Chapter 5
Which CD pays earnings based on the stock market?
Indexed
Which of the following is not a deposit institution
Life insurance company
A certificate of deposit usually has
Limited liquidity
An advantage credit unions may have over other financial institutions is
Low-cost personal loans
Which of the following savings plans in not covered by federal deposit insurance?
Money market fund with an investment company
What is the rate an individual will pay for borrowing to purchase a new home called
Mortgaage rate
What type of account would you expect to provide the poorest yield?
Passbook savings account
Which type of organization does not provide home mortgages?
Payroll check cashing services
Which CD attempts to attract life savers with gifts or special rates?
Promotional
Time deposits are another name for
Saving accounts
Nate rogers deposited $5000 in a 3 year bank CD which pays six percent interest. What type of financial service is Nate using?
Savings service
A savings account at a credit union is called a
Share account
In the bank reconciliation process service fees should be
Subtracged from the checked book balance
When preparing a bank reconciliation, outstanding checks should be
Subtracted from the bank statement balance
The purpose of a special endorsement is to
Transfer a check to another person
The purpose of decit card is to
Transfer money electronically
A free checking account with a minimum balance of $500 has an opportunity cost of lost interest.
True
All-in-one accounts may be used by financial institutions to simplify the maze of financial services and to attract customers.
True
An asset management account combines several financial services for a single fee.
True
The money market fund offered by investment companies is relatively liquid financial service.
True
Using a "debit" card is basically the same as writing a check.
True
Which of the following is an effective strategy in tkmes of falling interest rates?
Use short-term loans to take advantage of lower rates when you refinance loans
The expedited funds avaluability act requires that funds be available to depositors...
Within 2 days for local checks
The rate of return on a savings account is also referred to as
Yield
Comparison of earnings for different saving plans can best be accomplished using the...
Annual percentage yield
An all purpose account that provides several services is an
Asset management account
Which is a CD that offers a higher rate for every six months you are invested?
Bump-up
A saver will usually earn the highest rate with which one of the following types of savings plans?
Certificate of deposit
What type of account would be considered the most liquid?
Checking account
Traditionally, the greatest variety of financial services is offered by
Commerical banks
The federal deposit insurance corporation provides deposit insurance for
Commerical banks and savings and loans associations
In recent years, membership in credit union has
Continued to increase
Which of the following is a deposit institution
Credit Union
The profits of a mutual savings bank go to the
Depositors
What is the rate that the Federal Reserve chargws banks for loans
Discount rate
A regular savings account usually offers a higher rate of return to savers than other savings plans.
False
When preparing a bank reconciliation, interest esrned on your checking account is added to the bank statement balance.
False
A restrictive endorsement will usually the words "for deposit only."
True
Credit unions frequently offer lower loan rates than other financial institutions.
True
Savings and loans associations often offer mortgages.
True
