Question 1

What are the main types of financial institutions used by consumers?

Accepted Answer

The major types of financial institution...

Question 2

A debit card deducts the amount of purchases from your checking account by:

Accepted Answer

A)  transferring money electronically.
B)  obtaining a discount on consumer purchases.
C)  making credit card purchases.
D)   quickly obtaining a cash loan.
E)  making investments with an investment company.F) D) and E)
G) None of the above

Question 3

The Federal Deposit Insurance Corporation insures deposits up to $250,000 per person per financial institution.Suzanne has $200,000 in an individual account and $424,000 in a joint account with her husband,Ted.How much of Suzanne's money is notcovered by FDIC insurance?

Accepted Answer

A)  $162,000
B)  $174,000
C)  $374,000
D)  $50,000
E)  $0F) A) and E)
G) A) and C)

Question 4

Brad Kellogg maintains a monthly balance in his checking account of approximately $150,writes about 25 checks a month,and makes three deposits each month.How would Brad decide which one of the following checking accounts he should use?

Accepted Answer

Bank A: regular checking account with a ...

Question 5

A $200 savings account that earns $13 interest in a year has a yield of _______ percent.

Accepted Answer

A)  6.00
B)  13.00
C)  7.50
D)  11.25
E)  6.50F) B) and C)
G) A) and E)

Question 6

David Wynn gets an auto loan from his credit union for $10,000.David will make monthly payments over the next four years to repay the loan.What type of financial service is David using?

Accepted Answer

A)  Payment service
B)  Savings service
C)  Credit service
D)  Trust service
E)  Asset managementF) A) and D)
G) A) and E)

Question 7

Nate Rogers deposited $5,000 in a 3-year bank certificate of deposit which pays six percent interest.What type of financial service is Nate using?

Accepted Answer

A)  Payment service
B)  Savings service
C)  Borrowing service
D)  Trust service
E)  Budget counselingF) A) and B)
G) B) and E)

Question 8

A certificate of deposit is also known as a demand deposit.

Accepted Answer

A) True 
 B)False

Question 9

When preparing a bank reconciliation,outstanding checks should be:

Accepted Answer

A)  added to the bank statement balance.
B)  subtracted from the bank statement balance.
C)  added to the checkbook balance.
D)  subtracted from the checkbook balance.
E)  ignored until they have cleared.F) A) and E)
G) B) and E)

Question 10

Joan Zemke expects interest rates to decline over the next few months.To maximize her long-term earnings she should use a:

Accepted Answer

A)  regular savings account.
B)  interest-bearing checking account.
C)  five-year certificate of deposit.
D)  money market account.
E)  money market fund.F) B) and C)
G) C) and E)

Question 11

A _______ endorsement is especially useful when you are depositing checks.

Accepted Answer

A)  blank
B)  restrictive
C)  common
D)  special
E)  documentedF) B) and E)
G) A) and B)

Question 12

The rate of return on a savings account is also referred to as:

Accepted Answer

A)  liquidity.
B)  compounding.
C)  yield.
D)  opportunity cost.
E)  asset turnover.F) A) and E)
G) A) and B)

Question 13

An estimated _____ people in the U.S.are "unbanked",using a variety of alternative services rather than having a bank account.

Accepted Answer

A)  1 million
B)  6 million
C)  12 million
D)  17 million
E)  25 millionF) A) and B)
G) A) and C)

Question 14

Which of the following statements regarding debit and credit card liability is correct?

Accepted Answer

A)  A credit card carries more risk of loss to the cardholder.
B)  A debit card carries more risk of loss to the cardholder.
C)  There is no cardholder liability if either type of card is lost.
D)  The Federal Government insures losses on credit but not debit cards.
E)  The Federal Government insures losses on debit but not credit cards.F) A) and B)
G) C) and D)

Question 15

An all-purpose account offered by investment brokers that provides several services is a:

Accepted Answer

A)  NOW account.
B)  asset management account.
C)  EFT account.
D)  mutual fund.
E)  money market account.F) B) and C)
G) B) and E)

Question 16

Comparison of earnings for different savings plans can best be accomplished using the:

Accepted Answer

A)  discounted present value.
B)  compounded rate of return.
C)  net present value.
D)  annual percentage yield.
E)  after-tax rate of return.F) D) and E)
G) C) and E)

Question 17

A " no-fee" checking account that requires a non-interest-earning minimum balance of $500 has an opportunity cost of lost interest earnings.

