Question 1

Compared to other depository financial institutions, credit unions:

Accepted Answer

A) are more beneficial to all kinds of consumers. 
B) pay lower interest on savings to their members. 
C) have a greater number of account holders. 
D) have a greater number of branches. 
E) charge lower rates on loans to their members.

Question 2

Your checkbook balance shows $706.50. The bank statement shows $772.77. The bank paid $2.50 interest. Checks 1501 ($85.00), 1507 ($50.16), and 1511 ($20.50)are not shown on the statement. A service charge of $5.00 was levied by the bank. You made an $85.00 deposit yesterday that is not on the statement. What is the reconciled balance? (Show all work.)

Accepted Answer

The answer of Your checkbook balance shows $706.50. The bank...

Question 3

Funds in commercial banks are protected by the:

Accepted Answer

A) National Credit Union Administration (NCU
A) . 
B) Federal Depositors Assurance Corporation (FDA
C) . 
C) Federal Deposit Insurance Corporation (FDI
C) . 
D) National Credit Union Share Insurance Fund (NCUSIF). 
E) Savings Association Insurance Fund (SAIF).

Question 4

Nondepository institutions are referred to as banks.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is an interest-bearing checking account?

Accepted Answer

A) Certificate of deposit 
B) Treasury bill 
C) Negotiable order of withdrawal (NOW)account 
D) Series EE U.S. savings bond 
E) Regular checking account

Question 6

When doing an account reconciliation, interest earned on your account should be:

Accepted Answer

A) deducted from your checkbook ledger. 
B) added to your checkbook ledger. 
C) ignored because the bank has already recorded it. 
D) listed as outstanding. 
E) treated like a loan.

Question 7

At maturity, a deposit of $6,000 in a certificate of deposit (CD)for 10 years at 3% will be worth: (Select the closest answer.)

Accepted Answer

A) $7,340. 
B) $7,800. 
C) $8,064. 
D) $8,678. 
E) $9,005.

Question 8

Joe Gustafson is a very busy person who prefers to use one account to handle all his financial services needs like checking, investing, and borrowing. Which of the following types of accounts is most suitable for Joe?

Accepted Answer

A) A checking account 
B) A money market deposit account 
C) A brokerage account 
D) An asset management account 
E) A savings account

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Money market mutual funds:

Accepted Answer

A) allow check writing above a stipulated minimum amount. 
B) are federally insured. 
C) have floating maturity dates. 
D) are offered by savings and loan associations (S&Ls)and credit unions. 
E) pay interest 1 to 3% lower than those paid by a regular savings account.

Question 11

A customer withdraws funds by writing checks from his or her negotiable order of withdrawal (NOW)account and:

Accepted Answer

A) certificate of deposit. 
B) savings account. 
C) term insurance deposit. 
D) time deposit. 
E) share draft account.

Question 12

Low interest rates:

Accepted Answer

A) increase the number of financial institutions. 
B) do not impact the supply of credit. 
C) increase the demand for lower-grade, riskier bonds. 
D) decrease employment opportunities. 
E) reduce asset prices in financial markets.

Question 13

Whenever you write a check or make a deposit, an entry should be made in your:

Accepted Answer

A) deposit slip. 
B) checkbook ledger. 
C) overdraft booklet. 
D) balance sheet. 
E) personal check.

Question 14

______  offer banking services but do not accept deposits like traditional banks.

Accepted Answer

A) Nondepository institutions 
B) Stock brokerage firms 
C) Nonprofit organizations 
D) Credit bureaus 
E) Mutual funds

Question 15

The more frequently a bank compounds interest, _____ for a given nominal rate will be.

Accepted Answer

A) the higher the stated interest rate 
B) the lower the inflation rate 
C) the higher the effective rate 
D) the lower the yield rate 
E) the higher the normal rate

Question 16

Mary has calculated her adjusted balance as $500. She notices that her bank's service charges are $20 for this period. Mary's ending balance in her bank account is:

Accepted Answer

A) $520. 
B) $480. 
C) $600. 
D) $500. 
E) $510.

Question 17

_____  is the routine, day-to-day administration of liquid assets by an individual or family.

Accepted Answer

A) Depository management 
B) Resource management 
C) Cash management 
D) Bond management 
E) Treasury management

Question 18

Money market deposit accounts:

Accepted Answer

A) allow free unlimited check writing every month. 
B) are federally insured. 
C) have floating maturity dates. 
D) are offered only by credit unions. 
E) pay the lowest interest rates of any bank accounts with check-writing facility.

Question 19

A(n)_____ account is called a demand deposit.

Accepted Answer

A) checking 
B) savings 
C) asset management 
D) time deposit 
E) certificate of deposit

Question 20

Interest earned for a period should be added to the ending balance shown in your checkbook while reconciling your account.

Accepted Answer

A) True 
 B)False

Exam 4: Managing Your Cash and Savings

Compared to other depository financial institutions, credit unions:

Funds in commercial banks are protected by the:

Nondepository institutions are referred to as banks.

Which of the following is an interest-bearing checking account?

When doing an account reconciliation, interest earned on your account should be:

At maturity, a deposit of $6,000 in a certificate of deposit (CD) for 10 years at 3% will be worth: (Select the closest answer.)

Joe Gustafson is a very busy person who prefers to use one account to handle all his financial services needs like checking, investing, and borrowing. Which of the following types of accounts is most suitable for Joe?

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

Money market mutual funds:

A customer withdraws funds by writing checks from his or her negotiable order of withdrawal (NOW) account and:

Low interest rates:

Whenever you write a check or make a deposit, an entry should be made in your:

______ offer banking services but do not accept deposits like traditional banks.

The more frequently a bank compounds interest, _____ for a given nominal rate will be.

Mary has calculated her adjusted balance as $500. She notices that her bank's service charges are $20 for this period. Mary's ending balance in her bank account is:

_____ is the routine, day-to-day administration of liquid assets by an individual or family.

Money market deposit accounts:

A(n) _____ account is called a demand deposit.

Interest earned for a period should be added to the ending balance shown in your checkbook while reconciling your account.