Ch 6

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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.


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