Question 1

Evan Nolan is a college graduate who has just landed a great job.He feels it is time for him to start saving a portion of his earnings.What factors would you recommend he consider when evaluating and comparing different savings plans?

Accepted Answer

When evaluating a savings plan...

Question 2

A person borrows $200 from a payday loan company,and pays $10 interest for two weeks.This would result in an annual interest rate of approximately ___ percent.Ignore compounding.

Accepted Answer

A)  260
B)  130
C)  40
D)  20
E)  5F) All of the above
G) A) and B)

Question 3

Which of the following is a way to reduce ATM surcharges?

Accepted Answer

A)  Withdraw larger amounts rather than making several smaller withdrawals.
B)  Withdraw the minimum amount each time you withdraw.
C)  Withdraw from ATMs based on their proximity to your home or place of business regardless of which bank services the ATM.
D)  Withdraw from ATMs that can be used by customers from many different banks.
E)  Make a separate withdrawal for each purchase to maintain a record of your spending.F) B) and D)
G) None of the above

Question 4

Which of the following institutions is organized primarily to provide loans to purchase homes?

Accepted Answer

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

Question 5

When interest rates are rising,a person would be best served by:

Accepted Answer

A)  short-term savings instruments.
B)  long-term savings instruments.
C)  short-term loans.
D)  variable-rate loans.
E)  certificates of deposit.F) C) and E)
G) All of the above

Question 6

A common service offered by investment companies is:

Accepted Answer

A)  interest-bearing checking accounts.
B)  variable-rate loans.
C)  credit card accounts.
D)  savings bonds.
E)  money market funds.F) B) and E)
G) D) and E)

Question 7

Sue deposited $1,000 in an account paying 3 percent interest.The inflation rate is 5 percent.What is the buying power of the account after one year?

Accepted Answer

A)  $1,050
B)  $1,030
C)  $1,000
D)  $980
E)  $950F) A) and B)
G) A) and C)

Question 8

The profits from a mutual savings bank go to the:

Accepted Answer

A)  creditors.
B)  loan applicants.
C)  stockholders.
D)  depositors.
E)  community in which it operates.F) B) and D)
G) None of the above

Question 9

A certificate of deposit usually has:

Accepted Answer

A)  a high interest-rate risk.
B)  a high safety risk for savers.
C)  a penalty for early withdrawal.
D)  a variable rate of return.
E)  no minimum deposit amount.F) B) and D)
G) B) and C)

Question 10

A saver will usually receive the highest earnings with which one of the following types of savings plans?

Accepted Answer

A)  Certificate of deposit
B)  Debit account
C)  Regular savings account
D)  Share account
E)  Credit accountF) A) and C)
G) B) and C)

Question 11

An advantage credit unions may have over other financial institutions is:

Accepted Answer

A)  interest-bearing checking accounts.
B)  lower loan rates.
C)  flexible-rate loans.
D)  credit cards.
E)  variable-rate savings plans.F) B) and D)
G) A) and E)

Question 12

The Expedited Funds Availability Act requires that funds be available to depositors:

Accepted Answer

A)  within 5 business days for local checks.
B)  within 2 business days for local checks.
C)  within 2 business days for both local checks and out-of-town checks.
D)  within 2 business days for out-of-town checks.
E)  immediately upon deposit.F) A) and C)
G) B) and D)

Question 13

A trust has the purpose of:

Accepted Answer

A)  solving a person's financial problems.
B)  obtaining low-interest loans.
C)  handling daily money management activities.
D)  managing the assets of a person.
E)  improving a person's budgeting skills.F) D) and E)
G) C) and D)

Question 14

What is the rate an individual will pay to borrow for the purchase of a new home called?

Accepted Answer

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

Question 15

The more frequent the compounding,the less a person will earn on a savings account.

Accepted Answer

A) True 
 B)False

Question 16

What is the rate that banks charge large corporations for loans called?

Accepted Answer

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

Question 17

What is the term used to refer to the yield on a long term bond issued by the U.S.government?

Accepted Answer

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

Question 18

Which CD starts with a higher rate,has a long time to maturity,and can be retired by the bank after a set time period?

Accepted Answer

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

Question 19

Neil Guest writes a check to pay for day care for his son.What type of financial service is Neil using?

