Question 1

The rate on new issues of U.S.Series EE savings bond five years is set at 90% of rate on 5-year Treasury securities.

Accepted Answer

A) True 
 B)False  True

Question 2

Some financial institutions offer continuous compounding.This means that

Accepted Answer

A) your effective yield will be about 20% higher than daily compounding. 
B) your effective yield will be only slightly higher than daily compounding. 
C) in reality they are offering only simple interest. 
D) you must deposit at least $10,000 to open an account offering this feature. 
A) your effective yield will be about 20% higher than daily compounding. 
B) your effective yield will be only slightly higher than daily compounding. 
C) in reality they are offering only simple interest. 
D) you must deposit at least $10,000 to open an account offering this feature. B

Question 3

Money market mutual funds are special accounts offered by commercial banks and S&Ls.

Accepted Answer

A) True 
 B)False  False

Question 4

A gift card may expire after a period of nonuse.

Accepted Answer

A) True 
 B)False

Question 5

Agnes has a checking account and she has just received her March bank statement that shows an ending balance of $250.Agnes' records indicate an ending balance of $220.In looking over the data you notice that two checks Agnes wrote totaling $75 had not yet cleared the bank,while a deposit for $40 that she mailed had not been received by the bank.There also was a $5 bank service charge.To adjust her records,Agnes should

Accepted Answer

A) reduce her book balance by $5. 
B) increase the bank balance by $40. 
C) call the bank and tell them that their balance is incorrect. 
D) do nothing,everything seems in good order. 
A) reduce her book balance by $5. 
B) increase the bank balance by $40. 
C) call the bank and tell them that their balance is incorrect. 
D) do nothing,everything seems in good order.

Question 6

Banks must return your original checks on demand for a small fee.

Accepted Answer

A) True 
 B)False

Question 7

A money market deposit account limits both deposits and withdrawals during a month.

Accepted Answer

A) True 
 B)False

Question 8

Holding cash in a temporary "parking place" is associated with which cash motive?

Accepted Answer

A) Undertaking transactions 
B) Holding an emergency reserve 
C) Holding a short-term store of value 
D) Paying off credit 
A) Undertaking transactions 
B) Holding an emergency reserve 
C) Holding a short-term store of value 
D) Paying off credit

Question 9

Cash serves as a relative liquid short-term store of value.

Accepted Answer

A) True 
 B)False

Question 10

Many financial planners recommend that you hold emergency reserve assets equal to ________ months of after-tax income.

Accepted Answer

A) 3-6 
B) 5-7 
C) 7-12 
D) 12-15 
A) 3-6 
B) 5-7 
C) 7-12 
D) 12-15

Question 11

The principle objective in cash management is to minimize your cash balances while maintaining adequate liquidity.

Accepted Answer

A) True 
 B)False

Question 12

You read that a savings account offers a 10% yield,compounded semi-annually.Your effective annual yield then is

Accepted Answer

A) 10.25%. 
B) 11.00%. 
C) 9.75%. 
D) 5.05%. 
A) 10.25%. 
B) 11.00%. 
C) 9.75%. 
D) 5.05%.

Question 13

To minimize legal problems in the event a spousal death,many people open their checking accounts as tenants in common.

Accepted Answer

A) True 
 B)False

Question 14

Federal deposit insurance insures each deposit you have with a bank up to $100,000.

Accepted Answer

A) True 
 B)False

Question 15

If you discover that someone has stolen your checks,you should

Accepted Answer

A) issue an immediate stop payment for each check. 
B) purchase account insurance to avoid potential losses. 
C) inform the bank and open a new account. 
D) do nothing. 
A) issue an immediate stop payment for each check. 
B) purchase account insurance to avoid potential losses. 
C) inform the bank and open a new account. 
D) do nothing.

Question 16

You deposit $1,000 in an account offering an 8% yield,compounded semi-annually.At the end of one year,your total earned interest is

Accepted Answer

A) $40.00. 
B) $40.80. 
C) $80.00. 
D) $81.60. 
A) $40.00. 
B) $40.80. 
C) $80.00. 
D) $81.60.

Question 17

In devising a cash management strategy,you should assume that future interest rates

Accepted Answer

A) will likely be volatile,but accurately forecasted. 
B) are not likely to change from the levels of present rates. 
C) will likely be volatile,and difficult to forecast. 
D) will occur in some random fashion. 
A) will likely be volatile,but accurately forecasted. 
B) are not likely to change from the levels of present rates. 
C) will likely be volatile,and difficult to forecast. 
D) will occur in some random fashion.

Question 18

The more frequently compounding takes place,the lower the effective return on a savings account.

