Question 1

Andy and Marjorie have very little will power when it comes to spending.They want to put their savings in an instrument that cannot be accessed by their ATM card.Which instrument would meet this criterion?

Accepted Answer

A)  ​Savings account 
B)  ​Super NOW account 
C)  ​Money market mutual fund 
D)  ​NOW account

Question 2

One should accumulate enough savings to cover living expenses for six to nine months.

Accepted Answer

A) True 
 B)False

Question 3

A stop-payment order works only if the check has not yet cleared your financial institution.

Accepted Answer

A) True 
 B)False

Question 4

Money withdrawn from a CD before the end of the specified time period is subject to interest penalties.

Accepted Answer

A) True 
 B)False

Question 5

Writing a "bad check" can be very expensive because of fees assessed by both the bank and the payee.

Accepted Answer

A) True 
 B)False

Question 6

Interest-earning checking accounts are offered through savings banks and mutual savings banks as well as credit unions.

Accepted Answer

A) True 
 B)False

Question 7

To reduce interest rate risk and smooth out interest rate fluctuations when purchasing certificates of deposit (CDs)you can engage in

Accepted Answer

A)  ​CD laddering. 
B)  ​CD layering. 
C)  ​grace period management. 
D)  ​money-market arbitrage.

Question 8

ATM transaction fees can be assessed when you make a purchase via a point-of-sale terminal at a retail store.

Accepted Answer

A) True 
 B)False

Question 9

Institutions usually have a rule requiring that savings account holders give 30 to 60 days notice for withdrawals,although this restriction is seldom enforced.

Accepted Answer

A) True 
 B)False

Question 10

Electronic funds transfers (EFTs)

Accepted Answer

A)  ​can transfer funds electronically. 
B)  ​can be used in place of checks. 
C)  ​are paperless. 
D)  ​all of these.

Question 11

Wise money managers should select the savings option that

Accepted Answer

A)  ​pays the highest annual percentage yield (APY). 
B)  ​avoids excessive fees. 
C)  ​avoids excessive penalties. 
D)  ​all of these.

Question 12

____ typically pay the highest rates of interest on savings.

Accepted Answer

A)  ​Commercial banks 
B)  ​Credit unions 
C)  ​Savings banks 
D)  ​Mutual savings banks

Question 13

The primary focus of savings banks is to accept savings from consumers and provide mortgage and consumer loans.

Accepted Answer

A) True 
 B)False

Question 14

Darla had $750 in her checking account when her debit card was stolen.Assuming the thief made $525 in purchases with the card,how much could she save by reporting the stolen ATM card immediately rather than waiting more than three months before reporting the theft?

Accepted Answer

A)  ​$50 
B)  ​$525 
C)  ​$475 
D)  ​$500

Question 15

Retail transaction fees can be assessed when you make a purchase via a point-of-sale terminal at a retail store.

Accepted Answer

A) True 
 B)False

Question 16

Special concerns for blended families include

Accepted Answer

A)  ​determining who assumes financial responsibility for biological offspring and stepchildren. 
B)  ​handling resentment over alimony and child-support payments. 
C)  ​managing unequal assets,incomes,responsibilities,and debts. 
D)  ​all of these.

Question 17

The more frequent the compounding,the greater the effective return for the saver.

Accepted Answer

A) True 
 B)False

Question 18

Diana and Kim are roommates in college and Diana owes Kim for last month's rent.When Diana receives a check from her mother for the rent,what type of endorsement should Diana use to sign this check over to Kim?

Accepted Answer

A)  ​Blank endorsement 
B)  ​Restrictive endorsement 
C)  ​Special endorsement 
D)  ​Trailing endorsement

Question 19

Today,even stock brokerages and insurance companies provide certain products for use in cash management.

Accepted Answer

A) True 
 B)False

Question 20

A checking account that does not pay interest is called a

Accepted Answer

A)  ​savings account. 
B)  ​money-market deposit account. 
C)  ​NOW account. 
D)  ​demand-deposit account.

Exam 5: Managing Checking and Savings Accounts

Andy and Marjorie have very little will power when it comes to spending.They want to put their savings in an instrument that cannot be accessed by their ATM card.Which instrument would meet this criterion?

One should accumulate enough savings to cover living expenses for six to nine months.

A stop-payment order works only if the check has not yet cleared your financial institution.

Money withdrawn from a CD before the end of the specified time period is subject to interest penalties.

Writing a "bad check" can be very expensive because of fees assessed by both the bank and the payee.

Interest-earning checking accounts are offered through savings banks and mutual savings banks as well as credit unions.

To reduce interest rate risk and smooth out interest rate fluctuations when purchasing certificates of deposit (CDs) you can engage in

ATM transaction fees can be assessed when you make a purchase via a point-of-sale terminal at a retail store.

Institutions usually have a rule requiring that savings account holders give 30 to 60 days notice for withdrawals,although this restriction is seldom enforced.

Electronic funds transfers (EFTs)

Wise money managers should select the savings option that

____ typically pay the highest rates of interest on savings.

The primary focus of savings banks is to accept savings from consumers and provide mortgage and consumer loans.

Darla had $750 in her checking account when her debit card was stolen.Assuming the thief made $525 in purchases with the card,how much could she save by reporting the stolen ATM card immediately rather than waiting more than three months before reporting the theft?

Retail transaction fees can be assessed when you make a purchase via a point-of-sale terminal at a retail store.

Special concerns for blended families include

The more frequent the compounding,the greater the effective return for the saver.

Diana and Kim are roommates in college and Diana owes Kim for last month's rent.When Diana receives a check from her mother for the rent,what type of endorsement should Diana use to sign this check over to Kim?

Today,even stock brokerages and insurance companies provide certain products for use in cash management.

A checking account that does not pay interest is called a