Personal Finance Test Chapters 5 and 6

Which financial service is best suited for saving money over a period of years? certificate of deposit
Credit cards allow you to ___. borrow money for a short term
You give up liquidity when you ___. store money in your sock
The Federal Deposit Insurance Corporation insures depositors against losing their money in the case of a ___. bank failure
Compared with commercial banks, credit unions generally offer ___. lower fees and loan rates
To earn high interest rates on a certificate of deposit, you must accept all the following limitations EXCEPT ___. completing a monthly bank reconciliation
In which kind of savings plan does the interest rate vary from month to month? money market
If you deposit $100 in an account with an annual interest rate of 6 percent compounded monthly, after 12 months you will have ___. $106.18
The first step in balancing a checkbook is ___. comparing checks in the check record with those on the statement
An example of open-end credit is a(n) ___. credit card charge
The interest is tax deductible on a ___. home equity loan
Credit card holders are known as convenience users when they ___. pay off their balances each month
The total dollar amount you pay o use credit is the ___. finance charge
A higher interest rate is usually the trade-off for a ____. long-term loan
Which of the Five Cs of Credit require that a persons assets exceed his or her liabilities? capital
A credit bureau is required to follow reasonable procedures to make sure that ___. the information on a persons file is correct
How should a cardholder begin to correct a mistake on a credit card bill? notify the creditor
The Consumer Credit Counseling Service offers to ___. supervise debt repayment plans
In a Chapter 13 bankruptcy, the debtor usually gets to ___. keep most of his or her property
Point-of-sale transaction the use of a debit card to purchase an item or service at a retail store
Compounding the process in which interest is earned on both the principal and any previously earned interest
Credit union a nonprofit financial institution that is owned by its members and organized for their benefit
Debit card a card issued by a financial institution that allows you to withdraw money from your account or pay for purchases by deducting funds directly from your account
Money market account a savings account in which the interest rate varies as market ranges change
Annual percentage yield the amount of interest that a financial institution would pay on a $100 deposit, after compounding, for one year
Certificate of deposit

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