Exam 5: Banking Services and Managing Your Money

Institutions that facilitate the purchase or sale of securities by firms or individuals by providing investment banking services and brokerage services are called

Rashid's monthly expenses are $4000 and he expects that his cash flow will always be sufficient to cover his expenses. How much should he ideally have in his emergency fund?

Which of the following would be least important in selecting a financial institution?

A 180-day GIC pays interest at 6.5 percent. How much interest will you earn on $5000 if you hold it to maturity?

Which of the following financial institutions specializes in making personal loans to people who are perceived to have a higher risk of default?

ABM cards are declining in use because they are expensive and the machines are becoming more difficult to locate.

If you were taking out a personal loan, the highest rate would probably be charged by a

You are charged for writing an NSF cheque; the person you made the cheque payable to is not.

Certified cheques, money orders, and traveller's cheques are secured cheque alternatives to a personal cheque and therefore are more risk-free for the payee.

Which of the following is the better banking option for someone who keeps an average balance of $1000, needs liquidity and does ten transactions per month?

Convenience, deposit rates and insurance, and fees are the primary considerations in choosing a financial institution for your needs.

Overdraft protection allows a bank customer to write a cheque without sufficient funds in the account.

Discuss interest rates in general in Canada and the effects on individuals when interest rates rise and fall. Explain what you might discuss with a financial institution about your loans and deposits when rates are in a rising trend. Specifically state both the negative and the positive effects that the rising interest trend would have on your financial plan.

Financial institutions that accept deposits (that are insured)from individuals and provide loans are called

Which of the following is a disadvantage of using debits cards over credit cards?

A bank does not charge a penalty for cashing in a five-year uncashable GIC early.

If you have $10 000 that you do not expect to need for expenses in the next few years and you wish to put it somewhere so that it will earn a return, which of the following financial institutions would be the best option?

Securities firms primarily sell insurance to protect individuals from adverse events.

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

How much more interest will be earned on a $5000 investment earning 6 percent compounded monthly over another investment paying the same rate but compounded annually for 10 years? (round your answer)