Accepted Answer

A) True 
 B)False

Question 18

This type of financial institution is known to frequently offer lower fees and lower loan rates:

Accepted Answer

A)  Commercial bank
B)  Savings and loans association
C)  Mutual savings bank
D)  Credit union
E)  Investment companiesF) A) and B)
G) C) and E)

Question 19

Which of the following is a user-owned,nonprofit,cooperative financial institution?

Accepted Answer

A)  Life insurance company
B)  Investment company
C)  Mortgage company
D)  Pawnshop
E)  Credit unionF) D) and E)
G) A) and B)

Question 20

Which of the following types of financial institutions provide Federal Deposit Insurance coverage?

Accepted Answer

A)  Credit card companies and finance companies
B)  Credit unions and brokerage firms
C)  Mortgage companies, commercial banks, and credit unions
D)  Commercial banks, credit unions, and savings and loans
E)  Commercial banks, credit card companies, and credit unionsF) All of the above
G) A) and B)

Exam 5: Financial Services: Savings Plans and Payment Accounts

What are the main types of financial institutions used by consumers?

Correct AnswerverifiedThe major types of financial institution...View AnswerShow Answer

Brad Kellogg maintains a monthly balance in his checking account of approximately $150,writes about 25 checks a month,and makes three deposits each month.How would Brad decide which one of the following checking accounts he should use?

Correct AnswerverifiedBank A: regular checking account with a ...View AnswerShow Answer

Joan Zemke expects interest rates to decline over the next few months.To maximize her long-term earnings she should use a:

Correct AnswerverifiedShow Answer

Which of the following statements regarding debit and credit card liability is correct?

Correct AnswerverifiedShow Answer

A " no-fee" checking account that requires a non-interest-earning minimum balance of $500 has an opportunity cost of lost interest earnings.

Correct AnswerverifiedShow Answer

A debit card deducts the amount of purchases from your checking account by:

Correct AnswerverifiedShow Answer

The rate of return on a savings account is also referred to as:

Correct AnswerverifiedShow Answer

A certificate of deposit is also known as a demand deposit.

Correct AnswerverifiedShow Answer

Comparison of earnings for different savings plans can best be accomplished using the:

Correct AnswerverifiedShow Answer

David Wynn gets an auto loan from his credit union for $10,000.David will make monthly payments over the next four years to repay the loan.What type of financial service is David using?

Correct AnswerverifiedShow Answer

Which of the following types of financial institutions provide Federal Deposit Insurance coverage?

Correct AnswerverifiedShow Answer

When preparing a bank reconciliation,outstanding checks should be:

Correct AnswerverifiedShow Answer

Nate Rogers deposited $5,000 in a 3-year bank certificate of deposit which pays six percent interest.What type of financial service is Nate using?

Correct AnswerverifiedShow Answer

An all-purpose account offered by investment brokers that provides several services is a:

Correct AnswerverifiedShow Answer

The Federal Deposit Insurance Corporation insures deposits up to $250,000 per person per financial institution.Suzanne has $200,000 in an individual account and $424,000 in a joint account with her husband,Ted.How much of Suzanne's money is notcovered by FDIC insurance?

Correct AnswerverifiedShow Answer

An estimated _____ people in the U.S.are "unbanked",using a variety of alternative services rather than having a bank account.

Correct AnswerverifiedShow Answer

A _______ endorsement is especially useful when you are depositing checks.

Correct AnswerverifiedShow Answer

Which of the following is a user-owned,nonprofit,cooperative financial institution?

Correct AnswerverifiedShow Answer

A $200 savings account that earns $13 interest in a year has a yield of _______ percent.

Correct AnswerverifiedShow Answer

This type of financial institution is known to frequently offer lower fees and lower loan rates:

Correct AnswerverifiedShow Answer

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The major types of financial institution...
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Bank A: regular checking account with a ...
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