Question 1

An asset management account typically offers the following service:

Accepted Answer

A)  online banking.
B)  checking.
C)  borrowing.
D)  investing.
E)  All of theseF) C) and E)
G) None of the above

Question 2

The storage of funds for future use is a purpose of ____________,which include savings accounts and certificates of deposit.

Accepted Answer

A)  trust
B)  borrowing
C)  credit card
D)  time deposits
E)  cash checkingF) B) and D)
G) B) and E)

Question 3

Using a "debit card" to make purchases means you are spending your own funds.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is organized as a corporation and owned by stockholders?

Accepted Answer

A)  credit unions
B)  investment companies
C)  mutual savings banks
D)  savings and loan associations
E)  commercial banksF) B) and D)
G) C) and D)

Question 5

The business hours and location of a financial institution refer to the ____________ factor of selecting a financial institution.

Accepted Answer

A)  safety
B)  cost
C)  compounding
D)  liquidity
E)  convenienceF) A) and D)
G) A) and C)

Question 6

This type of savings plan is usually considered to be very liquid:

Accepted Answer

A)  Bonds
B)  Stocks
C)  Certificate of deposit
D)  Regular savings account
E)  All of theseF) None of the above
G) C) and E)

Question 7

Purchasing a new CD upon maturity of the current CD is commonly referred to as:

Accepted Answer

A)  creating a CD portfolio.
B)  rolling over.
C)  refinancing.
D)  calling a CD.
E)  bumping up.F) B) and D)
G) A) and B)

Question 8

A regular savings account usually offers a higher rate of return to savers than other savings plans.

Accepted Answer

A) True 
 B)False

Question 9

What type of account would you expect to provide the poorest yield?

Accepted Answer

A)  Certificate of deposit earning 3% compounded semiannually
B)  Savings account earning 3% compounded annually
C)  Money market account earning 3% compounded monthly
D)  Money market fund earning 3% compounded monthly
E)  Savings account earning 3% compounded semiannuallyF) None of the above
G) All of the above

Question 10

Which of the following is a drawback of a money market fund from an investment company?

Accepted Answer

A)  Penalty if money is withdrawn early
B)  Lower rate of interest if redeemed within the first five years
C)  Minimum required holding period
D)  Not covered by FDIC insurance
E)  Taxed at a higher rate than other investmentsF) C) and D)
G) A) and B)

Question 11

Savings compounded ____________ would have the highest effective yield.

Accepted Answer

A)  daily
B)  annually
C)  semi-annually
D)  monthly
E)  weeklyF) A) and B)
G) C) and E)

Question 12

What is the rate that the Federal Reserve banks charge financial institutions for loans called?

Accepted Answer

A)  Prime rate
B)  Discount rate
C)  Mortgage rate
D)  Treasury bond rate
E)  Corporate bond rateF) B) and C)
G) B) and D)

Question 13

Checking accounts are frequently referred to as ____________ deposits.

Accepted Answer

A)  common
B)  time
C)  current
D)  loan
E)  demandF) C) and E)
G) B) and E)

Question 14

Determine the rate of return on a savings account in which you deposited $300.00 and earned $6.00 in interest after one year.

Accepted Answer

A)  5.00%
B)  0.05%
C)  2.00%
D)  0.20%
E)  18.00%F) A) and D)
G) A) and E)

Question 15

Time deposits are another name for:

Accepted Answer

A)  checking accounts.
B)  loans and charge accounts.
C)  savings accounts.
D)  government securities.
E)  profits earned by a financial institution.F) C) and E)
G) C) and D)

Question 16

Which CD pays earnings based on the stock market?

Accepted Answer

A)  Bump-up
B)  Indexed
C)  Callable
D)  Global
E)  PromotionalF) A) and E)
G) C) and E)

Question 17

Which of the following institutions makes loans based on the value of tangibles possessions,such as jewelry and other valuables?

Accepted Answer

A)  Life insurance company
B)  Finance company
C)  Mortgage company
D)  Pawnshop
E)  Investment companyF) C) and D)
G) A) and E)

Question 18

Josh earned $120 on $1500 invested in a high yield money market account.He is taxed at 28% of his earnings.What is the effective yield on his investment?

Accepted Answer

Josh earned 8% ($120/$1500)on his high y...

Question 19

To avoid high fees for cash loans,a person should avoid borrowing from a:

Accepted Answer

A)  credit union.
B)  savings and loan association.
C)  pawnshop.
D)  commercial bank.
E)  mutual savings bank.F) B) and E)
G) B) and C)

Question 20

A ____________ endorsement would be used if a person is presenting a check in order to obtain cash.

Accepted Answer

A)  restrictive
B)  common
C)  special
D)  blank
E)  documentedF) C) and D)
G) A) and E)

Exam 5: Financial Services: Savings Plans and Payment Accounts

Time deposits are another name for:

Correct AnswerverifiedShow Answer

Checking accounts are frequently referred to as ____________ deposits.

Correct AnswerverifiedShow Answer

Determine the rate of return on a savings account in which you deposited $300.00 and earned $6.00 in interest after one year.

Correct AnswerverifiedShow Answer

An asset management account typically offers the following service:

Correct AnswerverifiedShow Answer

Which of the following is organized as a corporation and owned by stockholders?

Correct AnswerverifiedShow Answer

Josh earned $120 on $1500 invested in a high yield money market account.He is taxed at 28% of his earnings.What is the effective yield on his investment?

Correct AnswerverifiedJosh earned 8% ($120/$1500)on his high y...View AnswerShow Answer

Savings compounded ____________ would have the highest effective yield.

Correct AnswerverifiedShow Answer

Which of the following institutions makes loans based on the value of tangibles possessions,such as jewelry and other valuables?

Correct AnswerverifiedShow Answer

What type of account would you expect to provide the poorest yield?

Correct AnswerverifiedShow Answer

What is the rate that the Federal Reserve banks charge financial institutions for loans called?

Correct AnswerverifiedShow Answer

Which CD pays earnings based on the stock market?

Correct AnswerverifiedShow Answer

This type of savings plan is usually considered to be very liquid:

Correct AnswerverifiedShow Answer

Purchasing a new CD upon maturity of the current CD is commonly referred to as:

Correct AnswerverifiedShow Answer

The storage of funds for future use is a purpose of ____________,which include savings accounts and certificates of deposit.

Correct AnswerverifiedShow Answer

The business hours and location of a financial institution refer to the ____________ factor of selecting a financial institution.

Correct AnswerverifiedShow Answer

A regular savings account usually offers a higher rate of return to savers than other savings plans.

Correct AnswerverifiedShow Answer

To avoid high fees for cash loans,a person should avoid borrowing from a:

Correct AnswerverifiedShow Answer

A ____________ endorsement would be used if a person is presenting a check in order to obtain cash.

Correct AnswerverifiedShow Answer

Using a "debit card" to make purchases means you are spending your own funds.

Correct AnswerverifiedShow Answer

Which of the following is a drawback of a money market fund from an investment company?

Correct AnswerverifiedShow Answer

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Josh earned 8% ($120/$1500)on his high y...
View Answer

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