Question 1

If the Federal Reserve buys or sells Treasury securities to affect the money supply,it uses

Accepted Answer

A) open market operations. 
B) reserves at commercial banks. 
C) discount rate adjustments. 
D) federal funds adjustments. 
A) open market operations. 
B) reserves at commercial banks. 
C) discount rate adjustments. 
D) federal funds adjustments. A

Question 2

Nondepository institutions are financial institutions that provide various financial services,but their deposits are not federally insured.

Accepted Answer

A) True 
 B)False  True

Question 3

Describe four factors you should consider when choosing a financial institution.

Accepted Answer

Several answers are acceptable here such as a debit card,no service fee,ATM card,credit card,location,free checks,interest rate offered,and interest rate charged on loans.

Question 4

The ________ is the return that is guaranteed on an investment for a specified period of time.

Accepted Answer

The answer of The ________ is the return that is...

Question 5

Credit unions are nonprofit depository institutions that serve members who have a common affiliation (such as the same employer or same community).

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is not a disadvantage of using ATM cards?

Accepted Answer

A) Forgetting to record the transaction 
B) Fees from your bank and other banks for using out-of-network machines 
C) Increased fees if you make too many transactions per period 
D) Difficulty of withdrawing funds 
A) Forgetting to record the transaction 
B) Fees from your bank and other banks for using out-of-network machines 
C) Increased fees if you make too many transactions per period 
D) Difficulty of withdrawing funds

Question 7

________ are nondepository institutions that sell shares to individuals and use the proceeds to invest in securities to create mutual funds.

Accepted Answer

A) Investment companies 
B) Finance companies 
C) Securities firms 
D) Insurance companies 
A) Investment companies 
B) Finance companies 
C) Securities firms 
D) Insurance companies

Question 8

To join a credit union,you need to

Accepted Answer

A) have a steady job. 
B) be a member of a group with a common bond. 
C) have established good credit. 
D) be sponsored by an existing member of that credit union. 
A) have a steady job. 
B) be a member of a group with a common bond. 
C) have established good credit. 
D) be sponsored by an existing member of that credit union.

Question 9

Depository institutions are financial institutions that accept deposits (that are insured up to a maximum level)from individuals or firms and provide loans.

Accepted Answer

A) True 
 B)False

Question 10

Juan has $1,000 that he would like to invest in a CD.His bank offers two alternatives,i.e.,a one-year CD paying 6 percent or a two-year CD paying 9 percent.Juan has been reading that interest rates are rising and,based on his research,he estimates that by year-end the rate on one-year CDs will increase to 10 percent.What alternative would give Juan the most interest and what would the total interest be?
(a)Two one-year CDs returning $120 interest
(b)Two one-year CDs returning $160 interest
(c)One two-year CD returning $180 interest
(d)One two-year CD returning $1,900 interest

Accepted Answer

(c)Two one-year CDs at 6 and 1

Question 11

The monetary policy of the Federal Reserve System (The Fed)has very little to do with the changes in interest rates a consumer will experience.

Accepted Answer

A) True 
 B)False

Question 12

An example of a depository financial institution is an insurance company.

Accepted Answer

A) True 
 B)False

Question 13

A certificate of deposit guarantees or locks in an interest rate for a specified time and rate.

Accepted Answer

A) True 
 B)False

Question 14

Financial institutions that accept deposits (that are insured up to a maximum level)from individuals and provide loans are called

Accepted Answer

A) finance companies. 
B) depository institutions. 
C) investment companies. 
D) nondepository institutions. 
A) finance companies. 
B) depository institutions. 
C) investment companies. 
D) nondepository institutions.

Question 15

Bank fees for use of an Automatic Teller Machine (ATM)are not usually a large consideration in choosing a bank with which to do business.

Accepted Answer

A) True 
 B)False

Question 16

To prevent an overdraft or "bounced check," it is always a good idea to record your check written in your check register and reconcile your account balance when you receive your monthly bank statement.

Accepted Answer

A) True 
 B)False

Question 17

You are closing on the purchase of a new home and your closing costs including down payment are $10,500.To process the loan and be assured of funding,the title company would request your payment as a

Accepted Answer

A) personal check. 
B) money order. 
C) cashier's check. 
D) traveler's check. 
A) personal check. 
B) money order. 
C) cashier's check. 
D) traveler's check.

Question 18

A debit card differs from a credit card in that it does not provide credit; instead,it deducts the purchase from your checking account immediately.

Accepted Answer

A) True 
 B)False

Question 19

Finance companies are more selective in choosing the lender they serve,and therefore usually charge lower interest rates than banks or credit unions.

Accepted Answer

A) True 
 B)False

Question 20

In saving or investing,the ________ the risk,the ________ the return.

Accepted Answer

A) higher; higher 
B) lower; lower 
C) higher; lower 
D) A and B 
A) higher; higher 
B) lower; lower 
C) higher; lower 
D) A and B

If the Federal Reserve buys or sells Treasury securities to affect the money supply,it uses

Nondepository institutions are financial institutions that provide various financial services,but their deposits are not federally insured.

Describe four factors you should consider when choosing a financial institution.

The ________ is the return that is guaranteed on an investment for a specified period of time.

Credit unions are nonprofit depository institutions that serve members who have a common affiliation (such as the same employer or same community).

Which of the following is not a disadvantage of using ATM cards?

________ are nondepository institutions that sell shares to individuals and use the proceeds to invest in securities to create mutual funds.

To join a credit union,you need to

Depository institutions are financial institutions that accept deposits (that are insured up to a maximum level)from individuals or firms and provide loans.

The monetary policy of the Federal Reserve System (The Fed)has very little to do with the changes in interest rates a consumer will experience.

An example of a depository financial institution is an insurance company.

A certificate of deposit guarantees or locks in an interest rate for a specified time and rate.

Financial institutions that accept deposits (that are insured up to a maximum level)from individuals and provide loans are called

Bank fees for use of an Automatic Teller Machine (ATM)are not usually a large consideration in choosing a bank with which to do business.

To prevent an overdraft or "bounced check," it is always a good idea to record your check written in your check register and reconcile your account balance when you receive your monthly bank statement.

You are closing on the purchase of a new home and your closing costs including down payment are $10,500.To process the loan and be assured of funding,the title company would request your payment as a

A debit card differs from a credit card in that it does not provide credit; instead,it deducts the purchase from your checking account immediately.

Finance companies are more selective in choosing the lender they serve,and therefore usually charge lower interest rates than banks or credit unions.

In saving or investing,the the risk,the the return.

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Managing Your Money

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

Filters

Exam 5: Banking and Interest Rates

If the Federal Reserve buys or sells Treasury securities to affect the money supply,it uses

Nondepository institutions are financial institutions that provide various financial services,but their deposits are not federally insured.

Describe four factors you should consider when choosing a financial institution.

The ________ is the return that is guaranteed on an investment for a specified period of time.

Credit unions are nonprofit depository institutions that serve members who have a common affiliation (such as the same employer or same community).

Which of the following is not a disadvantage of using ATM cards?

________ are nondepository institutions that sell shares to individuals and use the proceeds to invest in securities to create mutual funds.

To join a credit union,you need to

Depository institutions are financial institutions that accept deposits (that are insured up to a maximum level)from individuals or firms and provide loans.

The monetary policy of the Federal Reserve System (The Fed)has very little to do with the changes in interest rates a consumer will experience.

An example of a depository financial institution is an insurance company.

A certificate of deposit guarantees or locks in an interest rate for a specified time and rate.

Financial institutions that accept deposits (that are insured up to a maximum level)from individuals and provide loans are called

Bank fees for use of an Automatic Teller Machine (ATM)are not usually a large consideration in choosing a bank with which to do business.

To prevent an overdraft or "bounced check," it is always a good idea to record your check written in your check register and reconcile your account balance when you receive your monthly bank statement.

You are closing on the purchase of a new home and your closing costs including down payment are $10,500.To process the loan and be assured of funding,the title company would request your payment as a

A debit card differs from a credit card in that it does not provide credit; instead,it deducts the purchase from your checking account immediately.

Finance companies are more selective in choosing the lender they serve,and therefore usually charge lower interest rates than banks or credit unions.

In saving or investing,the ________ the risk,the ________ the return.

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Managing Your Money

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

Filters

In saving or investing,the the risk,the the return.