Question 1

A check you wrote to buy shoes last week has not yet been received and processed by the bank. It is said to be:

Accepted Answer

A)  outstanding. 
B)  credited. 
C)  endorsed. 
D)  certified. 
E)  deposited.

Question 2

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 (MMD
A)  
C)  A brokerage account 
D)  An asset management account (AM
A)  
E)  A savings account

Question 3

Cash management helps in personal financial planning.

Accepted Answer

A) True 
 B)False

Question 4

John Anderson deposited $10,000 in a certificate of deposit (CD) for 3 years at 5%. At maturity, how much will the CD be worth? (Round the answer to the nearest dollar.)

Accepted Answer

A)  $10,500 
B)  $10,725 
C)  $11,400 
D)  $11,580 
E)  $12,400

Question 5

Which of the following statements regarding safe-deposit boxes offered by banks is true?

Accepted Answer

A)  They can be opened only by the banker. 
B)  They may increase a homeowner's insurance premiums. 
C)  They are owned by the customers of the bank. 
D)  They can be used to manage mutual funds. 
E)  They can be used as a storage place for important documents.

Question 6

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 7

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 8

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

Accepted Answer

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

Question 9

Which of the following is an aspect of asset management accounts (AMAs)?

Accepted Answer

A)  Limited free checking of available balance 
B)  "Sweeping" of excess balances into money market deposit account (MMD
A)  
C)  Fixed annual fees and account charges on deposit account 
D)  Borrowing and investing facility unavailable to accountholders 
E)  Deposits protected by the Securities Investor Protection Corporation (SIP
C)

Question 10

Convenience is a reason for the growth in popularity of:

Accepted Answer

A)  Internet banks. 
B)  savings and loan associations (S&Ls). 
C)  mutual savings banks. 
D)  credit unions. 
E)  insurance companies.

Question 11

A(n) _____ is traditionally a non-interest-paying demand deposit account.

Accepted Answer

A)  money market mutual fund (MMMF) 
B)  money market deposit account (MMD
A)  
C)  negotiable order of withdrawal (NOW) account 
D)  asset management account (AM
A)  
E)  regular checking account

Question 12

Which of the following statements regarding low interest rates is true?

Accepted Answer

A)  They encourage investors to search for investments like Treasury bills. 
B)  They encourage the substitution of equity by debt. 
C)  They encourage investors to search for stocks paying high dividends. 
D)  They encourage individuals to save more. 
E)  They encourage paying down the national debt.

Question 13

INSTRUCTIONS: 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 [automated teller machine ( ATM) | Internet ] transactions.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 14

Negotiable order of withdrawal (NOW) accounts manage and administer the investments in a trust account or from an estate.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following are protected by the Federal Deposit Insurance Corporation (FDIC)?

Accepted Answer

A)  Money market deposit accounts (MMDAs) 
B)  Money market mutual funds (MMMFs) 
C)  Asset management accounts (AMAs) 
D)  Stocks and bonds 
E)  Life insurance policies

Question 16

Debit cards are a form of an electronic funds transfer system (EFTS).

Accepted Answer

A) True 
 B)False

Question 17

Keeping valuables in a safe-deposit box may reduce your homeowner's insurance premium by eliminating the "riders" that are often needed to cover such items.

Accepted Answer

A) True 
 B)False

Question 18

INSTRUCTIONS: 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 provide [ more | less ] income from savings.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 19

The least expensive method for banks to interact with their customers is through:

Accepted Answer

A)  a vendor. 
B)  phone calls. 
C)  the Internet. 
D)  an automated teller machine (ATM). 
E)  a full-service teller.

Question 20

The minimum denomination of T-bills is:

Accepted Answer

A)  $25. 
B)  $50. 
C)  $100. 
D)  $500. 
E)  $1,000.

Exam 4: Managing Your Cash and Savings

A check you wrote to buy shoes last week has not yet been received and processed by the bank. It is said to be:

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?

Cash management helps in personal financial planning.

John Anderson deposited $10,000 in a certificate of deposit (CD) for 3 years at 5%. At maturity, how much will the CD be worth? (Round the answer to the nearest dollar.)

Which of the following statements regarding safe-deposit boxes offered by banks is true?

Low interest rates:

Compared to other depository financial institutions, credit unions:

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

Which of the following is an aspect of asset management accounts (AMAs) ?

Convenience is a reason for the growth in popularity of:

A(n) _____ is traditionally a non-interest-paying demand deposit account.

Which of the following statements regarding low interest rates is true?

Negotiable order of withdrawal (NOW) accounts manage and administer the investments in a trust account or from an estate.

Which of the following are protected by the Federal Deposit Insurance Corporation (FDIC) ?

Debit cards are a form of an electronic funds transfer system (EFTS).

Keeping valuables in a safe-deposit box may reduce your homeowner's insurance premium by eliminating the "riders" that are often needed to cover such items.

INSTRUCTIONS: 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 provide [ more | less ] income from savings.

The least expensive method for banks to interact with their customers is through:

The minimum denomination of T-bills is: