Question 1

Which of the following is true about a NOW account?

Accepted Answer

A) Pays no interest 
B) Not as liquid as a traditional checking account 
C) No minimum balance is required 
D) Is not an insured account 
A) Pays no interest 
B) Not as liquid as a traditional checking account 
C) No minimum balance is required 
D) Is not an insured account B

Question 2

Which of the following is not true of a NOW account?

Accepted Answer

A) Offered by depository institutions 
B) Pays relatively low interest 
C) Only three checks per month can be written 
D) Requires a minimum balance 
A) Offered by depository institutions 
B) Pays relatively low interest 
C) Only three checks per month can be written 
D) Requires a minimum balance C

Question 3

All of the following are true of money market deposit accounts (MMDA)except

Accepted Answer

A) a minimum balance is required. 
B) the account pays higher interest. 
C) a limited number of checks may be written monthly. 
D) they are the same regardless of the depository institution offering them. 
A) a minimum balance is required. 
B) the account pays higher interest. 
C) a limited number of checks may be written monthly. 
D) they are the same regardless of the depository institution offering them. D

Question 4

Which of the following is not true regarding a money market deposit account (MMDA)?

Accepted Answer

A) A minimum balance is required 
B) It has a maturity date 
C) The account pays interest 
D) A limited number of checks may be written monthly 
A) A minimum balance is required 
B) It has a maturity date 
C) The account pays interest 
D) A limited number of checks may be written monthly

Question 5

________ risk is the risk that a borrower may not repay on a timely basis.

Accepted Answer

A) Credit 
B) Interest rate 
C) Liquidity 
D) Asset 
A) Credit 
B) Interest rate 
C) Liquidity 
D) Asset

Question 6

Describe your short-term investments and how they affect your personal budget,income statement,and balance sheet in terms of return and liquidity.

Accepted Answer

This is a subjective answer.A checking a

Question 7

Money market funds (MMF)have all of the following characteristics except

Accepted Answer

A) pooled money provided by individuals to invest. 
B) unlimited check writing. 
C) short-term maturity. 
D) a minimum investment amount. 
A) pooled money provided by individuals to invest. 
B) unlimited check writing. 
C) short-term maturity. 
D) a minimum investment amount.

Question 8

If you buy a $10,000 par value T-bill with a 180-day maturity date for $9,750,what will be your return?

Accepted Answer

A) 2)5% 
B) 3)06% 
C) 4)5% 
D) 5)2% 
A) 2)5% 
B) 3)06% 
C) 4)5% 
D) 5)2%

Question 9

For relatively safe investments such as savings accounts,CDs,MMDAs,and T-bills,liquidity is rarely a concern.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is not true regarding a savings account?

Accepted Answer

A) It does not provide checking services 
B) It is less liquid than a checking account 
C) It pays lower interest than a checking account 
D) It is less convenient than a checking account 
A) It does not provide checking services 
B) It is less liquid than a checking account 
C) It pays lower interest than a checking account 
D) It is less convenient than a checking account

Question 11

Treasury bills are more liquid than CDs because there is a secondary market for T-bills.

Accepted Answer

A) True 
 B)False

Question 12

If a $10,000 T-bill is purchased for $9,600 and matures in 270 days,what will be the annualized return? (Round to the nearest one hundredth of a percent.)
(a)4 percent
(b)4.17 percent
(c)5.63 percent
(d)2.85 percent

Accepted Answer

(c)($10,00

Question 13

An asset management account combines

Accepted Answer

A) assets and expenses. 
B) deposit accounts with a brokerage account. 
C) a savings account with a brokerage account. 
D) a savings account with long-term investments. 
A) assets and expenses. 
B) deposit accounts with a brokerage account. 
C) a savings account with a brokerage account. 
D) a savings account with long-term investments.

Question 14

Which of the following is not true about a certificate of deposit (CD)?

