Personal Finance chp 5

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A rate of 6% on a savings account for a person with a 30 percent tax rate would mean an after tax rate of return of ________ percent.

4.2

Which of the following would be an example of a demand?

A checking account

Asset manager account

All in one account that includes savings, checking, borrowing, investing

Overdraft protection

An automatic loan made to checking account customers for checks written in excess of the available balance

Which of the following savings plan has the highest liquidity?

An interest earned checking

Share draft account

An interest earning checking account at a credit union

A complete financial services program for a single fee is referred to as an ________ ____________ _________.

Asset management account

An _________ _________ _______ is a computer terminal for banking transactions.

Automatic teller machine

Financial services would usually be most expensive at a

Cash checking outlet

A savings plan that requires you to leave a certain amount on deposit for a set time period in order to receive a certain interest rate is a _______ ___ _________.

Certificate of deposit

The savings plan that is likely to have a set rate of return is a

Certificate of deposit

A personal check with guaranteed payment is a

Certified check

Money market funds

Combination savings investment plan in which the investment company used your money to purchase a variety of short term financial investments

Traditionally, the widest range of financial services has been offered by

Commercial banks

Interest that is earned on previously earned interest is called ____________.

Compounding

Automatic teller machine (ATM)

Computer terminal used to conduct banking transactions

________deposits are money held in checking accounts.

Demand

T/F a CD account is a checking account that earns interest

False

T/F a cr union usually offers a wider range of financial services that a commercial bank

False

T/F demand deposits refer to money deposited in savings accounts

False

The fewest financial services would probably be offered by an

Investment company

Trust

Legal agreement that provides for the management & control of assets by one party for the benefit of another

The purpose of a trust is to

Manage funds for another persons

Commercial bank

Offers a full range of financial services to individuals, businesses and gov't agencies

Mutual savings bank

Owned by depositors and specialized in savings account and mortgage loans

Debit card

Plastic access card used in computerized banking transaction

Compounding

Process that calculates int based on previously earned interest

The percentage of increase in the value of savings due to earned interest is referred to as the _____ __ _______.

Rate of return

Share Accounts

Regular savings account at a credit union

A _________ endorsement is most useful when depositing checks by mail

Restrictive

A ____________ _____ _______ ____________ specialized in savings Accounts and loans for mortgages.

Savings and loan association

Certificate of deposit (CD)

Savings plan that requires a minimum balance and has earnings based on market int rates

A ________ ________ __________ is an interest bearing checking account at a credit union.

Share draft account

Which of the following is an interest bearing checking account?

Share draft account

Savings & loan associations (S&L)

Specialized in savings account and mortgage loans

Rate of return (yield)

The percentage of increase in the value of savings as a result of int earned

Annual percentage yield (APY)

The percentage rate expressing the Total amount of int that would be received on a $100 deposit based on the annual rate of frequency of compounding for 365 day period

Savings accounts and savings certificate are referred to as __________ deposits.

Time

T/F a quick source of cash is to liquidate savings

True

T/F a savings account with daily compounding will have higher earnings than an account with quarterly compounding

True

Credit unions

User-owned, nonprofit, cooperative financial institutions that is organized for the benefit of its members

The rate of return on a savings account may also be referred to as

Yield

_______ refers to the earnings received on savings

Yield


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