FIN 1115 01---Personal Finance Question Set #3: Financial Instruments & Institutions

Which of the following is a difference between commercial banks and credit unions? Select one: a. Commercial banks issue loans while credit unions do not. b. You must have a credit card to be part of a credit union. c. Commercial banks are for people with a common bond. d. Commercial banks have stockholders and credit unions do not.

Commercial banks have stockholders and credit unions do not.

A traditional IRA is said to be tax-deferred. This means_____________ Select one: a. You are taxed when you contribute the money but not when you withdraw. b. The only thing certain in life is death and taxes. c. You never pay taxes on the money. d. Taxes are not paid on the money at time of contribution or interest earned. The taxes are paid the year in which money is withdrawn.

Taxes are not paid on the money at time of contribution or interest earned. The taxes are paid the year in which money is withdrawn.

What plan is known as a qualified tuition plan? Select one: a. Savings plan b. Qualified college savings plan c.College qualification plan d. 529 plan

529 Plan

At what age can money be withdrawn from an IRA account without facing a 10% penalty? Select one: a. 65 b. 59.5 c. 60 d. 55

59.5

What is the difference between a debit card and a credit card? Select one: a. Credit cards always have fees attached, whereas debit cards never do. b. You can use your debit card only at ATM machines and you can use your credit card only for purchases. c. Debit cards may be used only in the United States. d. A debit card takes money out of your checking account, whereas a credit card extends a loan to you when you use it.

A debit card takes money out of your checking account, whereas a credit card extends a loan to you when you use it.

Checking overdraft protection__________________ Select one: a. saves money in overdraft fees. b. saves you time. c. saves your reputation. d. All of the options are correct

All of the options are correct

Internet banking allows you to____________ Select one: a. All of the options are correct. b. check the balances in your account. c. deposit cash. d. deposit checks.

All of the options are correct.

When opening a savings account it is important to consider_____________ Select one: a. minimum balance b. APY c. All of the options are correct. d. fees

All of the options are correct.

Where is a checking account referred to as a "share draft account"? Select one: a. Commercial Bank b.Credit Union c. With your spouse d. Any bank

Credit Union

What is a savings account designed for? Select one: a. Investing Money b. Saving Money c. Counting Money d. Spending Money

Saving Money