Finance exam 1

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

funds

When you calculate a budget , ______________ you determine the difference between the actual amount spent or received and the amount budgeted.

variance

Select all that apply Selection of a savings plan is influenced by: Multiple select question. A) rate of return. B) liquidity. C) tax preparation assistance. D) safety. E) restrictions and fees.

A,B,D,E

Which one of the following is an example of a variable expense? Multiple choice question. A) House payment B) Loan payment C) Car payment D) Groceries

D

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

Deposit

A drawback of U.S. savings bonds is: Multiple choice question. A) lower rates for early redemption. B) exempt from state and local taxes. C) low minimum deposit. D) government guaranteed.

A

A regular savings account usually offers: Multiple choice question. A) a low or no minimum balance requirement B) a high rate of interest C) overdraft protection D) a high balance requirement

A

Cash flow is the ______ of cash during a given period of time. Multiple choice question. A) inflow and outflow B) inflow and investment C) outflow

A

Financial services include all of the following except: Multiple choice question. A) debt counseling. B) payment services. C) savings. D) borrowing.

A

How often should you prepare a balance sheet? Multiple choice question. A) Every three to six months B) Every month for two years C) Once per year D) Every other year

A

Saving funds for future use is necessary for financial: Multiple choice question. A) safety B) power C) liquidation D) knowledge

A

What is not typically a basic concern of a financial services customer? Multiple choice question. A) Does the bank offer tax preparation services? B) How can I minimize costs for checking services? C) Will I be able to borrow money when I need it? D) Where can I get the best return on savings?

A

Select all that apply A regular savings account usually does not have: Multiple select question. A) a high balance requirement. B) a low or no minimum balance requirement. C) overdraft protection. D) a high rate of interest.

A,C,D

Which of the following are characteristics of good financial goals? Multiple select question. (Pick multiple) A) Measurable B) Unspecific target amount C) Realistic to achieve D) Have a definite time frame

A,C,D

A customer has more security in case of fraudulent transactions when a debit card is processed like a(n) _____. Multiple choice question. A) ATM card B) credit card C) prepaid card D) cryptocurrency card

B

Financial services will usually not be affected by: Multiple choice question. A) interest rate fluctuations. B) stock prices. C) various economic factors. D) rising consumer prices.

B

Check-cashing outlets offer the following services: Multiple select question. (Pick multiple) A) car repossession. B) money orders. C) electronic tax filing. D) utility bill payments.

B,C,D

Select all that apply Some of the basic concerns of a financial services customer when comparing financial services include which of the following? Multiple select question. A) Does the bank provide insurance services? B) How can I minimize costs for checking and savings? C) Where can I get the best return on savings? D) Will I be able to borrow money when I need it?

B,C,D

Select all that apply Common payment choices include: Multiple select question. A) corporate bonds B) checks C) debit cards D) credit cards E) municipal bonds F) cash

B,C,D,F

Select all that apply Which of the following deposit-type institutions serve as financial intermediaries? Multiple select question. A) Investment companies B) Credit unions C) Insurance companies D) Savings and loans E) Commercial banks

B,D,E

A personal _________ sheet also called a net worth statement or statement of financial position, reports what you own and what you owe.

Balance

A certified check is a personal check with: Multiple choice question. A) a certificate of deposit. B) a specified interest rate. C) a guaranteed payment.

C

All of the following are deposit institutions that serve as financial intermediaries except: Multiple choice question. A) credit unions. B) commercial banks. C) insurance companies. D) savings and loan associations.

C

Overdraft protection is an automatic loan made to checking account customers to cover checks written in excess of: Multiple choice question. A) the expected balance B) the reconciled balance C) their balance

C

Another name for an automated teller machine (ATM) is: Multiple choice question. A) a transaction machine B) a processing center C) a full service bank D) a cash machine

D

Common choices for making payments include all of the following except: Multiple choice question. A) cash B) online/mobile transfers C) credit cards D) installment loans E) checks

D

The rule of thumb when saving for an emergency fund is to set aside: Multiple choice question. A) two to three months of living expenses B) one month of living expenses C) two months of salary D) three to six months of living expenses

D

Personal balance sheet and the cash flow statement come from financial institutions, businesses, or the government. True false question. True or False

False

Time ___________ of money calculations can be used to calculate progress toward achieving different financial goals.

Value

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

Withdraw, borrow

Select all that apply Financial services include: Multiple select question. A) payment services B) forced retirement C) financial planning D) investments E) savings F) borrowing G) insurance

A,C,D,E,F,G

Which of the following is a financial statement that reports what an individual or a family owns and owes? Multiple choice question. A) Income statement B) Balance sheet C) Cash flow sheet

B

Select all that apply The two parts of interest on an I bond are a(n): Multiple select question. A) quarterly rate change for interest. B) fixed rate of interest for the life of the bond. C) inflation rate that changes semiannually. D) annual rate change for interest.

B,C

Select all that apply Time deposits do not include: Multiple select question. (Pick multiple) A) certificates of deposits. B) savings accounts. C) checking accounts. D) credit card and cash loans.