Accepted Answer

A) They pay higher interest than T-bills. 
B) They are long-term investments of two years or more. 
C) Funds are locked in for specific periods of time. 
D) A penalty is imposed for early withdrawal. 
A) They pay higher interest than T-bills. 
B) They are long-term investments of two years or more. 
C) Funds are locked in for specific periods of time. 
D) A penalty is imposed for early withdrawal.

Question 15

Your ability to cover any short-term cash deficiencies is called

Accepted Answer

A) solvency. 
B) wealth. 
C) liquidity. 
D) cash planning. 
A) solvency. 
B) wealth. 
C) liquidity. 
D) cash planning.

Question 16

Your ability to cover short-term cash deficiencies is a measure of your ________.

Accepted Answer

The answer of Your ability to cover short-term cash deficiencies...

Question 17

Treasury securities are T-bills with a maturity of one year or less.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following accounts would tend to give you the higher interest combined with ease of access to your funds on a limited basis?

Accepted Answer

A) Checking account 
B) MMDA 
C) NOW account 
D) CD 
A) Checking account 
B) MMDA 
C) NOW account 
D) CD

Question 19

An asset management account does all of the following except

Accepted Answer

A) combines deposit accounts with a brokerage account that is used to buy or sell stocks. 
B) provides a single consolidated statement showing the ending balance and activity of all accounts. 
C) requires a small initial investment to start. 
D) sweeps any unused balance in the checking account into a money market account at the end of the day. 
A) combines deposit accounts with a brokerage account that is used to buy or sell stocks. 
B) provides a single consolidated statement showing the ending balance and activity of all accounts. 
C) requires a small initial investment to start. 
D) sweeps any unused balance in the checking account into a money market account at the end of the day.

Question 20

What would be the annualized return to an investor who purchases a one-year $10,000 T-bill for $9,600 and sells it on the secondary market 90 days after the purchase for $9,750? (Round to the nearest one hundredth of a percent.)
(a)3.5 percent
(b)6.34 percent
(c)10.14 percent
(d)16.22 percent

Accepted Answer

(b)($9,750

Exam 6: Managing Your Money

Which of the following is true about a NOW account?

Which of the following is not true of a NOW account?

All of the following are true of money market deposit accounts (MMDA)except

Which of the following is not true regarding a money market deposit account (MMDA)?

________ risk is the risk that a borrower may not repay on a timely basis.

Describe your short-term investments and how they affect your personal budget,income statement,and balance sheet in terms of return and liquidity.

Money market funds (MMF)have all of the following characteristics except

If you buy a $10,000 par value T-bill with a 180-day maturity date for $9,750,what will be your return?

For relatively safe investments such as savings accounts,CDs,MMDAs,and T-bills,liquidity is rarely a concern.

Which of the following is not true regarding a savings account?

Treasury bills are more liquid than CDs because there is a secondary market for T-bills.

If a $10,000 T-bill is purchased for $9,600 and matures in 270 days,what will be the annualized return? (Round to the nearest one hundredth of a percent.) (a)4 percent (b)4.17 percent (c)5.63 percent (d)2.85 percent

An asset management account combines

Which of the following is not true about a certificate of deposit (CD)?

Your ability to cover any short-term cash deficiencies is called

Your ability to cover short-term cash deficiencies is a measure of your ________.

Treasury securities are T-bills with a maturity of one year or less.

Which of the following accounts would tend to give you the higher interest combined with ease of access to your funds on a limited basis?

An asset management account does all of the following except

What would be the annualized return to an investor who purchases a one-year $10,000 T-bill for $9,600 and sells it on the secondary market 90 days after the purchase for $9,750? (Round to the nearest one hundredth of a percent.) (a)3.5 percent (b)6.34 percent (c)10.14 percent (d)16.22 percent

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Assessing and Securing Your Credit

Managing Your Credit

Personal Loans

Purchasing and Financing a Home

Auto and Homeowners Insurance

Health and Disability Insurance

Life Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

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