finance chap 4

Which of the following is not a common fee associated with prepaid debit cards?

Inflation fee

Check-cashing outlets do not offer which of the following services?

Payday loans

True or false: One criterion for choosing a saving plan is the rate of return.

True

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

bank

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

spend. borrow

A certified check is a personal check with:

a guaranteed payment.

A deposit ticket is used to add funds to:

an account

The two parts of interest on an I bond are a(n):

inflation rate that changes semiannually. fixed rate of interest for the life of the bond.

Selection of a savings plan is influenced by:

rate of return. safety. liquidity. restrictions and fees.

Overdraft protection is an automatic loan made to checking account customers to cover checks written in excess of:

their balance

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

Compound

A regular savings account usually offers:

a low or no minimum balance requirement

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

Share

A regular savings account usually does not have:

overdraft protection. a high balance requirement. a high rate of interest.

A savings account provides a safe storage for funds to be used in the future.

true

Financial services can change due to such factors as changing interest rates and rising consumer prices.

true

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

a cash machine

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

return

Which of the following is not an example of a type of financial service that is focused on payment services? In other words, which of the following does not involve payment of money on your part?

Regular savings account

A certificate of is a savings plan requiring that a certain amount be left on deposit for a stated time period.

deposit

Benefits of U.S. savings bonds include:

exemption from state and local taxes. low minimum deposit. government guarantee.

Money market accounts at commercial banks are insured by ______, whereas money market funds are not.

federal deposit insurance

Which of the following deposit-type institutions serve as financial intermediaries?

Credit unions Savings and loans Commercial banks

All of the following are deposit institutions that serve as financial intermediaries except:

insurance companies.

The rate of return is:

the percentage increase in the value of an account

Money market accounts are insured by federal deposit insurance, whereas money market mutual are not.

fund

A current shortage of cash can be overcome by liquidating savings or borrowing.

true

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

Does the bank offer tax preparation services?

banks are organized as corporations, with investors contributing the capital for operations

Commercial

A Savings Bond that has an interest rate based on two components is a(n):

I bond

A check is a personal check with guaranteed payment.

certified

Time deposits do not include:

credit card and cash loans. checking accounts.

Common payment choices include:

debit cards credit cards cash checks

A ticket or slip is used to add funds to a checking account.

deposit

True or false: Debit cards allow you to wait to deduct the amounts from your account.

false

Common choices for making payments include all of the following except:

installment loans

Check-cashing outlets usually charge fees of:

1% - 20% of the face value of the check

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

The high fees often charged

Overdraft protection is designed to:

cover underfunded checks

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

credit card

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

current

Compounding is the process that calculates earnings based on previously earned:

interest

A drawback of U.S. savings bonds is:

lower rates for early redemption.

Financial services will usually not be affected by:

stock prices.

Which type of financial institution typically charges higher rates?

Check-cashing outlets

Some of the basic concerns of a financial services customer when comparing financial services include which of the following?

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?

Common mistakes made when managing current cash needs include:

lacking sufficient liquid assets to pay current bills. using savings for current expenses. leaving funds in low-interest accounts too long. overspending.

Share draft accounts at a credit union:

are interest bearing until a minimum balance is maintained.

A savings plan that requires a certain amount of money to be left for a specified amount of time is a:

certificate of deposit