Exam 2: Managing Your Financial Resources - Banking Services and Managing Your Money

Which short-term investment likely offers the highest return?

Credit unions and caisses populaires are non-for-profit depository institutions that offer similar services as chartered banks,but only to members.

An example of a depository financial institution is an insurance company.

A good investment for Emma's emergency fund might be a five-year cashable term deposit.

Which of the following is an advantage of using a debit card?

Lorenzo is deciding between two banks for his chequing account.Thrift Bank requires a minimum deposit of $100,charges a monthly fee of eight dollars,plus $0.50 per cheque.Merchants Bank also requires a minimum deposit of $100,charges no monthly fee,but charges $1.00 per cheque.How many cheques would Lorenzo need to write each month to make Thrift Bank less expensive to use than Merchants Bank?

Mortgage companies

A type of cheque 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,but has no payee designated on the cheque is called a

Your chartered bank is offering a one-year GIC with an interest rate of two percent,and a one-year cashable GIC at one and a half percent.Term deposits are paying one percent.You have $10 000 to invest of which you feel $5000 is ample for emergency fund purposes.How should you invest your funds given the scenario above?

Which of the following is a Schedule II chartered bank?

Which of the following accounts would normally give you higher interest combined with access to your funds with a few days' notice?

Illustrate how you would quantify the effective annual interest rate for someone who was charged two $40 NSF fees on their account due to bouncing a cheque (writing a cheque when there are not enough funds in their bank account to cover it)for $1000 which would have been covered by their pay cheque in five days' time.Explain the effective interest rate charged if they had overdraft protection with a 21 percent interest charge and a $5.00 fee.Comment on better ways to manage liquidity than either of these options.

Fred's after tax income is $3600 a month and his expenses are generally $3600 as well.Last month he had a car accident which resulted in a $2000 unexpected expense due to the deductible on his insurance and he covered that expense with his credit card.What is the best way to describe his situation?

Which of the following would normally offer the best rate of return?

The interest on a Canada Savings Bond is not taxable as long as it is reinvested into the bond.

There is no real difference between a chequing account and a savings account at the same bank.

Guaranteed investment certificates (GICs)with shorter maturity dates tend to pay higher interest rates than those with longer maturity dates.

Because Sam wishes to invest in securities and has only $600 dollars available,a mutual fund would be a good option for him.

You are charged by your bank,but not by the institution you wrote the cheque to,for writing an NSF cheque.

Non-depository institutions that provide insurance to protect individuals or firms against possible adverse events are called