Exam 5: Banking and Interest Rates

Which of the following is true with regard to rising interest rates?

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

The term structure of interest rates is the relationship between the maturities of ________ debt securities and the annualized yields offered on those securities.

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.

The ________ is an additional return beyond the risk-free rate that can be earned from a deposit guaranteed by the government.

Lucky Louie's bank requires a minimum balance at all times of $1500 in order to provide free checking services. The bank pays .5% per annum interest on the minimum balance.If you do not maintain the balance,account service fees are $4 per month.Assuming Lucky can earn 2.5% on his money not sitting at the bank,what is his net benefit to maintaining the minimum balance?

to speed the process of paying your bills and save money on stamps,you could

Your commercial bank is offering a one-year CD with an interest rate of 7%.A financial company offers an interest rate of 10% on its one-year certificate (not a CD).The risk premium offered by the financial company is

Financial institutions offering traditional checking and savings accounts as well as providing loans to both individuals and firms are called ________.

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.

Debit cards allow you to pay for a purchase later when the bill arrives.

The interest rate is composed of the ________ and the ________.

Discuss interest rates in general in the United States and the effects of rising and falling interest rates.Does the Federal Reserve take an active role in setting interest rates?

Which of the following is not true regarding certificates of deposit (CDs)?

If you are anticipating a rising interest rate environment,your planning and analysis of your loan and investment portfolio should focus on

Which of the following is a nonprofit depository institution that provides services only to members who have a common affiliation?

When borrowing money from a ban for a home mortgage,30 year interest rates are generally

Your great aunt Mary passed away and left you an inheritance of $5,000.Since you don't have a need for the money in the near future,which of the following would be the best place to put the $5,000?

A ________ is a check that is written on behalf of an individual and will be charged against a large well-known financial institution or credit card sponsor's account.

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