Question 1

Gwen had three accounts as listed here.In 2011,how much was her total coverage by the FDIC?
• Bank A: $250,000
• Bank B: $50,000
• Bank C: $275,000

Accepted Answer

A)  $50,000
B)  $250,000
C)  $550,000
D)  $575,000
E)  $825,000

Question 2

Jennifer received a $50 gift card for her favorite retailer.What kind of card did she receive?

Accepted Answer

A)   A debit card.
B)   An online payment.
C)   A stored-value card.
D)   A smart card.
E)   All of these.

Question 3

An all-in-one account that provides a complete financial services program for a single fee is known as

Accepted Answer

A)   A cash management account.
B)   A checking account.
C)   A trust.
D)   A loan.
E)   A savings account.

Question 4

Which of the following will likely provide the most expensive access to funds?

Accepted Answer

A)   A credit card company
B)   An investment company
C)   A life insurance company
D)   A finance company
E)   A payday loan company

Question 5

A college ID that includes prepaid amounts for meals is called a debit card.

Accepted Answer

A) True 
 B)False  False

Question 6

When you select a financial services provider,you may find all of the following to be major factors except

Accepted Answer

A)   Company logo.
B)   Convenience.
C)   Fee structure and other charges.
D)   Personal service.
E)   Rates for savings and borrowed funds.

Question 7

What is the opportunity cost of a checking account that requires a $300 minimum balance to avoid service charges?
 Assume an interest rate of 6%.

Accepted Answer

The opportunity cost is the interest that could be earned on the minimum balance = $300 × 6% = $18.

Question 8

Wanda bought a certificate of deposit and automatically received a free bike.She purchased a

Accepted Answer

A)   Bump-up CD.
B)   Callable CD.
C)   Portfolio CD.
D)   Promotional CD.
E)   Stock-indexed CD.

Question 9

Will wants to open an account that will allow him easy access to his funds (by checks,ATMs,or debit card usage) from many locations and will pay at least a low interest rate.What kind of account should he open?

Accepted Answer

A)   A certificate of deposit
B)   An interest-earning checking account
C)   A money market account
D)   A money market fund
E)   A regular savings account

Question 10

Louise got caught in a cash flow trap and needed money quickly.Unfortunately,she didn't shop around and she went to a _____.As a result,her annual percentage rate was higher than 375%!

Accepted Answer

A)   commercial bank
B)   check-cashing outlet
C)   pawnshop
D)   payday loan facility
E)   rent-to-own center

Question 11

Earnings on savings can be measured by the

Accepted Answer

A)   Compounding.
B)   Liquidity.
C)   Minimum deposit.
D)   Rate of return.
E)   Safety.

Question 12

ATM stands for

Accepted Answer

A)   Automatic taking machine.
B)   Available teller machine.
C)   Automatic teller machine.
D)   Available token machine.
E)   Automatic token machine.

Question 13

Reconciling a checking account is not really necessary since the bank statement includes all activity from the bank's perspective.

Accepted Answer

A) True 
 B)False

Question 14

Zoe signed the back of her check with the words "for deposit only." She used a(n)

Accepted Answer

A)   Blank endorsement.
B)   Restrictive endorsement.
C)   Deposit ticket.
D)   Special endorsement.
E)   Individual account.

Question 15

When Ted needs cash,his choices include liquidating savings and borrowing.

Accepted Answer

A) True 
 B)False

Question 16

Which is a better source of cash-a credit union or a check cashing outlet?
 Why?

Accepted Answer

A credit union is a better source becaus...

Question 17

When you select a financial services provider,you should ask all of the following questions except

Accepted Answer

A)   Will I be able to borrow money if I need it?
B)   How can I minimize the cost of checking and payment services?
C)   Where can I get the best return on my savings?
D)   All of these questions should be asked.
E)   None of these questions are needed.

Question 18

A drawback of a savings account is

Accepted Answer

A)   Easy access to deposits.
B)   Being insured.
C)   A low minimum balance.
D)   A low rate of return.
E)   Ease of withdrawal.

Question 19

The insurance coverage provided by the FDIC for a savings account is ________ per depositor until January 1,2014.

Accepted Answer

A)   $50,000
B)   $100,000
C)   $150,000
D)   $250,000
E)   $500,000 D

Question 20

Harvey needed some cash quickly,so he received a short-term loan based on the value of an old ring.Where did he go?

Accepted Answer

A)   A commercial bank
B)   A check-cashing outlet
C)   A pawnshop
D)   A payday loan facility
E)   A rent-to-own center

Exam 4: Financial Services: Savings Plans and Payment Account

Gwen had three accounts as listed here.In 2011,how much was her total coverage by the FDIC? • Bank A: $250,000 • Bank B: $50,000 • Bank C: $275,000

Correct AnswerverifiedShow Answer

Jennifer received a $50 gift card for her favorite retailer.What kind of card did she receive?

Correct AnswerverifiedShow Answer

An all-in-one account that provides a complete financial services program for a single fee is known as

Correct AnswerverifiedShow Answer

Which of the following will likely provide the most expensive access to funds?

Correct AnswerverifiedShow Answer

A college ID that includes prepaid amounts for meals is called a debit card.

Correct AnswerverifiedFalse

When you select a financial services provider,you may find all of the following to be major factors except

Correct AnswerverifiedShow Answer

What is the opportunity cost of a checking account that requires a $300 minimum balance to avoid service charges? Assume an interest rate of 6%.

Correct AnswerverifiedThe opportunity cost is the interest that could be earned on the minimum balance = $300 × 6% = $18.

Wanda bought a certificate of deposit and automatically received a free bike.She purchased a

Correct AnswerverifiedShow Answer

Will wants to open an account that will allow him easy access to his funds (by checks,ATMs,or debit card usage) from many locations and will pay at least a low interest rate.What kind of account should he open?

Correct AnswerverifiedShow Answer

Louise got caught in a cash flow trap and needed money quickly.Unfortunately,she didn't shop around and she went to a _____.As a result,her annual percentage rate was higher than 375%!

Correct AnswerverifiedShow Answer

Earnings on savings can be measured by the

Correct AnswerverifiedShow Answer

ATM stands for

Correct AnswerverifiedShow Answer

Reconciling a checking account is not really necessary since the bank statement includes all activity from the bank's perspective.

Correct AnswerverifiedShow Answer

Zoe signed the back of her check with the words "for deposit only." She used a(n)

Correct AnswerverifiedShow Answer

When Ted needs cash,his choices include liquidating savings and borrowing.

Correct AnswerverifiedShow Answer

Which is a better source of cash-a credit union or a check cashing outlet? Why?

Correct AnswerverifiedA credit union is a better source becaus...View AnswerShow Answer

When you select a financial services provider,you should ask all of the following questions except

Correct AnswerverifiedShow Answer

A drawback of a savings account is

Correct AnswerverifiedShow Answer

The insurance coverage provided by the FDIC for a savings account is ________ per depositor until January 1,2014.

Correct AnswerverifiedD

Harvey needed some cash quickly,so he received a short-term loan based on the value of an old ring.Where did he go?

Correct AnswerverifiedShow Answer

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The opportunity cost is the interest that could be earned on the minimum balance = $300 × 6% = $18.

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A credit union is a better source becaus...
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