Personal Finance chp 5
A rate of 6% on a savings account for a person with a 30 percent tax rate would mean an after tax rate of return of ________ percent.
4.2
Which of the following would be an example of a demand?
A checking account
Asset manager account
All in one account that includes savings, checking, borrowing, investing
Overdraft protection
An automatic loan made to checking account customers for checks written in excess of the available balance
Which of the following savings plan has the highest liquidity?
An interest earned checking
Share draft account
An interest earning checking account at a credit union
A complete financial services program for a single fee is referred to as an ________ ____________ _________.
Asset management account
An _________ _________ _______ is a computer terminal for banking transactions.
Automatic teller machine
Financial services would usually be most expensive at a
Cash checking outlet
A savings plan that requires you to leave a certain amount on deposit for a set time period in order to receive a certain interest rate is a _______ ___ _________.
Certificate of deposit
The savings plan that is likely to have a set rate of return is a
Certificate of deposit
A personal check with guaranteed payment is a
Certified check
Money market funds
Combination savings investment plan in which the investment company used your money to purchase a variety of short term financial investments
Traditionally, the widest range of financial services has been offered by
Commercial banks
Interest that is earned on previously earned interest is called ____________.
Compounding
Automatic teller machine (ATM)
Computer terminal used to conduct banking transactions
________deposits are money held in checking accounts.
Demand
T/F a CD account is a checking account that earns interest
False
T/F a cr union usually offers a wider range of financial services that a commercial bank
False
T/F demand deposits refer to money deposited in savings accounts
False
The fewest financial services would probably be offered by an
Investment company
Trust
Legal agreement that provides for the management & control of assets by one party for the benefit of another
The purpose of a trust is to
Manage funds for another persons
Commercial bank
Offers a full range of financial services to individuals, businesses and gov't agencies
Mutual savings bank
Owned by depositors and specialized in savings account and mortgage loans
Debit card
Plastic access card used in computerized banking transaction
Compounding
Process that calculates int based on previously earned interest
The percentage of increase in the value of savings due to earned interest is referred to as the _____ __ _______.
Rate of return
Share Accounts
Regular savings account at a credit union
A _________ endorsement is most useful when depositing checks by mail
Restrictive
A ____________ _____ _______ ____________ specialized in savings Accounts and loans for mortgages.
Savings and loan association
Certificate of deposit (CD)
Savings plan that requires a minimum balance and has earnings based on market int rates
A ________ ________ __________ is an interest bearing checking account at a credit union.
Share draft account
Which of the following is an interest bearing checking account?
Share draft account
Savings & loan associations (S&L)
Specialized in savings account and mortgage loans
Rate of return (yield)
The percentage of increase in the value of savings as a result of int earned
Annual percentage yield (APY)
The percentage rate expressing the Total amount of int that would be received on a $100 deposit based on the annual rate of frequency of compounding for 365 day period
Savings accounts and savings certificate are referred to as __________ deposits.
Time
T/F a quick source of cash is to liquidate savings
True
T/F a savings account with daily compounding will have higher earnings than an account with quarterly compounding
True
Credit unions
User-owned, nonprofit, cooperative financial institutions that is organized for the benefit of its members
The rate of return on a savings account may also be referred to as
Yield
_______ refers to the earnings received on savings
Yield
