Question 1

What is the rate that the Federal Reserve banks charge financial institutions for loans called?

Accepted Answer

A)  Prime rate
B)  Discount rate
C)  Mortgage rate
D)  Treasury bond rate
E)  Corporate bond rate B

Question 2

Which is a CD that offers a higher rate at set intervals,such as every six months you are invested?

Accepted Answer

A)  Bump-up
B)  Indexed
C)  Callable
D)  Global
E)  Promotional A

Question 3

"Loading" of prepaid debit cards may occur by:

Accepted Answer

A)  cash or check.
B)  direct deposit.
C)  online transfer.
D)  smartphone check photo
E)  All of these E

Question 4

A "no-fee" checking account that requires a non-interest-earning minimum balance of $500 has an opportunity cost of lost interest earnings.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is a drawback of a money market fund from an investment company?

Accepted Answer

A)  Penalty if money is withdrawn early
B)  Lower rate of interest if redeemed within the first five years
C)  Lacks liquidity
D)  Not covered by FDIC insurance
E)  Not usually allowed to write checks

Question 6

The Check Clearing for the 21st Century Act (known as Check 21)shortens the processing time for deposited checks by:

Accepted Answer

A)  verifying the identity of the depositor.
B)  establishing the substitute check.
C)  verifying the identity of the financial institution.
D)  eliminating paper checks.
E)  making the funds immediately available upon deposit.

Question 7

Which CD pays earnings based on the stock market?

Accepted Answer

A)  Bump-up
B)  Indexed
C)  Callable
D)  Global
E)  Promotional

Question 8

The Truth in Savings law requires that financial institutions:

Accepted Answer

A)  provide insurance for savings accounts.
B)  send customers monthly bank statements.
C)  disclose annual percentage yield on savings accounts.
D)  offer adjustable rate savings accounts.
E)  become members of the Federal Reserve System.

Question 9

Time deposits are another name for:

Accepted Answer

A)  checking accounts.
B)  loans and charge accounts.
C)  savings accounts.
D)  government securities.
E)  profits earned by a financial institution.

Question 10

Interest rates charged by a pawnshop:

Accepted Answer

A)  can range from 3% per month to over 100% a year.
B)  are usually below 5% per year.
C)  are normally lower than a bank.
D)  can range from 100% per month to over 300% a year.
E)  are insignificant.

Question 11

What is the term used to refer to the cost of borrowing for large U.S.corporations?

Accepted Answer

A)  Prime rate
B)  Discount rate
C)  Corporate bond rate
D)  Treasury bond rate
E)  T-bill rate

Question 12

Which of the following is a way to reduce ATM fees?

Accepted Answer

A)  Withdraw larger amounts rather than making several smaller withdrawals.
B)  Withdraw the minimum amount each time you withdraw.
C)  Withdraw from ATMs closest to you regardless of which bank owns the ATM.
D)  Withdraw from ATMs that can be used by customers from many different banks.
E)  Make a separate withdrawal for each purchase to maintain a record of your spending.

Question 13

A certificate of deposit is also known as a demand deposit.

Accepted Answer

A) True 
 B)False

Question 14

Nate Rogers deposited $2,500 in a 3-year bank certificate of deposit which pays six percent interest.What type of financial service is Nate using?

Accepted Answer

A)  Payment service
B)  Savings service
C)  Credit service
D)  Trust service
E)  Budget counseling

Question 15

A certificate of deposit usually has:

Accepted Answer

A)  earnings based on fluctuating market interest rates.
B)  no set time period.
C)  a penalty for early withdrawal of funds.
D)  a variable rate of return.
E)  no minimum deposit amount.

Question 16

One way to reduce payday loans is the use of Instant Financial's app that allows employees access to:

Accepted Answer

A)  100% of their pay on payday.
B)  50% of their pay each month they work.
C)  50% of their pay each week they work.
D)  50% of their pay each day they work.
E)  100% of their pay each day they work.

Question 17

Sue deposited $1,000 in an account paying 2 percent interest.The inflation rate is 5 percent.What is the buying power of the account after one year?

Accepted Answer

A)  $1,050
B)  $1,020
C)  $1,000
D)  $970
E)  $950

Question 18

The most frequent users of payday loans are workers who have become trapped by debts or poor financial decisions.

Accepted Answer

A) True 
 B)False

Question 19

Which law requires financial institutions to disclose fees,the interest rate,the annual percentage yield,and the other terms and conditions on savings account plans?

Accepted Answer

A)  Truth in Savings Law
B)  Truth in Lending Law
C)  Expedited Funds Availability Act
D)  Equal Employment Opportunity Act
E)  Identity Theft Protection Act

Question 20

When preparing a bank reconciliation,outstanding checks should be:

Accepted Answer

A)  added to the bank statement balance.
B)  subtracted from the bank statement balance.
C)  added to the checkbook balance.
D)  subtracted from the checkbook balance.
E)  ignored until they have cleared.

Exam 5: Financial Services: Savings Plans and Payment Accounts

What is the rate that the Federal Reserve banks charge financial institutions for loans called?

Which is a CD that offers a higher rate at set intervals,such as every six months you are invested?

"Loading" of prepaid debit cards may occur by:

A "no-fee" checking account that requires a non-interest-earning minimum balance of $500 has an opportunity cost of lost interest earnings.

Which of the following is a drawback of a money market fund from an investment company?

The Check Clearing for the 21st Century Act (known as Check 21) shortens the processing time for deposited checks by:

Which CD pays earnings based on the stock market?

The Truth in Savings law requires that financial institutions:

Time deposits are another name for:

Interest rates charged by a pawnshop:

What is the term used to refer to the cost of borrowing for large U.S.corporations?

Which of the following is a way to reduce ATM fees?

A certificate of deposit is also known as a demand deposit.

Nate Rogers deposited $2,500 in a 3-year bank certificate of deposit which pays six percent interest.What type of financial service is Nate using?

A certificate of deposit usually has:

One way to reduce payday loans is the use of Instant Financial's app that allows employees access to:

Sue deposited $1,000 in an account paying 2 percent interest.The inflation rate is 5 percent.What is the buying power of the account after one year?

The most frequent users of payday loans are workers who have become trapped by debts or poor financial decisions.

Which law requires financial institutions to disclose fees,the interest rate,the annual percentage yield,and the other terms and conditions on savings account plans?

When preparing a bank reconciliation,outstanding checks should be: