Question 1

Which of the following should not affect your choice of a financial institution?

Accepted Answer

A)  Convenience 
B)  Whether it is state or federally chartered 
C)  Deposit rates and insurance 
D)  Fees 
A)  Convenience 
B)  Whether it is state or federally chartered 
C)  Deposit rates and insurance 
D)  Fees

Question 2

The one-year loan rate for individuals is usually about the same as the one-year CD rate.

Accepted Answer

A) True 
 B)False

Question 3

Because of potential security concerns,it is unlikely that you will find a financial institution that offers mobile applications.

Accepted Answer

A) True 
 B)False

Question 4

Bank ATM charges may be substantial if you make many transactions monthly and use out-of-network machines.

Accepted Answer

A) True 
 B)False

Question 5

A(n)________ card allows you to pay for a purchase at a later time when the bill arrives.

Accepted Answer

A)  credit 
B)  debit 
C)  expense 
D)  ATM 
A)  credit 
B)  debit 
C)  expense 
D)  ATM

Question 6

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 7

A financial conglomerate offers a diverse set of services that include which of the following?

Accepted Answer

A)  Credit cards 
B)  Personal loans 
C)  Brokerage subsidiary 
D)  All of the above. 
A)  Credit cards 
B)  Personal loans 
C)  Brokerage subsidiary 
D)  All of the above.

Question 8

It is illegal for a federally insured financial institution to charge those with poor credit records higher interest rates than those with good credit.

Accepted Answer

A) True 
 B)False

Question 9

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 10

Use the following two columns of items to answer the matching questions below:
-debit card

Accepted Answer

A) automatically deducts an amount from a checking account 
B) extends the payment time through credit 
A) automatically deducts an amount from a checking account 
B) extends the payment time through credit

Question 11

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 12

Deposits at commercial banks are insured up to ________ per depositor by the Federal Deposit Insurance Corporation (FDIC).

Accepted Answer

A)  $100,000 
B)  $75,000 
C)  $250,000 
D)  $150,000 
A)  $100,000 
B)  $75,000 
C)  $250,000 
D)  $150,000

Question 13

Which of the following is not a fee that financial institutions may charge?

Accepted Answer

A)  Checking account service charge 
B)  ATM usage fee 
C)  Depository insurance 
D)  Safety deposit box rental 
A)  Checking account service charge 
B)  ATM usage fee 
C)  Depository insurance 
D)  Safety deposit box rental

Question 14

When you invest in a CD that has a maturity of one year,you are guaranteed the interest rate offered on that CD.Your return would be

Accepted Answer

A)  a risk premium. 
B)  money in the bank. 
C)  a risk-free return. 
D)  liquid assets. 
A)  a risk premium. 
B)  money in the bank. 
C)  a risk-free return. 
D)  liquid assets.

Question 15

Interest rates could change due to all of the following except

Accepted Answer

A)  United Nations resolution to change the U.S. Treasury rate. 
B)  shift in savings by investors. 
C)  shift in monetary policy of the Fed. 
D)  shift in business demand for funds. 
A)  United Nations resolution to change the U.S. Treasury rate. 
B)  shift in savings by investors. 
C)  shift in monetary policy of the Fed. 
D)  shift in business demand for funds.

Question 16

Because they have lower expenses,Web-based financial institutions tend to pay higher interest rates on deposits than institutions with physical branches.

Accepted Answer

A) True 
 B)False

Question 17

Use the following two columns of items to answer the matching questions below:
-investment company

Accepted Answer

A) financial institutions that accept deposits and provide loans 
B) a nondepository institution that sells shares to individuals and uses the proceeds to invest in securities and create a mutual fund 
C) a nondepositary institution that provides insurance to protect against adverse events 
D) a nondepository institution that specializes in providing personal loans 
E) nondepository institutions that facilitate the purchase and sale of securities by firm or individuals
F)financial institutions that offer a diverse set of services 
A) financial institutions that accept deposits and provide loans 
B) a nondepository institution that sells shares to individuals and uses the proceeds to invest in securities and create a mutual fund 
C) a nondepositary institution that provides insurance to protect against adverse events 
D) a nondepository institution that specializes in providing personal loans 
E) nondepository institutions that facilitate the purchase and sale of securities by firm or individuals
F)financial institutions that offer a diverse set of services

Question 18

Which of the following is not a depository institution?