Accepted Answer

A)  Payment service
B)  Savings service
C)  Borrowing service
D)  Trust service
E)  Investment managementF) None of the above
G) C) and D)

Exam 5: Financial Services: Savings Plans and Payment Accounts

A person borrows $200 from a payday loan company,and pays $10 interest for two weeks.This would result in an annual interest rate of approximately ___ percent.Ignore compounding.

Correct Answer
verified

A common service offered by investment companies is:

Correct Answer
verified

A trust has the purpose of:

Correct Answer
verified

Sue deposited $1,000 in an account paying 3 percent interest.The inflation rate is 5 percent.What is the buying power of the account after one year?

Correct Answer
verified

Which of the following is a way to reduce ATM surcharges?

Correct Answer
verified

When interest rates are rising,a person would be best served by:

Correct Answer
verified

What is the rate that banks charge large corporations for loans called?

Correct Answer
verified

Evan Nolan is a college graduate who has just landed a great job.He feels it is time for him to start saving a portion of his earnings.What factors would you recommend he consider when evaluating and comparing different savings plans?

Correct Answer
verified
When evaluating a savings plan...
View Answer

What is the term used to refer to the yield on a long term bond issued by the U.S.government?

Correct Answer
verified

Which of the following institutions is organized primarily to provide loans to purchase homes?

Correct Answer
verified

An advantage credit unions may have over other financial institutions is:

Correct Answer
verified

The profits from a mutual savings bank go to the:

Correct Answer
verified

A certificate of deposit usually has:

Correct Answer
verified

A saver will usually receive the highest earnings with which one of the following types of savings plans?

Correct Answer
verified

Neil Guest writes a check to pay for day care for his son.What type of financial service is Neil using?

Correct Answer
verified

What is the rate an individual will pay to borrow for the purchase of a new home called?

Correct Answer
verified

Which CD starts with a higher rate,has a long time to maturity,and can be retired by the bank after a set time period?

Correct Answer
verified

The Expedited Funds Availability Act requires that funds be available to depositors:

Correct Answer
verified

The more frequent the compounding,the less a person will earn on a savings account.

Correct Answer
verified

Exam 5: Financial Services: Savings Plans and Payment Accounts

A person borrows $200 from a payday loan company,and pays $10 interest for two weeks.This would result in an annual interest rate of approximately ___ percent.Ignore compounding.

Correct AnswerverifiedShow Answer

A common service offered by investment companies is:

Correct AnswerverifiedShow Answer

A trust has the purpose of:

Correct AnswerverifiedShow Answer

Sue deposited $1,000 in an account paying 3 percent interest.The inflation rate is 5 percent.What is the buying power of the account after one year?

Correct AnswerverifiedShow Answer

Which of the following is a way to reduce ATM surcharges?

Correct AnswerverifiedShow Answer

When interest rates are rising,a person would be best served by:

Correct AnswerverifiedShow Answer

What is the rate that banks charge large corporations for loans called?

Correct AnswerverifiedShow Answer

Evan Nolan is a college graduate who has just landed a great job.He feels it is time for him to start saving a portion of his earnings.What factors would you recommend he consider when evaluating and comparing different savings plans?

Correct AnswerverifiedWhen evaluating a savings plan...View AnswerShow Answer

What is the term used to refer to the yield on a long term bond issued by the U.S.government?

Correct AnswerverifiedShow Answer

Which of the following institutions is organized primarily to provide loans to purchase homes?

Correct AnswerverifiedShow Answer

An advantage credit unions may have over other financial institutions is:

Correct AnswerverifiedShow Answer

The profits from a mutual savings bank go to the:

Correct AnswerverifiedShow Answer

A certificate of deposit usually has:

Correct AnswerverifiedShow Answer

A saver will usually receive the highest earnings with which one of the following types of savings plans?

Correct AnswerverifiedShow Answer

Neil Guest writes a check to pay for day care for his son.What type of financial service is Neil using?

Correct AnswerverifiedShow Answer

What is the rate an individual will pay to borrow for the purchase of a new home called?

Correct AnswerverifiedShow Answer

Which CD starts with a higher rate,has a long time to maturity,and can be retired by the bank after a set time period?

Correct AnswerverifiedShow Answer

The Expedited Funds Availability Act requires that funds be available to depositors:

Correct AnswerverifiedShow Answer

The more frequent the compounding,the less a person will earn on a savings account.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
When evaluating a savings plan...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified