Question 1

Certificates of deposit (CDs)tend to pay higher rates of interest than money market accounts because

Accepted Answer

A)  ​CDs are not government insured and therefore are riskier investments than money market accounts. 
B)  ​the required minimum investment for CDs is higher than for money market accounts. 
C)  ​there are higher annual fees charged for CDs than for money market accounts. 
D)  ​the investor agrees to leave his or her money in the CD for a specified period of time while he or she has free access to the funds in a money market account. 
A)  ​CDs are not government insured and therefore are riskier investments than money market accounts. 
B)  ​the required minimum investment for CDs is higher than for money market accounts. 
C)  ​there are higher annual fees charged for CDs than for money market accounts. 
D)  ​the investor agrees to leave his or her money in the CD for a specified period of time while he or she has free access to the funds in a money market account. D

Question 2

Checks you write and present for payment can clear your bank in as little as

Accepted Answer

A)  ​Minutes. 
B)  ​Hours. 
C)  ​One day. 
D)  ​Three days. 
A)  ​Minutes. 
B)  ​Hours. 
C)  ​One day. 
D)  ​Three days. A

Question 3

Which of the following accounts could accurately be called a money market account?

Accepted Answer

A)  ​Share draft account 
B)  ​Asset management account 
C)  ​NOW account 
D)  ​Series EE savings bond 
A)  ​Share draft account 
B)  ​Asset management account 
C)  ​NOW account 
D)  ​Series EE savings bond B

Question 4

A customer who wanted to directly transfer funds from his or her bank account to a retailer's bank account would use a(n)

Accepted Answer

A)  ​automated teller machine. 
B)  ​electronic funds transfer. 
C)  check. 
D)  ​credit card. 
A)  ​automated teller machine. 
B)  ​electronic funds transfer. 
C)  check. 
D)  ​credit card.

Question 5

Checks mailed to the bank for deposit should always be endorsed with a restrictive endorsement.

Accepted Answer

A) True 
 B)False

Question 6

Interest rates on longer-term CDs are usually higher than the comparable rates on shorter-term instruments.

Accepted Answer

A) True 
 B)False

Question 7

Liquidity is the speed and ease with which an asset can be converted to cash.

Accepted Answer

A) True 
 B)False

Question 8

Checks allow you to transfer funds from your account to other people and organizations.

Accepted Answer

A) True 
 B)False

Question 9

Everyone should use an asset management account to simplify their monetary asset management.

Accepted Answer

A) True 
 B)False

Question 10

Cash management focuses primarily on your investment assets.

Accepted Answer

A) True 
 B)False

Question 11

Tom and Mindy want to keep $420,000 in cash equivalents that are federally insured.They could accomplish this by

Accepted Answer

A)  ​investing $170,000 in a money market mutual fund and $250,000 in a federally insured credit union. 
B)  ​dividing it equally into three different joint accounts in the same federally insured bank. 
C)  ​dividing it equally into two different joint accounts in two different federally insured savings banks. 
D)  ​putting $75,000 in two joint accounts in different branches of the same bank. 
A)  ​investing $170,000 in a money market mutual fund and $250,000 in a federally insured credit union. 
B)  ​dividing it equally into three different joint accounts in the same federally insured bank. 
C)  ​dividing it equally into two different joint accounts in two different federally insured savings banks. 
D)  ​putting $75,000 in two joint accounts in different branches of the same bank.

Question 12

Funds on deposit in a savings account are considered time deposits rather than demand deposits.

Accepted Answer

A) True 
 B)False

Question 13

Time deposits specify a period that the savings must be left on deposit,such as six months or three years.

Accepted Answer

A) True 
 B)False

Question 14

Unlike other providers of financial services,depository institutions can both take deposits and make loans to consumers.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following forms is used to notify you of the taxable interest you have earned in a given year from a checking or savings account?

Accepted Answer

A)  ​1099 Form 
B)  ​W-2 Form 
C)  ​1040 Form 
D)  ​W-4 Form 
A)  ​1099 Form 
B)  ​W-2 Form 
C)  ​1040 Form 
D)  ​W-4 Form

Question 16

The Federal Deposit Insurance Corporation (FDIC)insures accounts in

Accepted Answer

A)  ​commercial banks. 
B)  ​credit unions. 
C)  ​brokerage companies. 
D)  ​commercial banks and credit unions. 
A)  ​commercial banks. 
B)  ​credit unions. 
C)  ​brokerage companies. 
D)  ​commercial banks and credit unions.

Question 17

A stock brokerage firm is a licensed financial institution that specializes in selling and buying stocks,bonds,and other investment alternatives.

Accepted Answer

A) True 
 B)False

Question 18

Credit unions with federal charters have their accounts insured through the FDIC.

Accepted Answer

A) True 
 B)False

Question 19

A check with a blank endorsement contains only the payee's signature on the back.

Accepted Answer

A) True 
 B)False

Question 20

It is possible to lose money on a certificate of deposit if the early withdrawal penalty is greater than the interest earned.

Accepted Answer

A) True 
 B)False

Certificates of deposit (CDs)tend to pay higher rates of interest than money market accounts because

Checks you write and present for payment can clear your bank in as little as

Which of the following accounts could accurately be called a money market account?

A customer who wanted to directly transfer funds from his or her bank account to a retailer's bank account would use a(n)

Checks mailed to the bank for deposit should always be endorsed with a restrictive endorsement.

Interest rates on longer-term CDs are usually higher than the comparable rates on shorter-term instruments.

Liquidity is the speed and ease with which an asset can be converted to cash.

Checks allow you to transfer funds from your account to other people and organizations.

Everyone should use an asset management account to simplify their monetary asset management.

Cash management focuses primarily on your investment assets.

Tom and Mindy want to keep $420,000 in cash equivalents that are federally insured.They could accomplish this by

Funds on deposit in a savings account are considered time deposits rather than demand deposits.

Time deposits specify a period that the savings must be left on deposit,such as six months or three years.

Unlike other providers of financial services,depository institutions can both take deposits and make loans to consumers.

Which of the following forms is used to notify you of the taxable interest you have earned in a given year from a checking or savings account?

The Federal Deposit Insurance Corporation (FDIC)insures accounts in

A stock brokerage firm is a licensed financial institution that specializes in selling and buying stocks,bonds,and other investment alternatives.

Credit unions with federal charters have their accounts insured through the FDIC.

A check with a blank endorsement contains only the payee's signature on the back.

It is possible to lose money on a certificate of deposit if the early withdrawal penalty is greater than the interest earned.

Understanding Personal Finance

Career Planning

Financial Statements,tools,and Budgets

Managing Income Taxes

Building and Maintaining Good Credit

Credit Cards and Consumer Loans

Vehicles and Other Major Purchases

Obtaining Affordable Housing

Managing Property and Liability Risk

Managing Health Expenses

Life Insurance Planning

Investment Fundamentals

Investing in Stocks and Bonds

Investing Through Mutual Funds

Real Estate and High-Risk Investments

Retirement Planning

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Exam 5: Managing Checking and Savings Accounts

Certificates of deposit (CDs)tend to pay higher rates of interest than money market accounts because

Checks you write and present for payment can clear your bank in as little as

Which of the following accounts could accurately be called a money market account?

A customer who wanted to directly transfer funds from his or her bank account to a retailer's bank account would use a(n)

Checks mailed to the bank for deposit should always be endorsed with a restrictive endorsement.

Interest rates on longer-term CDs are usually higher than the comparable rates on shorter-term instruments.

Liquidity is the speed and ease with which an asset can be converted to cash.

Checks allow you to transfer funds from your account to other people and organizations.

Everyone should use an asset management account to simplify their monetary asset management.

Cash management focuses primarily on your investment assets.

Tom and Mindy want to keep $420,000 in cash equivalents that are federally insured.They could accomplish this by

Funds on deposit in a savings account are considered time deposits rather than demand deposits.

Time deposits specify a period that the savings must be left on deposit,such as six months or three years.

Unlike other providers of financial services,depository institutions can both take deposits and make loans to consumers.

Which of the following forms is used to notify you of the taxable interest you have earned in a given year from a checking or savings account?

The Federal Deposit Insurance Corporation (FDIC)insures accounts in

A stock brokerage firm is a licensed financial institution that specializes in selling and buying stocks,bonds,and other investment alternatives.

Credit unions with federal charters have their accounts insured through the FDIC.

A check with a blank endorsement contains only the payee's signature on the back.

It is possible to lose money on a certificate of deposit if the early withdrawal penalty is greater than the interest earned.

Understanding Personal Finance

Career Planning

Financial Statements,tools,and Budgets

Managing Income Taxes

Building and Maintaining Good Credit

Credit Cards and Consumer Loans

Vehicles and Other Major Purchases

Obtaining Affordable Housing

Managing Property and Liability Risk

Managing Health Expenses

Life Insurance Planning

Investment Fundamentals

Investing in Stocks and Bonds

Investing Through Mutual Funds

Real Estate and High-Risk Investments

Retirement Planning

Filters