Accepted Answer

A)  First National Bank of Chicago 
B)  Butterfield and Edwards Brokerage Company 
C)  American 1 Federal Credit Union 
D)  New England Savings Bank 
A)  First National Bank of Chicago 
B)  Butterfield and Edwards Brokerage Company 
C)  American 1 Federal Credit Union 
D)  New England Savings Bank

Question 19

Jack has $1,000 that he wishes to invest for the next two years.One-year CDs are currently paying 8% while two-year CDs are paying 12% per annum.Economists are predicting that interest rates will rise by the end of the year.What is the minimum amount interest rates would have to increase to in order for the one-year CD to be better than the two-year CD?

Accepted Answer

A)  16% 
B)  14% 
C)  12% 
D)  10 % 
A)  16% 
B)  14% 
C)  12% 
D)  10 %

Question 20

Cashier's checks,money orders,and traveler's checks are secured check alternatives to a personal check and therefore are more risk-free for the payee.

Accepted Answer

A) True 
 B)False

Which of the following should not affect your choice of a financial institution?

The one-year loan rate for individuals is usually about the same as the one-year CD rate.

Because of potential security concerns,it is unlikely that you will find a financial institution that offers mobile applications.

Bank ATM charges may be substantial if you make many transactions monthly and use out-of-network machines.

A(n)________ card allows you to pay for a purchase at a later time when the bill arrives.

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

A financial conglomerate offers a diverse set of services that include which of the following?

It is illegal for a federally insured financial institution to charge those with poor credit records higher interest rates than those with good credit.

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

Use the following two columns of items to answer the matching questions below: -debit card

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

Deposits at commercial banks are insured up to ________ per depositor by the Federal Deposit Insurance Corporation (FDIC).

Which of the following is not a fee that financial institutions may charge?

When you invest in a CD that has a maturity of one year,you are guaranteed the interest rate offered on that CD.Your return would be

Interest rates could change due to all of the following except

Because they have lower expenses,Web-based financial institutions tend to pay higher interest rates on deposits than institutions with physical branches.

Use the following two columns of items to answer the matching questions below: -investment company

Which of the following is not a depository institution?

Cashier's checks,money orders,and traveler's checks are secured check alternatives to a personal check and therefore are more risk-free for the payee.

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

Which of the following should not affect your choice of a financial institution?

The one-year loan rate for individuals is usually about the same as the one-year CD rate.

Because of potential security concerns,it is unlikely that you will find a financial institution that offers mobile applications.

Bank ATM charges may be substantial if you make many transactions monthly and use out-of-network machines.

A(n)________ card allows you to pay for a purchase at a later time when the bill arrives.

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

A financial conglomerate offers a diverse set of services that include which of the following?

It is illegal for a federally insured financial institution to charge those with poor credit records higher interest rates than those with good credit.

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

Use the following two columns of items to answer the matching questions below: -debit card

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

Deposits at commercial banks are insured up to ________ per depositor by the Federal Deposit Insurance Corporation (FDIC).

Which of the following is not a fee that financial institutions may charge?

When you invest in a CD that has a maturity of one year,you are guaranteed the interest rate offered on that CD.Your return would be

Interest rates could change due to all of the following except

Because they have lower expenses,Web-based financial institutions tend to pay higher interest rates on deposits than institutions with physical branches.

Use the following two columns of items to answer the matching questions below: -investment company

Which of the following is not a depository institution?

Cashier's checks,money orders,and traveler's checks are secured check alternatives to a personal check and therefore are more risk-free for the payee.

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