Exam 12: Managing and Pricing Deposit Services

A financial institution that charges its customers based on the number of services they use and grants lower deposit fees or waives some fees for a customer that purchases two or more services is practicing:

Research suggests that _________ -income consumers appear to be more influenced by the size of the financial institution.

From an analysis on its deposits,a bank determines that account processing and other operating expenses cost the bank $4.45 per month.The bank has also determined that non-operating expenses on its deposits are $1.15 per month.It has also decided that it wants a profit of $0.45 on its deposits.What monthly fee should the bank charge on its deposit accounts?

________________ is a process where merchants and utility companies take the information from a check an individual has just written,and electronically debit the individual's account instead of sending the check through the regular check clearing process.

Which of these Acts is attempting to address the low savings rate of workers in the U.S.by including an automatic enrollment ("default option")in employees' retirement accounts?

According to the text,no-fee savings accounts are on the decline.

__________ CDs allow depositors to switch to a higher interest rate if market interest rates rise.

A bank has full control over its deposit prices in the long run.

The formula-operating expense per unit of deposit service plus estimated overhead expense plus planned profit from each deposit service unit sold-reflects which of the deposit pricing method listed below?

The depository institutions which tend to have the highest deposit yields are credit unions.

Urban markets are more responsive to deposit interest rates and fees than rural markets.

_________________________ are designed to attract funds from customers who wish to set aside money in anticipation of future expenditures or financial emergencies.

Due to the fact that they may be perceived as more risky,________________ banks generally offer higher deposit rates than traditional brick and mortar banks.

The _________________________ Act was passed in 1991 and specifies the information that institutions must disclose to their customers about deposit accounts.

The _______________,which was created under Tax Relief Act of 1997,allows individuals to make non-tax-deductible contributions to a retirement fund that can grow tax free and also pay no taxes on their investment earnings when withdrawn.

A checking account price schedule that charges a fixed charge per check,or per period,or both is called:

From an analysis on its deposits,a bank determines that account processing and other operating expenses cost the bank $3.95 per month.It has also determined that non-operating expenses on its deposits are $1.35 per month.The bank wants to have a profit margin which is 10 percent of monthly costs.What monthly fee should the bank charge on its deposit accounts?

_____________________ permits a customer to preauthorize a depository institution to move funds from a savings account to a transaction account in order to cover overdrafts.

According to recent studies cited in this chapter,the number one factor that households consider in selecting a bank to hold their checking account is low fees and low minimum balance.

The deposit pricing method that favors large-denomination deposits because services are free if the deposit account balance stays above some minimum figure is called: