Ch 6
savings accounts protected by the FDIC are protected from loss up to
$250,000
a typical down payment for a house is _________ percent of the purchase price
10 to 20
False
Credit unions are owned by the board of directors of the banks that establish them
Money left over after you have paid bills is
Discretionary Income
True
Generally, the amount of work study earnings will help offset the need for student loans
The date on which a certificate of deposit is due is called the
Maturity date
which of the following is not a long term need?
New Car
False
Scholarships almost always come with no strings attached
True
The biggest advantage of scholarships is that they do not have to be repaid if you complete your education
which of the following is a condition determining how much money you will save
all of these
subsidized student loans
are guaranteed by the federal government
a method to make regular savings easier is
automatic payroll deduction
True
bonds represent debt or a loan: stocks represent equity or ownership
a stockbroker works for which type of financial institution
brokerage firm
is a company that buys and sells different types stocks and bonds
brokerage firm
if liquidity is important to you, which of the following savings options would you not want to consider?
certificate of deposit
which of the following is not a short-term need
childs education
The widest variety of banking service is provided at a
commercial bank
interest paid on the original principal plus accumulated interest is called
compounded interest
all of an individual's student loans are combined into one large loan, resulting in one monthly payment.
consolidation
not-for-profit organizations established by a group of people who pool their money
credit union
you will receive the greatest gain on your principal if interest is compounded
daily
part of the purchase price paid upfront
down payment
True
earnings on principal is called interest
a form of educational funding that is awarded based on financial need and that does no have to be repaid
grant
which of the following would be considered a long term need
home ownership
False
like certificate of deposit, there is a substantial penalty for taking money out of money market accounts.
a measure of how fast you can get cash without loss of value
liquidity
the date on which an investment becomes due for payment
maturity date
you can authorize your employer to make automatic deductions from your paycheck each period with a(n)
money market deposit account
work-study programs allow students to earn money by working
on campus
False
one disadvantage of using direct deposit is that your paycheck can only be deposited into a savings account, not a checking account.
True
online savings accounts generally pay higher rates of interest than traditional savings accounts.
True
people often choose their financial institution because of convenience of location and the services offered.
the amount of money you deposit into a savings account
principal
means you are guaranteed to not lose your savings deposit, even if the bank or other financial institution fails or goes out of business.
safety of principal
which of the following is organized primarily to lend money for home mortgages
savings and loan associations
a cash allowance awarded to a student to help pay education costs
scholarship
a savings account at a credit union are called a
share account
savings and checking accounts at a credit union are usually called
share accounts
False
stocks and bonds issued by corporations or by the government are called share accounts.
True
the best reason to save money is to provide for future needs.
True
the more liquid an investment, the less earning potential it is likely to have.
Trye
the more often interest is compounded,the greater your earnings will be.
False
when you buy a house, the smaller your down payment, the smaller your monthly payments will be.