C,D

Which of the following is not a common fee associated with prepaid debit cards? Multiple choice question. A) Transaction fee B) Activation fee C) Monthly fee D) Inflation fee

D

Which of the following should not be considered when determining available income? Multiple choice question. A) Bonuses B) Salary payments C) Guaranteed pension payments

A

Which of the following are the major money management activities? Multiple select question. (choose multiple) A) Storing and maintaining personal financial records B) Investing in speculative stocks C) Preparing personal financial statements D) Creating and implementing a plan for savings

A,C,D

Which types of expenses fluctuate by household situation, time of year, and economic conditions? Multiple choice question. A) Fixed B) Variable C) Standard D) Required

B

Share draft accounts at a credit union: Multiple choice question. A) offer no liquidity. B) offer large interest rates. C) are interest bearing until a minimum balance is maintained. D) do not require any minimum balance to be maintained.

C

The most common overspending areas to evaluate when revising your goals and budget allocations are entertainment and ______. Multiple choice question. A) transportation B) housing C) food

C

The text covers ______ main money management activities. Multiple choice question. A) five B) four C) three D) two

C

The two documents considered to be part of personal financial statements include the personal balance sheet and which of the following? Multiple choice question. A) Funding sheet B) MACRS statement C) Cash flow statement

C

Which of the following statements is true? Multiple choice question. A) An emergency fund should be invested in stocks B) An adequate emergency fund is 9-12 months of take home pay C) An adequate emergency fund is usually 3-6 months of living expenses D) An adequate emergency fund is usually 3-6 months of gross pay

C

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

False

In determining income, you should include all expected commissions. True false question. True or False

False

A Savings Bond that has an interest rate based on two components is a(n): Multiple choice question. A) I bond B) HH Bond C) EE Bond

A

A deposit ticket is used to add funds to: Multiple choice question. A) an account B) a stock balance C) a utility payment

A

Select all that apply Common mistakes made when managing current cash needs include: Multiple select question. A) using savings for current expenses. B) lacking sufficient liquid assets to pay current bills. C) leaving funds in low-interest accounts too long. D) saving too much money. E) delaying a purchase for a lower price. F) overspending.

A,B,C,F

Which of the following can help you to achieve your financial goals? Multiple select question. (Pick multiple) A) Write a check each payday to deposit into a savings account. B) Have savings deducted and automatically deposited into a savings account from each paycheck. C) Save between 5 percent and 10 percent of each paycheck. D) Invest 40 percent of your annual salary in a new sports car. E) Buy long-term bonds with deductions from every other paycheck. F) Save coins in a jar at the end of each day for deposit at a future time into a savings account.

A,B,C,F

Select all that apply Benefits of U.S. savings bonds include: Multiple select question. A) low minimum deposit. B) exemption from state and local taxes. C) lower rates for early redemption. D) government guarantee.

A,B,D

If expected expenditures for food were $1,000 while the actual food costs were $750, what would be the variance? Multiple choice question. A) $750 favorable B) $250 favorable C) $250 unfavorable D) $1,000 unfavorable

B

Money market accounts at commercial banks are insured by ______, whereas money market funds are not. Multiple choice question. A) federal money insurance B) federal deposit insurance C) state money insurance D) state deposit insurance

B

Overdraft protection is designed to: Multiple choice question. A) be only available to long standing customers B) cover underfunded checks C) increase your prestige as a bank customer D) increase the overall balance in the account

B

A ________ will help you spend money wisely and have more control of your life.

Budget

Purchase receipts, insurance policies, tax forms, and which of the following are the basis of financial recordkeeping? Multiple choice question. A) Credit card statements B) Birth certificates C) Marriage licenses

Credit card statements

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

Current

A major concern with prepaid debit cards is which of the following? Multiple choice question. A) The lack of availability of funds B) People incurring debt by using them. C) The difficulty in loading the cards with extra funds D) The high fees often charged

D

A savings plan that requires a certain amount of money to be left for a specified amount of time is a: Multiple choice question. A) passbook savings account B) stock option C) money market account D) certificate of deposit

D

Cash __________ is the actual inflow and outflow of cash during a given time period.

Flow

Invoices, credit card statements, __________ policies, and tax forms are the basis of financial record keeping and personal economic choices. (Enter one word per blank.)

Insurance

A current shortage of cash can be overcome by liquidating savings or borrowing. True false question. True or False

True

Budgets allow you to live within your income while increasing your chances of achieving your financial goals. True false question. True or False

True

Financial goals should be specific, realistic, measurable, have a time frame, and imply the type of action to be taken. True false question. True or False

True

Financial services can change due to such factors as changing interest rates and rising consumer prices. True false question. True or False

True

Money management involves financial activities necessary to manage current personal economic resources, while working for the achievement of long-term financial security. True false question. True or False

True

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

True

People should prepare a personal balance sheet on a periodic basis to evaluate financial progress. True false question. True or False

True

When evaluating your budget, you should review and perhaps revise your financial goals and budget allocations and review your financial progress. True false question. True or False

True

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

cash

A __________ check is a personal check with guaranteed payment.

certified

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

deposit

Money management refers to the daily financial activities necessary to manage current ______ economic resources while working toward long-term financial security.

personal

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

share

Which type of financial institution typically charges higher rates? Multiple choice question. A) Check-cashing outlets B) Commercial banks C) Savings and loans D) Credit unions

A