Finance chapter 5 study guide

All “free” checking acocunt with a minimum balance of $500 has an opportuity cost of lost interest True
All-in-one accounts may be used by financial institutions to simplify the maze of financial services and attract customers True
An asset management account combines several financial services for a single fee True
Using a “debit” card is basically the same as writing a check True
Savings and loan associations offer mortgages True
Credit unions frequently offer lower loan rates than other financial institutions True
The money market fund offered by investment companies is a relatively liquid financial service True
A regular savings account usually offers a higher rate of return to savers than other savings plans False
A restrictive endorsement will usually include the words “for deposit only” True
When preparing a bank reconciliation, interest earned on your checking account is added to the bank statement balance False
An all-purpose account that provides several services is a(n): asset management account
The purpose of a debit card is to: Transfer money electronically
Time deposits are another name for: savings accounts
Traditionally, the greatest variety of financial services is offered by: commercial banks
The profits from a mutual savings bank go to the: depositors
In recent years, membership in credit unions has: continued to increase
An advantage credit unions may ha e over other financial institutions is: low-cost personal loans
A savings account at a credit union is called a _______ account shared
A certificate of deposit usually has: limited liquidity
A saver will usually earn the highest interest rate with which one of the following types of savings plans? Certificate of Deposit
Which of the following savings plans is not covered by federal deposit insurance? Money market fund with an investment company
The rate of return on savings account is also referred to as: yield
Comparison of earnings for different savings plans can be best be accomplished using the: annual percentage yield
The Federal Deposit Insurance Corporation provides Deposit insurance for: commercial banks and savings and loan associations
Which of the following is an effective strategy in times of falling interest rates? Use short-term loans to take advantage of lower rates when you refinance the loan
The Expedited Funds Availability Act requires that funds be available to depositors: within 2 days for local checks
The purpose of a “special” endorsement is to: transfer a check to another person
When preparing a bank reconciliation, outstanding checks should be: subtracted from the bank statement balance
In the bank reconciliation process, service fees should be: subtracted from the checkbook balance
Nate Rogers reposted $5000 in a 3-year CD which pays six percent interest. What type of financial service is Nate using? Savings service
What is the rate that the Federal Reserve charges bank for loans called? Discount rate
Which of the following is a Deposit institutions? Credit union
Which of the following is NOT a Deposit institution? Life insurance company
Which CD attempts to attract savers with gifts or special rates? Promotional
Which is a CD that offers a HIGHER RATE for every six months you are invested? Bump-up
Which CD pays earnings based on the stock market? Index
Which type of organization does not provide home mortgages? Payroll check cashing services
What type of account would you expect to PROVIDE THE POOREST YIELD Passbook savings account
What type of account would be considered MOST LIQUID Checking account
What is the rate AN INDIVIDUAL WILL PAY for brooding to purchase a new home called? Mortgage rate

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