Cash or Liquid Asset Management

A disadvantage of an MMMF is

How do you compare cash management alternatives to determine which is best for you?

Why is it important to convert interest rates into the APY on different accounts and with different banks?

Keeping your funds in liquid assets is riskier than keeping them in illiquid assets and therefore investors require a higher expected rate of return on liquid assets.

You have $5,000 in a 36 month Certificate of Deposit that has an APR of 3.75%.If inflation averages 4.25% during these 36 months,what is the real return on your CD?

A tax free investment will always have a higher after-tax return than a taxable investment.

Which of the following characteristics apply to liquid assets?

Explain the two types of gift,or stored value,cards.

What recommendations would you give Christopher concerning his cash management?

Suppose that you go to a bank at which you have no account,give the bank cash,and in return obtain a check drawn against that bank which you will use to pay someone else.This is called a

It is wise to wait until you are earning a substantial amount of money before you establish a disciplined financial plan for your future.

Explain the advantages of credit unions.Are there any disadvantages to them?

Online and mobile banking allows you to do the following

Liquid assets or funds are important to

The ________ converts interest rates compounded for different periods into comparable annual rates,allowing you to compare interest rates easily.

Online banking simplifies cash management and budgeting for consumers.

According to the Keown book,one way to think of liquid assets is as a(n)

Four banking conveniences are listed below.Which one is not typical?

What is the name for an automatic loan made to your checking account whenever your account does not contain enough cash to cover the checks that you have written against it?

What are the four questions you should answer when looking for a financial institution?

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Using Credit Cards: the Role of Open Credit

Student and Consumer Loans: the Role of Planned Borrowing

The Home and Automobile Decision

Life and Health Insurance

Property and Liability Insurance

Investment Basics

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: an Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Eventsfitting the Pieces Together

Filters