FIN120 - Chapter 4

I Bond

A Savings Bond that has an interest rate based on two components is a(n): -EE bond -I bond -HH bond

A low or no minimum balance requirement

A regular savings account usually offers: -A low or no minimum balance requirement -A high rate of interest -A high balance requirement -Overdraft protection

Payday loans

Check-cashing outlets do not offer which of the following services? -Utility bill payments -Money orders -Electronic tax filing -Payday Loans.

Installment loans

Common choices for making payments include all of the following except: -Checks -Online/Mobile transfers -Credit cards -Cash -Installment loans.

Interest

Compounding is the process that calculates earnings based on previously earned: -Interest -Principle -Money Market rates

Debt Counseling

Financial services include all of the following except: -Payment Services -Savings -Debt Counseling -Borrowing

Their Balance.

Overdraft protection is an automatic loan made to checking account customers to cover checks written in excess of: -The reconciled balance -Their balance -The expected balance

Safety

Saving funds for future use is necessary for financial:

Return

The rate of ______ is the percentage increase in the value of savings as a result of interest earned.

Current

Using savings for paying _________ expenses is one of the mistakes people make when managing current cash needs.

Does the bank offer tax prep services

What is not typically a basic concern of a financial services customer?

-Commercial Banks -Credit Unions -Savings and loans

Which of the following deposit-type institutions serve as financial intermediaries? -Insurance Companies -Commercial banks -Credit unions -Investment companies -Savings and Loans

Inflation Fee

Which of the following is not a common fee associated with prepaid debit cards? -Inflation Fee -Transaction fee -Activation fee -Monthly fee

Checking-Cashing outlets

Which type of financial institution typically charges higher rates? -Checking-cashing outlets -Credit Unions -Savings and loans -Commercial banks

T

Financial services can change due to such factors as changing interest rates and rising consumer prices(T/F).

Stock Prices

Financial services will usually not be affected by:

withdraw, borrow

If there is a shortage of cash, you will have two basic choices to cope with the situation: _______ from a savings or _______

-Brokerage firms -Life insurance companies -Investment companies

Non-deposit institutions mentioned in the text include(Pick 3): -Brokerage firms -Life insurance companies -Payday loan companies -Pawnshops -Investment companies

Are interest bearing until a minimum balance is maintained

Share draft accounts at a credit union: -Are interest bearing until a minimum balance is maintained -Offer large interest rates -Offer no liquidity -Do not require any minimum balance to be maintained

The percentage increase in the value of an account.

The rate of return is: -The percentage required for fees on an account -The percentage change to switch accounts at banks -The percentage increase in the value of an account

T

Time deposits include money in savings accounts and certificates of deposits(T/F).

Insurance companies

All of the following are deposit institutions that serve as financial intermediaries except: -Savings and loan associations -Commercial banks -Credit unions -Insurance companies

Cover underfunded checks.

Overdraft protection is designed to: -Cover underfunded checks -Increase your prestige as a bank customer -Increase the overall balance in the account -Be only available to long standing customers.

-Restrictions and fees -Rate of return -Safety -Liquidity

Selection of a savings plan is influenced by(Pick 4): -Restrictions and fees -rate of return -safety -liquidity -tax preparation assistance

Compounding

________ is a process that calculates interest based on previously earned interest.

Commercial

A ______ bank is a financial institution that offers a full range of services.

The high fees often charged

A major concern with prepaid debit cards is which of the following?

Cash machine

Another name for an automated teller machine (ATM) is:

Share

A _________ draft account is an interest-bearing checking account at a credit union.

A guaranteed payment

A certified check is a personal check with: -A guaranteed payment -A CD -A specialized interest rate

T

A current shortage of cash can be overcome by liquidating savings or borrowing(T/F).

Credit Card

A customer has more security in case of fraudulent transactions when a debit card is processed like a(n) _____. -Cryptocurrency card -Credit card -Prepaid card -ATM card

An account

A deposit ticket is used to add funds to: -An account -A stock balance -A utility payment.

Lower rates for early redemption

A drawback of U.S. savings bonds is: -Lower rates for early redemption -Low minimum deposit -Government guaranteed -Exempt from state and local tax

The high fees often charged

A major concern with prepaid debit cards is which of the following? -People incurring debt by using them -The difficulty in loading the cards with extra funds -The high fees often charged -The lack of availability of funds

-A high balance requirement -Overdraft protection -A high rate of interest.

A regular savings account usually does not have(Pick 3): -A high balance requirement -Overdraft protection -A high rate of interest -A low or no minimum balance requirement.

Certificate of deposit

A savings plan that requires a certain amount of money to be left for a specified amount of time is a: -Money Market account -Certificate of deposit -Stock Option -Passbook savings account.

Cash

An automatic teller machine (ATM) is also called as a(n) "_________ machine."

-Government guarantee -Exemption from state and local taxes -Low minimum deposit

Benefits of U.S. savings bonds include: -Government guarantee -Lower rates for early redemption -Exemption from state and local taxes -Low minimum deposit

-Over spending -Using savings for current expenses -Leaving funds in low-interest accounts too long -Lacking sufficient liquid assets to pay current bills.

Common mistakes made when managing current cash needs include(Pick 4): -Overspending -Delaying a purchase for a lower price -Using savings for current expenses -Leaving funds in low-interest accounts too long -Saving too much money -Lacking sufficient liquid assets to pay current bills

F

Debit cards allow you to wait to deduct the amounts from your account(T/F).

Brokerage firm

Deposit institutions would not include a: -Mutual savings bank -Commercial Bank -Credit union -Brokerage firm

Federal Deposit insurance

Money market accounts at commercial banks are insured by ______, whereas money market funds are not. -State money insurance -State deposit insurance -Federal money insurance -Federal deposit insurance

T

One criterion for choosing a saving plan is the rate of return(T/F).

-How can I minimize costs for checking and savings? -Where can I get the best return on savings? -Will I be able to borrow money when I need it?

Some of the basic concerns of a financial services customer when comparing financial services include which of the following(Pick 3)? -How can I minimize costs for checking and savings? -Where can I get the best return on savings? -Does the bank Provide insurance services? -Will I be able to borrow money when I need it?

-Inflation rate that changes semiannually -Fixed rate of interest for the life of the bond.

The two parts of interest on an I bond are a(n): -Quarterly rate change for interest -Inflation rate that changes semiannually -Fixed rate of interest for the life of the bond -Annual rate change for interest