Chapter 17: Banking and Financial Services

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Only you or the bank has the right to open your safe-deposit

False

State banks may not join the Federal Reserve System

False

Stored-value cards allow you to use money that is in your checking account

False

All of the following are good check-writing habits EXCEPT

Void

The United States is divided into _______ Federal Reserve districts, with a central Federal Reserve bank in each district

12

They make loans based on the value of jewelry or some valuable item

Pawnshops

A signature card is a written notice that tells the bank not to pay a certain check

False

An endorsement that consists of only the endorser's name

Blank endorsement

A check that a bank draws on its own funds is called a

Cashier's check

Refers to the process of making payments among different banks

Clearing

This the most common way for a bank to be organized

Commercial bank

When you use this card, you are borrowing from the bank to pay later

Credit card

An interest-earning checking account is probably the best choice for the people who write only a few checks each month

False

When you put your money into a checking account, you fill out a

Deposit slip

An endorsement that allows you to transfer a check to another person

Full endorsement

Checking accounts and debit cards are examples of a financial institution's

Payment services

Which of the following is a non-depository financial institution?

Life Insurance Company

A savings bank owned by and operated for the benefits of depositors

Mutual Savings Bank

A user-owned, non-profit, cooperative financial institution is called

Mutual Savings Bank

A merchant accepts debit cards to pay for purchases with

Point-of-sale transactions

The part of the money deposited by customers that banks are required to deposit with the Federal Reserve System

Reserves

A fee a bank charges for handling a checking account

Service charge

A prepaid card for phone service and other similar transactions

Stored-value card

A commercial bank often is called a full-service bank

True

Clearing refers to the process of making payments among different banks

True

Savings and loan associations traditionally specialized in making loans for home mortgages

True

Sometimes two or more people have a checking account together, called a joint account

True

The owner of the account who signs the check is the drawer

True

Money or other property that is turned over to a bank to manage for a customer is said to be held in

Trust


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