personal finance 4

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

installment loans

A drawback of U.S. savings bonds is:

lower rates for early redemption

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?

Overdraft protection is designed to:

cover underfunded checks

Mutual savings banks are owned by .

depositors

Financial services will usually not be affected by:

stock prices.

Check-cashing outlets usually charge fees of:

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

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

Blank 1: Commercial

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

Blank 1: Compounding or Compound

The percentage yield is the rate expressing the total amount of interest that would be received on a $100 deposit based on the annual rate and frequency of compounding for a 365-day period.

Blank 1: annual

An automatic teller machine (ATM) is also called as a(n) "cashBlank , Correct Unavailable machine."

Blank 1: cash,

A check is a personal check with guaranteed payment.

Blank 1: certified

A bank is a financial institution that offers a full range of services.

Blank 1: commercial

A union is a user-owned, nonprofit, financial institution that is organized for the benefit of its members.

Blank 1: credit

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

Blank 1: deposit

Which type of financial institution typically charges higher rates?

Check-cashing outlets

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

True

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

True

Common mistakes made when managing current cash needs include:

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

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

When comparing savings accounts rates of return, you should choose one that:

beats the rate of inflation

Common payment choices include:

debit cards cash credit cards checks

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

insurance companies.

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

withdraw, loan

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

Blank 1: share or shared

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

The high fees often charged

A regular savings account usually offers:

a low or no minimum balance requirement

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

credit card

Benefits of U.S. savings bonds include:

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

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

Blank 1: funds or fund

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

Commercial banks Savings and loans Credit unions

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

Inflation fee

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

True

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

certificate of deposit

Selection of a savings plan is influenced by:

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

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

a cash machine

A credit union is owned by:

members

A ______ fund is an account used for savings offered by investment companies.

money market

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

I bond

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

True

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

federal deposit insurance

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

Blank 1: deposit

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

False

A savings bank is owned by depositors and specializes in savings and mortgages.

Blank 1: mutual

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

interest

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

Does the bank offer tax preparation services?

A deposit ticket is used to add funds to:

an account

The rate of return is:

the percentage increase in the value of an account

Using compounding, how much interest will be earned in the second year of a savings account that has an original balance of $200 and earns 6 percent interest per year?

$12.72

Using compounding, how much interest will be earned in the second year of a savings account that has an original balance of $100 and earns 5 percent interest per year?

$5.25

A $200 savings account that earned $8 after a year would have a rate of return, or yield, of ______ percent. (Assume annual compounding.)

4

A $500 savings account that earned $25 after a year would have a rate of return, or yield, of ______ percent. (Assume annual compounding.)

5

A regular savings account usually does not have:

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

If inflation is 3 percent, a saver would want to earn an interest rate greater than:

3 percent

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

Blank 1: return or interest

A and loan association traditionally specializes in savings accounts and mortgage loans.

Blank 1: savings or saving

The Blank______ is the percentage rate expressing the total amount of interest that would be received based upon time and compounding.

annual percentage yield

Share draft accounts at a credit union:

are interest bearing until a minimum balance is maintained.

Deposit institutions would not include a:

brokerage firm

Time deposits do not include:

checking accounts. credit card and cash loans.

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

current,

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

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

A certified check is a personal check with:

guaranteed payment

Historically, savings and loans specialized in:

savings accounts and mortgage loans

A money market fund is a:

savings instrument

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

their balance