Accepted Answer

A) True 
 B)False

Question 19

Money market mutual funds are best described as institutions that

Accepted Answer

A) invest only in MMDAs. 
B) pool resources of many investors to purchase liquid and high-yielding securities. 
C) issued by the Treasury,commercial banks,and other corporations. 
D) combine short-term securities with long-term securities. 
E) are established by banks and other financial institutions to help depositors manage their liquid assets. 
A) invest only in MMDAs. 
B) pool resources of many investors to purchase liquid and high-yielding securities. 
C) issued by the Treasury,commercial banks,and other corporations. 
D) combine short-term securities with long-term securities. 
E) are established by banks and other financial institutions to help depositors manage their liquid assets.

Question 20

Series I bonds grow at a composite rate that includes a fixed rate and the inflation rate.

Accepted Answer

A) True 
 B)False

The rate on new issues of U.S.Series EE savings bond five years is set at 90% of rate on 5-year Treasury securities.

Some financial institutions offer continuous compounding.This means that

Money market mutual funds are special accounts offered by commercial banks and S&Ls.

A gift card may expire after a period of nonuse.

Banks must return your original checks on demand for a small fee.

A money market deposit account limits both deposits and withdrawals during a month.

Holding cash in a temporary "parking place" is associated with which cash motive?

Cash serves as a relative liquid short-term store of value.

Many financial planners recommend that you hold emergency reserve assets equal to ________ months of after-tax income.

The principle objective in cash management is to minimize your cash balances while maintaining adequate liquidity.

You read that a savings account offers a 10% yield,compounded semi-annually.Your effective annual yield then is

To minimize legal problems in the event a spousal death,many people open their checking accounts as tenants in common.

Federal deposit insurance insures each deposit you have with a bank up to $100,000.

If you discover that someone has stolen your checks,you should

You deposit $1,000 in an account offering an 8% yield,compounded semi-annually.At the end of one year,your total earned interest is

In devising a cash management strategy,you should assume that future interest rates

The more frequently compounding takes place,the lower the effective return on a savings account.

Money market mutual funds are best described as institutions that

Series I bonds grow at a composite rate that includes a fixed rate and the inflation rate.

Financial Planning: Why Its Important to You

The Time Value of Money: All Dollars Are Not Created Equal

Financial Statement and Budgets: Where Are You Now and Where Are You Going

Taxes: the Governments Share of Your Rewards

Short-Term Credit Management: Consumer Credit

Consumer Durables: the Personal Auto

Housing: the Cost of Shelter

Financial Markets and Instruments: Learning the Investment Environment

Investment Basics: Understanding Risk and Return

Stocks and Bonds: Your Most Common Investments

Mutual Fundsother Pooling Arrangements: Simplifying, Maybe Improving Investment Performance

Property and Liability Insurance: Protecting Your Lifestyle Assets

Health Care and Disability Insurance: Protecting Your Earning Capacity

Life Insurance and Estate Planning: Protecting Your Dependents

Retirement Planning: Planning for Your Long-Term Needs

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Exam 5: Liquidity Management: Managing Current Assets and Current Liabilities

The rate on new issues of U.S.Series EE savings bond five years is set at 90% of rate on 5-year Treasury securities.

Some financial institutions offer continuous compounding.This means that

Money market mutual funds are special accounts offered by commercial banks and S&Ls.

A gift card may expire after a period of nonuse.

Banks must return your original checks on demand for a small fee.

A money market deposit account limits both deposits and withdrawals during a month.

Holding cash in a temporary "parking place" is associated with which cash motive?

Cash serves as a relative liquid short-term store of value.

Many financial planners recommend that you hold emergency reserve assets equal to ________ months of after-tax income.

The principle objective in cash management is to minimize your cash balances while maintaining adequate liquidity.

You read that a savings account offers a 10% yield,compounded semi-annually.Your effective annual yield then is

To minimize legal problems in the event a spousal death,many people open their checking accounts as tenants in common.

Federal deposit insurance insures each deposit you have with a bank up to $100,000.

If you discover that someone has stolen your checks,you should

You deposit $1,000 in an account offering an 8% yield,compounded semi-annually.At the end of one year,your total earned interest is

In devising a cash management strategy,you should assume that future interest rates

The more frequently compounding takes place,the lower the effective return on a savings account.

Money market mutual funds are best described as institutions that

Series I bonds grow at a composite rate that includes a fixed rate and the inflation rate.

Financial Planning: Why Its Important to You

The Time Value of Money: All Dollars Are Not Created Equal

Financial Statement and Budgets: Where Are You Now and Where Are You Going

Taxes: the Governments Share of Your Rewards

Short-Term Credit Management: Consumer Credit

Consumer Durables: the Personal Auto

Housing: the Cost of Shelter

Financial Markets and Instruments: Learning the Investment Environment

Investment Basics: Understanding Risk and Return

Stocks and Bonds: Your Most Common Investments

Mutual Fundsother Pooling Arrangements: Simplifying, Maybe Improving Investment Performance

Property and Liability Insurance: Protecting Your Lifestyle Assets

Health Care and Disability Insurance: Protecting Your Earning Capacity

Life Insurance and Estate Planning: Protecting Your Dependents

Retirement Planning: Planning for Your Long-Term Needs

Filters