personal finances module 2 study guide

If you borrow $15,000.00 for 5 years at 5% interest, the principle is _________________.

$15,000.00

The Great Depression began with the stock market crash of _______.

1929

The first Secretary of the Treasury of the United States was ____________________.

Alexander Hamilton

The Second Bank of the United States was established after the War of 1812. It was opposed by what president?

Andrew Jackson

Banks are the only financial institutions available for people to keep their money in.

False, there are other financial institutions including credit unions and thrifts.

FDIC is a banking acronym in which the letters stand for __________________________.

Federal Deposit Insurance Corporation

The Banking Act of 1933 established the FDIC. The FDIC is the ___________________________.

Federal Deposit Insurance Corporation

The formula for calculating simple interest is __________.

I = prt

The Securities Exchange Act of 1934 created the ________________________.

Securities and Exchange Commission

A bank may need what three items or information from you in order to verify your identity? Choose the three best answers.

Social Security number Individual Taxpayer Identification Number a photo identification (driver's license, job ID, state voter card, or any similar ID)

The Consumer Credit Protection Act established provisions requiring lenders to provide information about credit terms and the cost of credit. These are known as ________________.

The Truth in Lending Act provisions

Choose all the descriptors that tell about the functions and policies related to credit unions.

Their profits and surpluses are used to pay for administrative costs and member services. They are member owned and governed. They provide services to members only. They offer financial services similar to banks, but for members only. They are not for profit.

Choose all the descriptors that tell about the functions and policies related to thrifts.

They are mutually held corporations with decisions made by depositors and borrowers. They are also known as savings and loan associations. They specialize in savings accounts and making money off of mortgages and personal loans. Their law limitations govern use of assets that can be used for commercial loans.

Can a financial institution decide to close your account once it is open?

Yes, if you do not follow the rules and procedures of the institution.

A debit card purchase is much like a credit card purchase except _____________________.

a debit card purchase transfers money directly from your checking or savings account

When you buy stock in a company, it is like being ______________.

a part owner

Simple interest is interest based on ___________________.

a yearly rate, calculated once a year

What forms or account records are associated with a checking account?

account statements checks deposit slips check register

The first thing you need to do to open a new financial account is to go through a process called ________________.

account verification

What information should you record in your check register? Choose all applicable answers.

amount of any deposits dates that go with any transactions account balance check numbers of written checks amount of all written checks

You can use your debit card to make purchases ________________. Choose all correct responses.

at a gas pump that accepts debit cards online in person at a store over the phone

Most financial institutions offer ATM or debit cards that allow you to withdraw funds from your account at places other than your institution. A debit card looks like a credit card but it works more like a ______________.

check

A transaction fee can be assessed against an account for the following transactions (choose all possible answers):

checks cashed off other bank accounts deposits over the maximum number allowed transfers to other accounts copies of bank statements withdrawals over the maximum number allowed

People enjoy using online banking because it is ____________________.

convenient and saves time

A direct withdrawal is an electronic transaction similar to direct deposit, except a direct deposit ___________________.

deposits money into your account while a direct withdrawal takes money out of your account

Electronic banking or electronic funds transfer can include which of the following? Choose all that apply.

direct deposit of your payroll to your bank account using your personal computer to transfer money from your checking account to your savings account ATM withdrawals an electronic check conversion at a store for payment for merchandise automatic insurance bill draft off your account monthly phone-activated transfer from one account to another

When you buy bonds, it is more like being a _______________.

lender

Compound interest is interest that is a result of ________________.

making interest on interest

Instead of an annual fee, most credit unions assess a one-time _______________which is usually accepted as the first deposit and is refunded when closing the account.

membership fee

Financial institutions may charge certain operational fees to help defray the costs of doing business. Choose the fees listed below that are common to financial institutions.

non-sufficient funds fees overdraft fees minimum balance fees transaction fees returned check fees

When using your personal computer to carry out banking transactions, it is important that no one else knows your ___________.

passwords

A checkbook ______________ is a page or booklet that is used to keep up with all the transactions in your banking account.

register

Most people use tax-deferred accounts or plans for ____________________.

retirement and travel

Before a bank completes processing your account, they may _________________.

run a credit report

For each type of investment account or plan, choose whether it is taxed or tax-deferred. 401(k) plan money market account regular savings account stock dividends or stock splits bond dividends or payments 403(b) plan IRA account 457 plan certificates of deposit

tax-deferred taxed taxed taxed taxed tax-deferred tax-deferred tax-deferred taxed

To help improve the United States economy after the stock market crash, President Franklin Roosevelt supported a plan referred to as ______________.

the "New Deal"

Once someone opens an account at a financial institution, who is responsible for keeping up with the account balance, any fees deducted from the account, and any deposits or withdrawals?

the person who opens/owns the account