Personal Finance: chapter 5
A $200 savings account that earns $13 interest in a year has a yield of _________ percent.
6.50
Savings and loan associations offer mortgages.
true
A person borrows $200 from a payday loan company, and pays $10 interest for two weeks. This would result in an annual interest rate of approximately ___ percent. Ignore compounding.
130
A _____________ endorsement would be used if a person is presenting a check in order to obtain cash.
blank
David Wynn gets a personal loan from his credit union for $1,000. David will make monthly payments $85.15 over the next year to repay the loan. What type of financial service is David using?
borrowing service
A higher rate of return would result from a savings account that had which of the following compounding frequencies?
daily
The profits from a mutual savings bank go to the:
depositors
What is the rate that the Federal Reserve charges banks for loans called?
discount rate
A certificate of deposit is usually considered to be very liquid.
false
Which CD pays earnings based on the stock market?
indexed
A certificate of deposit usually has:
limited liquidity
Which of the following represent the use of credit?
mortgage
Which of the following institutions is organized primarily to provide loans to purchase homes?
mortgage company
Which type of organization does not provide home mortgages?
payroll check cashing services
Which CD attempts to attract savers with gifts or special rates?
promotional
This type of savings plan is usually considered to be very liquid:
regular savings account
Nate Rogers deposited $5,000 in a 3 year bank CD which pays six percent interest. What type of financial service is Nate using?
savings service
When preparing a bank reconciliation, outstanding checks should be:
subtracted from the bank statement balance
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
Demand deposits are another term for checking accounts.
true
The money market fund offered by investment companies is a relatively liquid financial service.
true
The most frequent users of payday loans are workers who have become trapped by debts or poor financial decisions.
true
Using a "debit" card is basically the same as writing a check.
true
higher returns on savings will usually result in less liquidity.
true
Which law requires banks and other financial institutions to disclose fees, the annual percentage yield, and other terms and conditions on checking and savings accounts?
truth in savings law
Which of the following is an effective strategy in times of falling interest rates?
use short term loans to take advantage of lower rates when you refinance the loans
The Expedited Funds Availability 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
